Celsius Resources (AIM:CLA), the copper-gold explorer dual-listed on ASX and AIM, told investors that the Regional Trial Court of Makati has rejected a petition filed by its subsidiary Makilala Holding to block foreclosure proceedings brought by Equinaire Holdings.
Equinaire, a wholly-owned subsidiary of Kiri Industries, claims Makilala Holding defaulted on an Omnibus Loan and Security Agreement tied to a 40% interest in Makilala Mining Company, and has scheduled a public auction of that stake for 8 September.
The court ruled Makilala Holding failed to prove "irreparable injury", finding any loss from foreclosure would be economic and recoverable through arbitration.
It stressed the ruling does not confirm an Event of Default occurred or that Equinaire has the right to foreclose, leaving those questions for the arbitral tribunal.
The court also noted the tribunal can grant interim relief and rule on the validity of any foreclosure once arbitration begins.
Celsius plans to file a Motion for Reconsideration by the end of this week, and will appeal to the Court of Appeals if that motion fails.
The company is separately revising its Notice of Arbitration to bring the substantive dispute before an arbitral tribunal.
News Intelligence what this means for the company
A Philippine court has rejected Celsius Resources' attempt to block foreclosure on a 40% stake in Makilala Mining, ruling that any economic loss would be recoverable through arbitration rather than grounds for an injunction. The dispute now moves to arbitration, where Equinaire (a Kiri Industries subsidiary) will press its claim that Makilala Holding defaulted on a loan secured against the asset; the announcement has already prompted a sharp fall in Celsius Resources' share price, reflecting market concern about potential loss of a material holding.
The court's rejection of the injunction removes a near-term legal barrier to foreclosure and shifts the dispute to arbitration, where the burden of proof and remedies differ. Celsius retains the right to challenge the validity of the default and foreclosure itself before the arbitral tribunal, but the loss of the court stay materially increases execution risk on the 40% stake unless arbitration moves quickly or produces a favorable interim ruling.
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