US federal judge Rudolph Contreras in Washington issued a preliminary injunction Friday preventing the US Department of Defense from restricting US investors from investing in Xiaomi Group.
On Jan. 14, the US government placed nine Chinese companies, including Xiaomi, on a so-called Chinese military-related blacklist, preventing US investors from investing in the companies.
The investment ban is set to take effect next week. Contreras, however, temporarily called off the ban on Friday.
He argued that Xiaomi would likely reverse the ban altogether as the lawsuit unfolded, and issued a preliminary injunction to prevent Xiaomi from suffering "irreparable harm.
In response to concerns raised by the US government about threats to national security, Contreras said, "The court is somewhat skeptical that weighty national security interests are actually implicated here."
Xiaomi later released a statement saying that it was relieved to see the outcome and wished to re-emphasize that Xiaomi is an independently operated and managed public company with decentralized equity and publicly traded shares.
"We make electronics for the average consumer," Xiaomi said.
The decision to place Xiaomi on the China military-related list was arbitrary and capricious, Xiaomi said, adding that the company will continue to ask the court to ultimately rule that the decree is invalid for Xiaomi.