* Seeks injunction in California court, expects ruling by mid-July
* Argues sale cannot be made without its consent
* Auction has seen intense last-minute jockeying by suitors
* Western Digital' s new bid didn't get positive response -source (Recasts, adds details on Western Digital's position)
By Makiko Yamazaki
TOKYO, June 15 (Reuters) - Western Digital Corp has sought a court injunction to prevent Toshiba Corp from selling its chip business without the U.S. firm's consent - a move that threatens to throw the fiercely contested auction into disarray.
The escalation in the spat between Western Digital, which jointly operates Toshiba's main chip plant, and its business partner follows tense last-minute jockeying by suitors for the world's second-biggest producer of NAND semiconductors.
According to a person familiar with the matter, the California-based firm has been left out of a new Japan government-led group being formed to bid for the unit.
Toshiba's "attempts to circumvent our contractual rights have left us with no choice but to take this action," Western Digital's Chief Executive Steve Milligan said in a statement.
"Left unchecked, Toshiba would pursue a course that clearly violates these rights," he added.
Western Digital has filed its suit with the Superior Court of California, seeking an injunction until its arbitration case against Toshiba is heard. It is concerned about how Toshiba, the Japanese government and other stakeholders are handling the auction process, a second source said.
The second source added it had submitted a revised bid on Wednesday that satisfies Toshiba's requests on deal certainty and price but did not receive a favourable response. Toshiba has demanded at least 2 trillion yen ($18 billion) for the unit.
Sources declined to be identified due to the sensitivity of the negotiations concerning the auction.
Toshiba said in a statement that it was proceeding with selecting a preferred bidder for its memory unit by the second half of June as planned and hoped to reach a definitive agreement on a sale by June 28.
Toshiba wants to complete the deal as quickly as possible to help cover billions of dollars in cost overruns at its now-bankrupt Westinghouse nuclear unit and to dig itself out negative shareholders' equity that could lead to a delisting.
Satoru Oyama, senior principal analyst at research firm IHS, said Western Digital's argument made sense from a common-sense point of view and that developments were moving towards a worst-case scenario for the Japanese company.
"Toshiba has more to lose in the dispute because it is running out of time," he said. "Toshiba and Western Digital eventually have to talk. They cannot afford to keep fighting when Samsung is taking advantage of the NAND market boom and investing massively."