Celsius Resources Ltd. is mounting further legal action to prevent the planned 8 September auction of its 40 percent stake in Makilala Mining Co. Inc., as its dispute with Equinaire Holdings Ltd. over a contested loan agreement moves toward arbitration.

Celsius said it will file a motion for reconsideration after a Regional Trial Court in Makati denied its petition seeking interim protection against the foreclosure of the omnibus loan and security agreement and the disposition of its stake in Makilala Mining.

The court's denial did not rule that a default had occurred or that Equinaire is legally entitled to foreclose on the stake, Celsius said. The court noted that substantive issues remain disputed and should be resolved through arbitration.

The row stems from the purported assignment of the loan agreement from Maharlika Investment Corp. to Equinaire Holdings, a wholly owned subsidiary of Kiri Industries Ltd.

Equinaire subsequently issued notices asserting events of default and seeking enforcement of security over the 40% interest in Makilala Mining held by Celsius subsidiary Makilala Holding Ltd.

Equinaire cited several alleged defaults, including a notice of relinquishment issued by Makilala Holding to Sodor Inc., information security incidents involving Makilala Mining, and Makilala Holding's efforts to obtain a temporary order of protection from the Makati court.

Celsius rejected the allegations, maintaining that no event of default occurred or continues under the agreement.

The mining firm also disputed Equinaire’s capacity to initiate foreclosure proceedings and sell Makilala Holding’s interest, arguing the alleged defaults do not satisfy the contractual conditions required before enforcement rights can be exercised.

The dispute escalated after a temporary order of protection previously granted by the Makati court was lifted following Equinaire’s payment of a 201 million peso counterbond. Equinaire then issued a notice of resumption of foreclosure and a notice of disposition declaring its intention to proceed with a public auction on Sept. 8.

Makilala Holding petitioned the court for interim protection to prevent the foreclosure or disposition of its stake until arbitration concludes.

The court denied the petition, finding that Makilala Holding had not sufficiently established irreparable injury because the potential loss from foreclosure was primarily economic and could be addressed through arbitration.

However, the court expressly stated its ruling was not a determination that an event of default occurred, that any alleged default was incurable, or that Equinaire is entitled to foreclose. It recognized that the interpretation of the agreement, the alleged defaults and Equinaire’s enforcement rights remain open for determination by an arbitral tribunal.

Celsius plans to file its motion for reconsideration soon. If denied, Makilala Holding intends to appeal to the Court of Appeals.

At the same time, Celsius is revising its notice of arbitration to commence proceedings where the merits of the dispute — including the validity of the alleged defaults and Equinaire’s enforcement rights — can be fully determined.

Celsius also pointed to a procedural hurdle facing any immediate transfer of the shares following an auction, noting that any buyer would need to obtain a certificate authorizing registration, or tax clearance, from the Bureau of Internal Revenue before the transfer could be registered with the Securities and Exchange Commission.

The BIR tax clearance process typically takes six to eight weeks, or at least 27 working days. Celsius said this could provide additional time to pursue court remedies — including reconsideration and a possible appeal — and seek interim relief through arbitration.

For the Philippine mining sector, the dispute places renewed attention on the ownership and financing arrangements surrounding Makilala Mining, which holds the interests associated with the Maalinao-Caigutan-Biyog copper-gold project in Kalinga.