The Ewood Park outfit saw the EFL block their loan swoop for O’Brien, who has been forced to return to Nottingham Forest.
Blackburn appealed to the EFL to allow the move to go through, but failed; they are though taking their case for the loan move to be granted to another stage.
The Championship side are taking the case to an arbitration panel and have two weeks to put their case together.
Blackburn and the EFL will go up in front of an independent three-man panel, who will assess the case.
O’Brien is currently stuck at Nottingham Forest and his agents have been looking for options, with a possible loan move to the MLS on the agenda.
If an offer from an MLS side is on the table then that would further complicate matters for Blackburn.
Blackburn feel O’Brien could be a key man in their promotion push in the Championship and are trying all they can to bring him to Ewood Park.
