France's highest administrative court on Tuesday ordered the government to stop blocking the registration of Mercedes-Benz cars, saying the cars did not pose a serious environmental threat as claimed by France.
The Council of State said it had "serious doubt" about the government's use of a European safeguard clause to suspend the registration of Mercedes A-, B-, SL-and CLAclass cars and gave the state two days to lift the two-monthold ban.
The French government suspended registration of the Mercedes models in June because they use an air-conditioning coolant, R134a, that is banned under a new EU "green coolant" directive.
Daimler is refusing to use a less polluting EU-approved coolant, R1234yf, saying tests show it to be a fire hazard in crash situations - allegations rejected by the coolant's U.S. producer, Honeywell.
In July, a court in Versailles rapped the government for blocking Daimler's sales.
But the government promptly invoked an EU clause that allows member states to temporarily block vehicle registrations on health, environmental or safety grounds.
The Council of State cast doubt on the legality of that move, saying the commercialization of the cars was unlikely to "seriously harm the environment."
The court's ruling is preliminary. A final ruling is not expected for months.
Daimler, which complained that the ban was holding up the sale of around 4,500 vehicles in France, said it was "delighted" by the decision.
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