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That loan deal was originally for the remainder of last season and Hughes was expected to sign for Blues for the start of the 2002/03 season as part of that deal.
Now Dons chairman Charles Koppel thinks that Blues are stalling on the agreement.
Koppel said: "We entered into an agreement with Birmingham at the end of last season and Birmingham, in our opinion, should have signed Michael Hughes on July 1.
"The matter is being referred to the Football League and they will make a decision. It will probably go to a tribunal."
Hughes, who had one year left on his Wimbledon contract, is still struggling with the same ankle injury that cut short his loan term at St. Andrew's.