Sany wins appeal on US wind farms

China's Sany Group scored a landmark victory in a high-profile judicial action against United States President Barack Obama on Wednesday.

In 2012, Obama used a presidential order to block the purchase of four wind-farm projects near a navy base in Oregon by Ralls Corp, a US affiliate owned by two Sany executives, citing national security risks.

The heavy equipment manufacturer responded by suing Obama, claiming the order exceeded its constitutional rights and failed to provide detailed evidence.

A US federal appeals court ruled yesterday that the presidential order had deprived Ralls of significant property interests without due process of law. Sany, it said, had never had access to the information the White House used to make its decision and therefore was unable to address its concerns.

"This lack of process constitutes a clear constitutional violation," the US Court of Appeals for the District of Columbia Circuit said.

Ralls should be given access to any unclassified evidence the president relied on to decide the company had to sell the assets and operations connected to the Oregon project, it said.

Ralls should also be allowed to challenge the evidence, it said.

The lower court that dismissed Ralls' claims valued the wind farm assets at US$6 million.

While the ruling is a setback for the Obama administration and the Committee on Foreign Investment in the US (CFIUS), which reviews acquisitions of US businesses by foreign investors, it might not change the eventual outcome in the dispute. Obama retains the power to block the investment.

Still, the ruling is a win for foreign investors seeking to expand in the US as it gave some insight into the review process that weighs the national security risks of foreign acquisitions.

Both China's government and its businesses have called for greater transparency in the US national security review process.

A lawyer for Ralls, Tim Tingkang Xia, told Reuters that the company was "heartened that the court today upheld Ralls' arguments in every respect. We look forward to further vindicating Ralls' right to be treated fairly and equally under the law."

Former solicitor general Paul Clement argued the case on behalf of Ralls.

A Justice Department spokeswoman said the agency was reviewing the ruling, according to Reuters.

Sany welcomed the ruling, saying the victory had historic significance.

"Sany and Ralls believe that their legitimate interests will eventually be protected by fairness and justice," it said in a statement.

The court decision might also influence other deals currently being reviewed by the CFIUS, including the acquisition of IBM's server business by China's Lenovo Group, the world's largest personal-computer maker.