I was playing in a 300 point tournament a few weeks back, and I want clarification on the Split and Merge techniques.

An opponent was using AvX Colossus at 125 and a Shadowcat at 56 points, and 2 other X-Men pieces. First turn he merged the Colossus and Shadowcat into the W&X LE. Second turn he split them, and fielded the W&X Chase Colossus at 295. I immediately called BS, and had the judge come over. We argued our points, using the PAC card. I said that "those characters" refers to the 2 characters he used previously to merge into the Duo. He said that the Colossus had the qualifying name, and as such he should qualify under the "those characters" term. The Judge ruled in my favor, but I just want clarification as to the actual ruling of this.

You were correct. Had he Merged P5 Colossus into the duo in the first place (for whatever reason), then he'd be able to. However, THAT Colossus had never been part of the duo and was too many points, so he wouldn't be able to split into P5 Colossus.

He could have split into the 150 point P5 Colossus, but not the 295.