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What is your role in the project?
Generally, if something is needed due to some technical need or constraint, solutions should be provided, say 2 options, and any impact, negative or positive, in either selection. Empower the decision makers to make a decision.
Do the sponsor and PM disagree with each other, or both disagree with the design?
If the Sponsor disagrees with the design, but the PM does, then why? Was the Sponsor empowered to make a decision. Is the PM listening to why the Sponsor disagrees. There is a disconnect somewhere. The goal is to determine where, or why, that is.
Not knowing much on your project.
I would look in the contract, is there clause for a arbiter?
Is the design in line with the contract scope description and technical requirement? Are the disagreement link with different interpretations of the requirements?
What is the impact of redesign? time cost....
in any case make good documentation, if it goes to a claim you need it, in detail.
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