The decision was a victory for the city and means officials may continue to seek a court order forcing the Sonics to play the next three seasons at the NBA's smallest venue.

"The Sonics have made clear they're attempting to leave after this coming season," Seattle City Attorney Tom Carr said. "The city wants an order from the judge saying they cannot escape the terms of their lease."

New Sonics chairman Clay Bennett failed to win public funding this year to build a new arena. Last month, he issued a demand for arbitration, hoping to buy out the remainder of the lease unless a deal on a new facility could be reached by the end of this month.

In response, the city sued, trying to force the Sonics to honor the terms of a deal reached in the mid-1990s: In exchange for $74 million in renovations to the old Seattle Coliseum, the team agreed to play all of its home games there through Sept. 30, 2010.

Seattle Mayor Greg Nickels said the ruling "goes a long way to ensuring Seattle taxpayers will get what they paid for when they rebuilt KeyArena."

The motions that landed on Martinez's desk in U.S. District Court concerned whether the dispute between the parties should proceed through arbitration or a lawsuit.

The arguments focused on competing sections of the lease agreement, but Martinez ruled that the controlling section is Article 2, the one saying that disputes are to be settled through arbitration unless they pertain to certain subjects, including the length of the lease.

He rejected arguments from the team that the contract's terms barred the city from going to court, and that under the language of another section — Article 26 — the team should simply be held in default and forced to pay the remaining rent if it stops playing at KeyArena, which has a capacity of 17,072.

The team's "attempt to sidestep Article 2 and shoot for Article 26 is as errant as a typical Shaquille O'Neal free throw," the judge wrote.

O'Neal, the star center for the Miami Heat, shot 42.2 percent from the free throw line last season.

"The Sonics ownership is pleased that there has been a prompt decision," Bradley S. Keller, a lawyer for the team, said in a statement. "It's important to note that the decision addresses the forum in which the dispute will be decided, not the merits of the case."

Bennett's Oklahoma City-based ownership group bought the Sonics and the WNBA's Seattle Storm last year for $350 million, and has insisted that the Sonics need a new, $500 million building.

Among the complaints are that KeyArena is the smallest venue in the league and that under the lease agreement the Sonics must turn over too much of their revenue to the city. NBA commissioner David Stern has called the lease the worst for any team in the league.