A US court ordered a temporary halt to a Department of Defence ban on investments in smartphone maker Xiaomi, stating the government failed to show sufficient evidence of links between the company and China’s military.

Xiaomi expressed pleasure with the ruling in a statement noting it believes a designation of it as a Communist Chinese military company was “arbitrary and capricious”.

The company said it will continue to request the court permanently remove the designation.

In the ruling, a federal US judge explained a preliminary injunction on the ban aimed to prevent Xiaomi from suffering “irreparable harm in the form of serious reputational and unrecoverable economic injuries”.

The judge added the ban deprived Xiaomi of its right to due process.

“Xiaomi is a publicly traded company that produces commercial products for civilian use, is controlled by its independent board and controlling shareholders, and is not effectively controlled or associated with others under the ownership or control of the People’s Republic of China or its security services,” the judge stated.

The vendor mounted a legal challenge to the US government action last month, arguing the designation was “factually incorrect”.