The dispute between the Warriors and New Zealand Rugby over the services of highly rated teenager Etene Nanai-Seturo is headed for mediation.

The 18-year-old turned out for the All Black Sevens side in Sydney last weekend, despite being under contract with the NRL franchise.

His appearance for the national side raised the ire of Warriors CEO Cameron George, who accused NZR of "disrespectful" conduct in their handling of the matter.

Nanai-Seturo has been selected for the Sevens team again this weekend, and will play in front of a home crowd in Hamilton.

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The Herald understands that NZR made an offer of a settlement earlier this week, but that was reportedly turned down by the NRL club.

The next step is going to be mediation, where both parties will argue their case while a professional mediator tries to facilitate a solution.

If that process is unsuccessful, then the final step would be deciding the matter in court.

Read more: NZR promise to resolve Etene Nanai-Seturo contract situation

Nanai-Seturo signed a five-year contract with the Warriors as a 15-year-old, and received money, airfares and other benefits as part of the deal, as well as time and resources invested in him.

But late last year, the Warriors received a letter from Nanai-Seturo — drafted by a lawyer — to inform the club he was "resigning" from his contract.

But a release has never been formally requested, and discussions between the parties had failed to reach a resolution, until NZR selected him in their sevens team for the Sydney tournament.

It's believed he has also committed to play for the Chiefs Super Rugby side, and lawyers representing the franchise are understood to have been acting on his behalf

There are differing legal interpretations of the situation, but it appears Nanai-Seturo's contract is legally binding, unless it can be proven that it was "harsh or onerous" or signed without the presence or consent of parents or guardians.

This is not believed to be the case.

The offer of a settlement this week by NZR would also appear to be an admission that they will need to take action to redress the current situation, regardless of the legal interpretation.

The Warriors have previously granted releases for players to switch codes, with All Black Ngani Laumape the most recent example, while others have included Glen Fisiiahi (Chiefs) and Sam Lousi (Hurricanes).

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