Ralls Corp, owned by two executives of Chinese heavy-equipment maker Sany Group, is entitled to know why US President Barack Obama decided to force the company to divest its stake in an Oregon wind-power project, a Washington federal judge has ruled.

On Friday, US District Judge Amy Berman Jackson said Ralls can continue the part of its lawsuit that calls for Obama to explain the legal basis for his Sept 28, 2012, executive order forcing the sale. The president cited national security concerns, specifically that all four of the project's wind farms are within or near restricted air space of a US Navy weapons-testing facility in Oregon.

The judge said in her ruling that "a due-process claim that raises purely questions about the process" can proceed through the US legal system.

Jackson, however, rejected the bulk of Ralls' suit contesting the authority of the president to require the sale. She said presidential orders aren't subject to judicial review but "courts can hold hearings on whether the government deprived Ralls of its property without due process of law".

"The statute expressly authorizes the president to do what he deems necessary to accomplish the prohibition - not merely to issue it," she said.

Jackson cautioned that although she will hear Ralls' limited case for an explanation of why the sale was ordered, she could decide that "opportunities provided to the plaintiff here comported with due process, or the plaintiff is not entitled to the reasons".

Nonetheless, Ralls hailed its partial victory as a breakthrough.

Sany President Xiang Wenbo said in a Friday night post on Weibo, a popular social-media service in China, that the judge had decided to "hear the case". He didn't elaborate.

Late Saturday night, Xiang said in another Weibo post that Sany will consult with lawyers and experts about progress in the case.

Ralls, which is incorporated in Delaware and operates out of Peachtree City, Georgia, is privately owned by two Chinese nationals - Duan Dawei, chief financial officer of Sany Group, and Wu Jialiang, a Sany vice-president and general manager of subsidiary Sany Electric Co.

Sany, listed among Fortune magazine's 500 global companies, has been hit by a slowdown in the Chinese market and has big hopes for its overseas business, particularly in the United States.

Through the first three quarters of 2012, Sany Heavy Industry Co, the Shanghai-traded entity that is the company's core business, saw revenue decline 1.4 percent, to 40.75 billion yuan (about $6.54 billion), from the same period a year earlier. Profit was down more than 60 percent.

Sany America, the North American arm of Sany Heavy Industry, was formed in 2006. Based, like Ralls, in Peachtree City, it has about 100 employees who are engaged in manufacturing as well as research and development out of Sany America's $60 million complex.

Oregon Windfarms sold the four small farms in March 2010 to the US arm of Greek company Terna Energy, which later sold them to Ralls, which was formed to install wind-power stations using Sany-made turbines. Installation of the turbines began in April 2012 and was expected to finish by year's end.

But in July, the Committee on Foreign Investment in the United States, citing national security grounds, told Ralls to stop and remove all equipment. The US Navy had expressed concern over one of Ralls' wind farms because of its location in restricted airspace around Naval Weapons Systems Training Facility Boardman. Ralls agreed to relocate that farm and acceded to the Navy's request to pursue additional approvals from Oregon's Public Utility Commission.

Obama's Sept 28 executive order for Ralls to divest its holdings in the wind farms was the first time since 1990 that a US president has stopped a business transaction due to national security concerns.

Three days later, Ralls sued Obama, US Treasury Secretary Timothy Geithner and CFIUS for "unconstitutional deprivation of property without due process, and unconstitutional violation of the right to equal protection under the law". The company said Obama exceeded his authority and that the US government failed to offer evidence or an explanation of what national security risks it perceived from the deal.

Ralls also claimed the company lost more than $20 million from its investment and consequences of the wind projects' suspension.

Xiang, a high-profile business executive known for his comments in Chinese media on matters including the 2006 acquisition of Sany rival Xuzhou Construction Machinery Group by US private-equity giant Carlyle Group, has portrayed the lawsuit as a Chinese company challenging US government "prejudice".

In his Weibo post on Saturday, he said the ruling was the first time a judge in the US had decided to hear a foreign company's claims against a US president. Xiang didn't address the judge's rejection of most claims in the suit or the assessment of many legal and trade experts that it will be almost impossible for Ralls and Sany to win the case.

Tim Xia, a lawyer and spokesman for Ralls, was quoted by Bloomberg News as saying that the judge's ruling keeps alive "Ralls' primary claim that the presidential order violated constitutional due process".

"We look forward to litigating this matter on the merits and vindicating the rule of law," he said.

In an e-mail, Treasury Department spokeswoman Holly Shulman told Bloomberg: "We are reviewing the decision. We continue to believe the lawsuit has no merit, and we will continue to defend the case vigorously."

China Daily