Hollywood producer and studio go to arbitration over claims they owe him millions for Peter Jackson's Hobbit trilogy

Film producer Harvey Weinstein is locked in a battle with Warner Bros over profits from the next two films in Peter Jackson's JRR Tolkien fantasy trilogy, The Hobbit.

The studio is taking the dispute to arbitration after the Weinstein Company, which is co-owned by Weinstein and his brother, Bob, claimed a percentage of proceeds from The Hobbit: The Desolation of Smaug and its forthcoming follow-up. According to the Hollywood Reporter, the Weinsteins believe they are owed a share of profits due to their previous ownership of Miramax, which once held screen rights to Tolkien's 1937 children's book and its epic sequel, The Lord of the Rings. Warner suggests the brothers are only owed profits from one Hobbit movie, not three.

The dispute arose because Jackson originally planned to shoot Tolkien's book as one movie. It was later expanded to two, then three films. The arbitration is required because a legal contract for the films reportedly contains language that may support both points of view.

The Hobbit: The Desolation of Smaug will open in cinemas on 13 December, with the final instalment of the series due out in December 2014.

Last July, Harvey Weinstein accused Warner Bros of trying to bully his production house into giving up its share of profits from the Hobbit films in exchange for naming rights to the forthcoming Oscar-tipped film The Butler, which the Weinstein Company produced. The Motion Picture Association of America's Title Registration bureau eventually gave the historical drama permission to call itself Lee Daniels' The Butler. Warner Bros successfully claimed that it owns the name The Butler thanks to its little-known 1919 silent comedy short with the same title.

If the Weinsteins win the Hobbit dispute, they will likely receive around $12m (£7.35m) for each of the subsequent Hobbit films, should box office results mirror the $1bn takings of The Hobbit: An Unexpected Journey in 2012.

• The Hobbit: The Desolation of Smaug - the LA premiere in pictures• Watch the trailer for The Desolation of Smaug

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