ICC chief executive Clare Hadley yesterday confirmed Sir Tim filed the legal proceedings against the council last Tuesday.
The mayor had tried to recover costs from the council last year, however was turned down.
"He asked in March last year and the council declined the coverage, and our insurance declined the coverage," Ms Hadley said.
"He asked for cover under the section 43 of the Local Government Act and the council declined so he is now suing us for the money."
She confirmed the amount he was seeking was $448,000.
At the three-week defamation case heard in High Court at Invercargill in 2018, Ms Arnold alleged Sir Tim and media company Stuff had defamed her through comments made by Sir Tim in four opinion columns published by The Southland Times in 2014 and 2015.
After the jury ruled in the defendants’ favour, Ms Arnold sought a retrial, however this was declined by Justice Jillian Mallon.
She was ordered to pay costs of $186,00 to each party, but was subsequently adjudicated bankrupt.
The new legal proceedings will be addressed at today’s full council meeting when it will decide if it needs to hold an extraordinary council meeting on March 17.
Sir Tim did not return calls before the Otago Daily Times went to print last night.
