Their response comes days after the Nepal government stopped work related to the event in Kathmandu following opposition from a parliamentary panel.
Wizcraft International, the organising company, said they were considering "several countries and picturesque destinations" for the upcoming edition.
"Nepal was just one of countries bidding for IIFA in 2019 and IIFA had not yet confirmed Nepal as the host for our 20th Edition. IIFA is not responsible and has not been involved in any of the recent media activity relating to Nepal and does not endorse any event details provided," Wizcraft International director Andre Timmins said in statement.
He further claimed the Nepal government officials made public statements about the ongoing discussions, which has forced the organisation to take a "legal stance".
"This has been in spite of IIFA brand regulations barring them to speak publicly about the discussions until the bid submission made by them is reviewed, assessed and formally accepted by IIFA with legal contracts being exchanged.
"In lieu of the recent of events, since IIFA had not confirmed Nepal as the official host destination we will be taking a legal stance on this matter," Timmins said.