Bermuda-registered Brilliance China Automotive Holdings Ltd. overcame one legal hurdle yesterday with the news that the Supreme Court had discharged an injunction, sought by its former chairman Yang Rong, against the sale of a large stake of the minibus maker to Chinese authorities.

But the legal battle with Mr. Yang over the ownership of 39.45 percent stake in Brilliance China shares is expected to rage on.

Acting Justice Philip Storr has yet to make a decision on a writ filed by Mr. Yang, pending his submission of a statement of claim on the case.

"A hearing to strike out the writ was adjourned to a later date, pending the plaintiff's (Mr. Yang's) submission of a statement of claim," the company's spokeswoman told Dow Jones, citing the court's ruling late on Tuesday .

Turning to the injunction, she said it was dropped because it lacked merit and that the transfer of shares will stand. Mr. Yang, now a fugitive in the US after being accused in China of committing economic crimes, has sought a court order in Bermuda to halt the transfer of the 39.45 percent stake in the Chinese minibus maker.

That stake is controlled by the Chinese Financial Education Development Foundation, which in December wanted to sell that stake to the Liaoning provincial government. The latest ruling implies that Bermuda-registered and Hong Kong-listed Brilliance China is now a step closer to freeing itself from its legal tussle, which has weighed on the auto maker's stock.

Market watchers see the stake transfer as being positive for the company as it would clarify Brilliance China's ownership structure and help clear the way for a planned joint venture with German auto maker Bayerische Motoren Werke AG.