It appears to have started last yesterday when guards from Guard Dog Security took over a contract from Executive Security Systems to secure a business on Lae's outskirts.
There was a scuffle between the two groups and the tension intensified overnight.
This morning there were clashes between them outside several businesses in the central business district.
The worst incident was at the Lae Yacht Club, which was ransacked by scores of Guard Dog employees because it was being guarded by their rivals.
Presenter: Liam Fox
Speaker: Sinan Bilsel, general manager Lae Yacht Club
Police in Lae says the situation is now calm and the guards have returned to their respective bases.
But residents are worried the violence could easily flare again.
BILSEL: Yesterday afternoon we had a security Guard Dog vehicle overpowering the security guards at the main gate and stoned them and went inside the security guard house and taking away the base radio and escaped. Immediately after we've taken all the measures and put some armed guards and everything just in case if it's going to continue, and that was last night. So nothing happened last night after that. So this morning we thought it was all over and we had a phone call from one of our members saying that they arrived at their place and they are on the way to the yacht club. And we immediately locked up all our gates and all the entrances to the club. Probably after all that, five minutes later we're being invaded by eight large trucks with around 200 Guard Dog guards and they climbed over the fences, which are very difficult to get into, and I couldn't believe the way they were climbing them. They had big sticks, knives and stones in their hands, and they were looking for the ESS guards. And they started chasing our staff and especially the ESS guards. They went to the back door and damaged the fence at the back door, entered into the clubhouse and they were screaming saying they'd rape all the girls. And after that some of them went into the bar, some of them went into the kitchen chasing all the staff and they did a lot of damage in the bar and took some liquor out of the bar. And there was one ESS guard chased into the kitchen, they stabbed the security guard in the kitchen and there was blood all over the kitchen. And we took him to the hospital and I'm worried about his wellbeing and his future, he was very, very badly stabbed. They also took quite a bit of equipment out of the kitchen, especially knives, and on the way they damaged glasses, spotlights, computers and things like that, whatever they found around, they did big damage inside. And finally again climbed over the fence and went to their vehicles and went. And you can probably imagine how everybody feels here, obviously we had to close the club down for today. And I'm not sure if the rides are going to continue tomorrow.
FOX: How long was the whole situation this morning, how long did it go on for?
BILSEL: This morning the situation, I mean thank God for that, I really thank God for that it wasn't long, it was about 15 minutes, but 15 long minutes.
FOX: Have you spoken to any of the senior management at Guard Dog Security?
FOX: And what have they said?
BILSEL: They specifically called me and apologised for it and my belief is that obviously it's out of their hands as well because it's out of control.
FOX: For people listening to this outside Lae, outside PNG, I mean it would be hard for them to comprehend that this sort of stuff could happen.
BILSEL: I have been in the hospitality industry in many countries around the world. I've seen raids in various countries and I've seen a lot of disturbance for one reason or another, but this would be the scariest moment in my life.