South African-born Arthur - Australia's first foreign head coach - was fired last month before the Ashes series after CA said he failed to turn around declining standards of discipline in the team.
A Seven Network television report cited court documents it says show Arthur is seeking payments and compensation to the end of his 2015 contract. His salary was reportedly $400,000 per year plus some $200,000 a year in bonuses.
Seven said Arthur, who was replaced by former Australia test batsman Darren Lehmann, claims he was discriminated against because he was from South Africa and did not understand the Australian way.
The court documents also show Arthur saw himself as the "meat in the sandwich" amid a fierce feud between captain Michael Clarke and all-rounder Shane Watson, Seven reported.
The network added that Arthur also alleged Watson told him about the incident in which Australia opener David Warner punched England batsman Joe Root during the Champions Trophy. Arthur was fired shortly after the incident and Warner was subsequently fined and suspended.
"We're disappointed it has come to this position, but Cricket Australia is confident in its position on this matter and I'm sure it will get resolved in an appropriate fashion," CA lawyer Dean Kino told Seven.
Arthur guided Australia to 10 wins, six losses and three draws since his appointment in November 2011, but he polarized public opinion when he dropped four players - including then vice-captain Watson - for the third test in India for failing to complete written reports on their individual contributions to the team's performance. The embarrassing saga was quickly dubbed "Homeworkgate."
Watson left India before returning a week later to captain the team in the fourth test after Clarke was sidelined with injury. He has since stood down as vice-captain and, for the Ashes tour, veteran Brad Haddin was recalled as Clarke's deputy despite not being the first-choice wicketkeeper in more than a year.
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