Watford are standing by a complaint against Everton over an allegation of an illegal approach to former manager Marco Silva.
The clubs entered a mediation process at the request of the Premier League that involved club officials and their respective legal teams, but no conclusion was reached.
The sale of Richarlison to Everton for upwards of £40m had prompted reports a resolution had been found between the two clubs, but Watford say they have been "compelled" to reiterate the disciplinary process is still ongoing.
Watford confirmed they have forfeited any right to compensation as a consequence of not following a proposed arbitration process, as they believe there is "overwhelming evidence of a clear breach of Premier League rules".
"We believe this situation is not about a compensation figure but the principle of making a stand when the actions of one Premier League club completely undermine and cause intrinsic damage to a fellow member club," the club said.
Watford refused to grant Everton permission to speak to Silva when he was in charge at Vicarage Road at the end of last year, despite his desire to open negotiations.
A run of one win in 11 matches prompted Watford to sack Silva in January 2018, but Everton did not accept any liability.
Silva was then appointed Everton manager in June, replacing Sam Allardyce.