The first major development in the court case between the Sonics and the city of Seattle could emerge Thursday, finally providing some indication of whether the team will call Seattle or Oklahoma City home next year. A Thursday hearing with oral arguments has been scheduled for 1:30 p.m. Seattle time, court records show, and will be heard by Judge Ricardo Martinez, a U.S. District Court Judge for the Western District of Washington. It will mark the first court appearance by each party's representatives since the city of Seattle filed its lawsuit against the team on Sept. 24. The case's initial hearing was scheduled scheduled for Oct. 10 before Judge Harry McCarthy in King County Superior Court. But a day before the hearing, attorneys for the Sonics filed a motion to move the case to federal court. Martinez called Thursday's hearing to begin determining whether the case will remain in court or should be allowed to be settled by a panel of arbitrators. Seattle officials are arguing that the Sonics should not be allowed to vacate KeyArena until their Premises Use and Occupancy Agreement expires in 2010. Attorneys for the Sonics contend the city should not be able to force the franchise to remain at KeyArena if the team fulfills its financial payments for the remaining years of the arena contract. The Sonics argue that the dispute is arbitrable. It's unclear how Martinez will act Thursday. He could make an immediate ruling on the matter, or he could notify both parties that a decision will come at a later date. Meanwhile, the city of Seattle last week filed a demand for a jury trial, continuing a string of counter moves by both sides. Sonics chairman Clay Bennett has said he would apply with the NBA for relocation to Oklahoma City if a plan for a new publicly-funded arena is not available in Washington by Oct. 31.