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Sany vs Obama case accepted

By Zhao Qian (Global Times)

08:09, March 04, 2013

Chinese heavy industry giant Sany Group Co said Saturday that its key claim in a lawsuit against US President Barack Obama for blocking its subsidiary's wind farm projects has been accepted by a US district court.

"One of our five claims, which is the key claim that the president deprived Ralls Corp of its legal property without due process, was accepted by the district court on February 22," said Wu Jialiang, CEO of Ralls Corp, at a media briefing in Beijing. Ralls Corp is owned by two executives of Sany Group.

"We will carry on the lawsuit until the president gives us an appropriate explanation and Sany finally receives compensation," Xiang Wenbo, board director of Sany Group, said at a media briefing in Beijing.

Xiang said he believes there is a possibility of Sany winning the case and recouping losses.

Last September, Obama ordered Ralls to divest its interests in wind farm projects near a naval training facility in Oregon, citing national security concerns.

But Sany said its investment, which was in accordance with federal laws, did not pose any security threat, and that the Committee on Foreign Investment in the United States (CFIUS) and Obama banned its investment without any legal explanation.

Sany filed a lawsuit containing five claims against Obama and the CFIUS in October, and the US District Court for the District of Columbia reviewed the lawsuit in November.

This is the first time a US president has been sued by a Chinese enterprise since the CFIUS was set up in 1975, according to Xiang.

No foreign enterprise had ever sued the CFIUS, which is an inter-agency committee authorized to censor foreign companies that invest in the US.

"This is a big breakthrough not only for Chinese enterprises but also for US law," Xia Tingkang, an attorney representing Ralls, told the briefing.

According to section 721 of the Defense Production Act of 1950, decisions made by the president and the CFIUS are above judicial review in the US.

Xiang said the case sets up a model for other Chinese enterprises to protect their legal rights when facing similar resistance in the US.

"Chinese enterprises should start lawsuits as quickly as possible if they face unfair treatment in the US, rather than just conceding," Hao Junbo, a multinational litigation and claims expert, told the briefing.

Hundreds of foreign firms have come under review by the CFIUS since it was set up, and most of those enterprises were from China, according to Xia.

"Recently, the US government has paid more attention to Chinese high-tech companies like Sany and telecom companies Huawei and ZTE, which are regarded as its strong competitors, and created more investment obstacles for them," said Zhang Guoqing, a professor from the Institute of American Studies at the Chinese Academy of Social Sciences.

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