Justice McHugh has been appointed as arbitrator in the protracted dispute between the Knights and the State Government over EnergyAustralia Stadium.

The hearing is expected to start on July 14 and last for two or three days, after which McHugh will announce a resolution that will be final and binding for all parties.

It is understood that McHugh, who was born and educated in Newcastle and practised at the Newcastle Bar in the early 1960s, was short-listed by the government and endorsed by Knights officials.

The 73-year-old has been entrusted with one of the most momentous decisions in the Knights' 21-year history.

The NRL club and the Hunter Venues Authority, which manages the stadium on behalf of the government, have been at loggerheads since late last year over a number of issues relating to EAS.

The Knights have defaulted on paying almost $800,000 in rent and have refused to settle the debt until they are satisfied with the amount of compensation they receive while EAS has a reduced capacity.

They were initially served with a default notice by Hunter Venues in March and given until April 30 to pay.

But NSW Premier Nathan Rees extended that deadline by a month, until May 30, and also appointed Sydney Supreme Court barrister Michael Whelan as a mediator in the meantime.

When Whelan's mediation attempts failed, and the Knights again defaulted on their commitments, the government announced it had "decided to move to independent arbitration as the most appropriate and transparent way forward".

Knights officials will be hanging nervously on the outcome.

The club already has close to $3 million in accumulated losses, and an adverse result from the arbitration process could prove terminal.

There are a number of complicated issues that Justice McHugh will be asked to resolve.

As well as the impasse over unpaid rent and compensation, Hunter Venues is keen to wrest control of the stadium back from the Knights, who signed a 12-year management licence, or lease, in January last year.