Shareholders in a company linked to disgraced Labor Party power broker Eddie Obeid are suing Federal Assistant Treasurer Arthur Sinodinos.

The Federal Court claim argues the conduct of Australian Water Holdings (AWH), former chairman Mr Sinodinos and former Labor state treasurer Michael Costa was misleading and deceptive.

Liberal fundraiser Nick Di Girolamo is also being sued.

Mr Di Girolamo resigned as chief executive of the company when the Independent Commission Against Corruption (ICAC) announced hearings into the circumstances of the 25-year, $100 million infrastructure deal AWH was granted by Sydney Water.

The investigation will start on Monday.

Mr Di Girolamo has also been named in a parallel inquiry into Liberal Party fundraising, which will examine whether he entered into an agreement with a company called Eightybyfive in return for former resources minister Chris Hartcher favouring the interests of AWH.

Greens MP John Kaye says lobbyists need to be better regulated.

"Mr Sinodinis was the treasurer and then the president of the Liberal Party of New South Wales [and he] was a Senate-elect candidate when he was working for Australian Water Holdings," he said.

"This is an uncomfortable connection between the ruling party of New South Wales and a company that was vying for a contract with the New South Wales Government."