UPDATE 2-Ciena, Nokia-Siemens fight over Nortel unit bid

* Ciena vs Nokia Siemens Network in U.S., Canadian courts

* Nortel supports Ciena bid

* Judge rules Nokia Siemens lacks standing

* Ciena says won't participate in new auction (Adds decision on Nokia Siemens standing to object)

By Tom Hals

WILMINGTON, Del., Dec 2 (Reuters) - Ciena Corp (CIEN.O) and Nokia Siemens Networks squared off in U.S. and Canadian courts on Wednesday to press their claims to be the highest bidder in an auction for a unit of bankrupt Nortel Networks Inc (NRTLQ.PK).

Network equipment maker Ciena in November trumped an offer by Nokia Siemens Networks and its financial partner, One Equity Partners, with an offer of $530 million in cash and $239 million in debt for Nortel's optical networking and carrier ethernet business.

On Tuesday, the 50-50 joint venture of Nokia (NOK1V.HE) of Finland and Siemens (SIEGn.DE) of Germany said it was ready to raise its offer to $810 million in cash, if the auction, which ended in late November, was reopened.

An attorney for Nortel urged a Delaware bankruptcy court judge to accept Ciena's bid as the winner and described Nokia Siemens as a "frustrated bidder."

Nokia Siemens suffered a setback after four hours of argument and testimony when the judges ruled the joint venture did not have standing to object to Ciena's bid.

The judges had not ruled on whether Ciena's bid would be approved, but the decision on standing prevented Nokia Siemens attorney from cross-examining witnesses.

The hearing was being held simultaneously in U.S. bankruptcy court and a Canadian court.

Nortel declared bankruptcy early in the year and has been auctioning off its businesses to raise money to pay creditors.

In addition to Nokia Siemens, creditors also asked for the auction to be reopened, with Nokia Siemens' latest offer serving as the first bid.

An attorney for Ciena told the court on Wednesday it would not participate if the auction were reopened.

Nortel's attorney said the auction was run openly and effectively and said the court can not turn back the clock to the night the auction ended.

"We can't do that. It's not fair to employees, to customers, to the company and not fair to the counterparties," said James Bromley of Cleary Gottlieb Steen & Hamilton, which represents Nortel.

Ciena offered $530 million in cash and $239 million in convertible debt. Nokia Siemens bid $770 million in cash at the end of the three-day auction on Nov. 22, and originally gave the Nortel team only 10 minutes to consider it, according to Bromley.

"We literally had to scream for everyone to get out of the room to consider the bid," said Bromley. He said they chose Ciena and gave Nokia Siemens a chance to respond, which they did not.

Nokia Siemens objected to the worth of the Ciena bid, arguing the convertible security was being overvalued.

"They refused to provide a valuation and said it was par," said an attorney for Nokia Siemens. "If it is valued at 95 percent of par, we're the winner. There is not a lot of margin of error."

Unsecured creditors also pressed for a reopening of the auction.

The judges in Canada and the United States were expected to rule later on Wednesday.

Shares of Ciena closed up 4.9 percent to $12.88 on Nasdaq.

The case is Nortel Networks Inc, et al, No. 09-10138 in the U.S. Bankruptcy Court for the District of Delaware. (Reporting by Thomas Hals; editing by Carol Bishopric) ((thomas.hals@thomsonreuters.com; 1-302-993-6283; Reuters Messaging thomas.hals.reuters.com@reuters.net))