November 4, American East time, Ralls Corp., an affiliate of China's Sany Group Co., announced that it officially reached a favorable settlement with the U.S. government concerning a legal dispute that Ralls Corp. purchasing 4 wind farm projects in America's Oregon state.

Ralls Corp. withdrew the claims against President Obama and CFIUS, while the U.S. government dismissed a lawsuit that requests Ralls to implement the president's order. Up to this point, the public widely watched Sany Group suing American President Obama case settled down.

According to the terms of settlement, Ralls Corp., the affiliate of Sany Group, is allowed to transfer the four wind farm projects to a desired purchaser selected by Ralls Corp. The agreement also made it clear that, CFIUS has confirmed the other Ralls Corp.'s acquisition of wind farm projects in America don't do harm to the national safety, and more trading and investment declaration in America from Ralls Corp. and Sany Group will be welcome.

On July 15, 2014, United States Court of Appeals for the District of Columbia made a decision saying that the President's order forbidding Ralls Corp.'s acquisition of the four wind farm projects in America signed by President Obama on September 28, 2012 violated the procedural justice in 14 amendment of U.S. federal constitution, and deprived Ralls Corp.'s constitution protected property right. The court ruled the U.S. government to offer corresponding procedural justice to Ralls Corp. Based on the above sentence, U.S government showed Ralls Corp. nonconfidential information relied by CFIUS and President of America when they made relevant decisions, and Ralls Corp. also expressed objection about the information. Subsequently, the U.S government had a negotiation with Ralls Corp, and its lawyer team, and finally reached conciliation.

Xia Tingkang, the chief lawyer of Sany Group American lawyer team, accepted the interview from China Central Television's Financial Channel, and said, 'About this conciliation, first of all, it justified for Sany, which means Sany coming to America, will not cause any threat to U.S national safety; secondly, the further promotion and use of Sany's products will not affect U.S. national safety. It will give American market a competitive choice.

Ralls sued Obama and the multiagency Committee on Foreign Investments in the U.S. in 2012 for barring the wind-farm project near an area where the Navy conducts training for bombing and electronic-combat maneuvers, and develops drones.

Obama ordered Ralls to divest all of its interests in the wind-farm project that consisted of locations near or within restricted Navy airspace. The decision marked the first overseas purchase blocked by a U.S. president on national-security grounds in 22 years.

News Background

In 2012, Ralls Corp., an affiliate of China's Sany Group Co. invested wind farm project in America. Unexpectedly, on the ground of possibility of endanger American national safety, the President Obama objected this project. Because of this, Ralls Cop, filed a lawsuit against Obama, saying that this decision is unconstitutional, and should be reviewed.

This is the first time a foreign enterprise came forward to challenge the White House and U.S. national security reviewing system from unconstitutional reviewing perspective. After two years, in 2014, U.S. court announced that Obama's president's order is unconstitutional, and Ralls Corp. won the case. Henceforth, this Chin's enterprise's difficult right protection road has finally obtained victory. Let's review the cause of the struggle.

In April 2012, Ralls Corp., the affiliate of Sany Heavy Industry in the United States, acquired the wind farm project Butter Creek which near the naval base of Oregon State from Tema US, the State Grid Corporation of Greece, and got all the approval and permits for this project construction. Sany Heavy Industry has invested about 13 million dollars into this project. In June 2012, Sany Heavy Industry Corp. suddenly received the request from CFIUS that they ask to hold a hearing for this wind farm project. On July 25, 2012, after the hearing, Ralls Corp. the first time received a temporary injunction, which ask the project to be stopped immediately, and forbid store any equipment or move away any related infrastructure, not allow anyone to access except CFIUS authorized Americans, on the ground of 'been suspicious of threating national security'.

On August 2, 2012, Sany Heavy Industry Corp. received the second temporary injunction from CFIUS which forbid any transfer of the project, and CFIUS said they had no any compensation system for forbidden project. Since then, the prelude of legitimate right and interest battle opened.

On September 12, 2012, Ralls Corp. filed a lawsuit against CFIUS at Federal District Court for the District of Columbia of America.

On September 28, President Obama of the United States signed the president's order, supporting the adjudication from CFIUS, to stop the wind farm project on the ground of 'been suspicious of threating American national security'.

On October 1, 2012, Ralls Corp. submitted the updated amendment to Federal District Court for the District of Columbia of America, adding President of America Obama as defendant, which put American President and CFIUS together in the dock.

On October 9, 2013, Federal District Court for the District of Columbia of America made the preliminary decision in terms of the Ralls Corp. suing American President Obama case, dismissed the claims that Sany Heavy Industry Co. accusing Obama's President order unconstitutional, which means Sany Heavy Industry Co. lost the first trial.

On July 15, 2014, the collegiate bench of Federal District Court for the District of Columbia of America made a decision in terms of the Ralls Corp. suing American President Obama case again, claiming that Obama's President Order stopping the Ralls Corp.'s Butter Creek wind farm project in Oregon State violates the procedural justice. This time, the court decision marked the rolling victory of Sany Heavy Industry Corp. suing CFIUS and President Obama.

Experts: The reconciliation between Sany Group and the United States can be a classic example of Chinese enterprise operating in the United States

This time, Sany Heavy Industry Corp. officially reached a favorable settlement with the U.S. government can be regarded as a classic example of Chinese enterprise operating in the United States. And what influence will this result impact on Sino-U.S. trade development? 　　

Ding Yifan, a researcher of the Institute of World Development Research Center, said in an interview 'If other Chinese enterprises encounter unfair treatment, they are encouraged to deal with it by means of law, like Sany Heavy Industry Corp. So this precedent is very useful to successors'.

The dean of Tsinghua University Economic Diplomacy Research Center, He Maochun said 'This reconciliation between Sany Croup and the U.S. government also has an positive effect on the future Sino-U.S. relationship, especially on the negotiation of Sino-U.S. investment protection agreement, and the final operating rule formation of two countries. The two sides should make some institutional arrangements in terms of Sino-U.S. bilateral investment protection. So we can say this case is with great enlightenment.

Though this lawsuit is end up with Sany Heavy Industry Corp.'s victory and reconciliation, some experts remind that, in overseas business, Chinese enterprise should as far as possible avoid the related adventures in the early period of investment and cooperation, evaluate the legal environment well, don't consider using legal means until the dispute arises.

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