Two Chinese firms accused of conspiring to increase the prices and lower supply of Vitamin C outside China won dismissal of a $147 million antitrust verdict after a federal court ruled that they they were acting under China's law.

North China Pharmaceutical Group Corp. and its manufacturing unit Hebei Welcome Pharmaceutical Co. should have not been forced to defend after China formally advised that its laws required the pharmaceutical companies to violate the United States' Sherman Act, the 2nd US Circuit Court of Appeals in New York ruled on Tuesday, as cited by Reuters.

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The Vitamin C makers "were required by Chinese law to set prices and reduce quantities of vitamin C sold abroad and doing so posed a true conflict between China's regulatory scheme and U.S. antitrust laws," U.S. Circuit Judge Peter Hall wrote in a 45-page opinion, as quoted by Bloomberg.

The lower court's disbelief that such law, which violates US antitrust law, that exists in China was "highly inappropriate," Jonathan Jacobson, who sided the two Chinese firms said.

The case filed in 2005 was made by vitamin C purchasers, including Texas-based Animal Science Products Inc. and New Jersey-based food firm Ranis Co. The complainants said the anticompetitive conduct soared the price of the supplements from just about $2.50 to $15 per kilogram and that they were forced to pay for food additives with artificially inflated prices.

Last March 2013, a jury form Brooklyn, New York, favored against the Chinese companies, holding them liable for fix pricing. The judge awarded $147 million in damages and issued an order to bar the firms from violating the law in the future. The trial refused to believe that China's law would compel companies in anticompetitive conduct, the Wall Street Journal reported.

However, the ruling, in a "historic" first, prompted the Chinese government to issue briefs in support of the two companies' claims.

The appeals court ruled the case of Chinese vitamin C makers about 20 months after hearing a series of oral arguments. 

TagsNorth China Pharmaceutical Group Corp., Hebei Welcome Pharmaceutical Co., Animal Science Products Inc., Ranis Co., U.S. antitrust law, fix pricing, vitamin c, Chinese Vitamin C Makers