The Etihad outfit was taken to Federation Internationale de Football Association and CIS by Argentine club Velez Sarsfield but the world governing body had ruled that the signing of Benjamin Garre, then 16, by Manchester City was legal.
Premier League champions City could have been banned from signing players in the next two transfer windows had they been found guilty of breaching global transfer regulations when they signed Garre in 2016.
Velez claim City acted unethically by approaching Garre when he was just 15, before signing him days after his 16th birthday.
The Premier League side believed the player was free to join them as he had turned 16 and held an Italian passport but Velez claim that the rule only applies when two European teams are involved.More news: Freebies to ease the tax deadline pain
The Argentine club claimed that Federation Internationale de Football Association only allow players under-18 to move between clubs in European countries, and took their case to the CAS (Court of Arbitration for Sport) last July.
City were also given reason to believe that Garre's transfer was fully above board because it was apparently ratified by Federation Internationale de Football Association, who rejected Velez's complaint.
"We're angry because City came after our player, we said no and they took him anyway", declared Velez club secretary Bernardo Bertelloni previous year.
CAS has not released its formal decision, but is expected to find the case in City's favour.More news: Before and after aerials of the Syria strike
That is why a court case that was heard in July previous year, with a verdict due by the end of September, has been delayed.
Guardiola is looking to add two or three more players to his squad in a bid to create what Vincent Kompany termed a "dynasty" after Manchester United's defeat by West Bromwich Albion handed City the championship on Sunday.
Garre, who signed his first professional contract with City upon turning 17 past year, was really an innocent bystander in all of this, a young footballer trying to make it in the game.
City are very much of the opinion that they did nothing wrong in this case although if they are found guilty they are likely to be slapped with a two-window transfer ban.More news: AMD officially announces Ryzen 2000 processors