Despite the threats, Citizens boss John Comitis is maintaining that the club has done no wrong.
"I think (the Absa Premiership) are on a big witch hunt here and quite frankly we are 100 percent confident that we have done nothing wrong," Comitis said.
Nonetheless, the threat of action appears genuine with the league's board of governors deciding to skip a disciplinary committee and head straight to arbitration in January.
The publication were given reasons for the action taken, saying: "The shirt with the SportPesa logo on was never approved by the Absa Premiership as per league rules‚ and the club were directly instructed not to use it.
"The club has had charges brought against it for every game where they have continued to wear the SportPesa logo. They had accumulated more than 20 charges by mid-October.
"This puts City in defiance of league instructions and article 9.1.16 of the NSL Handbook gives the league the power to 'suspend‚ fine‚ terminate the membership of or otherwise sanction or deal with any Member Club' found guilty of such a transgression."