BY LEANDER C. DOMINGO
KALINGA—Calcius Resources Ltd. is mounting further legal action to prevent the planned Sept. 8 auction of its 40-percent interest in Makilala Mining Company Inc. (MMCI), as its dispute with Equinaire Holdings Ltd. over a loan and security agreement moves toward arbitration.
RTC denies plea but leaves core issues open
Celsius said it will file a Motion for Reconsideration after the Makati Regional Trial Court (RTC) denied its petition seeking interim protection against foreclosure of the Omnibus Loan and Security Agreement (OLSA) and disposition of its MMCI interest.
The denial, however, did not rule that a default had occurred or that Equinaire is legally entitled to foreclose on Celsius’ stake, the company said. The court said the substantive issues remain disputed and should be resolved through arbitration.
Dispute rooted in loan assignment
The dispute stemmed from the purported assignment of the OLSA from Maharlika Investment Corp. (MIC) to Equinaire, a wholly owned subsidiary of Kiri Industries Ltd.
Equinaire subsequently issued notices asserting events of default and seeking enforcement of security over the 40-percent interest in MMCI held by Celsius subsidiary Makilala Holding Ltd. (MHL).
Equinaire cited several alleged defaults, including the Notice of Relinquishment issued by MHL to Sodor Inc., certain information-security incidents involving MMCI, and MHL’s move to obtain a Temporary Order of Protection from the Makati court.
Celsius rejected the allegations, maintaining that no Event of Default occurred or is continuing under the OLSA. It also disputed Equinaire’s capacity to initiate foreclosure proceedings and sell MHL’s interest in MMCI, arguing that the alleged defaults do not satisfy contractual conditions required before enforcement rights can be exercised.
Counterbond lifts protection, auction set
The legal dispute intensified after a Temporary Order of Protection previously granted by the Makati court was lifted following Equinaire’s payment of a P201-million counterbond.
Equinaire then issued a Notice of Resumption of Foreclosure and a Notice of Disposition declaring its intention to proceed with a public auction of MHL’s 40-percent interest in MMCI on Sept. 8, 2026.
MHL petitioned the court for interim measures of protection seeking to prevent foreclosure or disposition of its MMCI interest until the conclusion of arbitration. The court denied the petition, finding that MHL failed to sufficiently establish irreparable injury because the potential loss from foreclosure was primarily economic and could be addressed through arbitration.
The court expressly stated that 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 also recognized that the interpretation of the OLSA, the alleged defaults and Equinaire’s enforcement rights remain open for determination by an arbitral tribunal.
Legal remedies pursued
Celsius said it intends to file its Motion for Reconsideration by the end of this week. If the motion is denied, MHL 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.
Tax clearance seen as post-auction hurdle
The company also pointed to a potentially significant procedural hurdle facing any immediate transfer of the MMCI shares following an auction.
Celsius said any successful buyer would need to obtain a Certificate Authorizing Registration (CAR), or tax clearance, from the Bureau of Internal Revenue (BIR) before the transfer could be registered with the Securities and Exchange Commission (SEC).
According to Celsius, the BIR tax-clearance process typically takes at least 27 working days, or about six to eight weeks.
The company said this could provide additional time for it to pursue court remedies, including reconsideration and a possible appeal, as well as seek interim relief through arbitration.
Focus on MCB project
For the Philippine mining sector, the dispute places renewed attention on the ownership and financing arrangements surrounding MMCI, which holds interests associated with the Maalinao-Caigutan-Biyog (MCB) Copper-Gold Project in Kalinga.
Celsius maintains that the substantive dispute remains unresolved and that the ultimate validity of any foreclosure is a matter for arbitration.