The clock is ticking for Nippon Steel and its takeover target US Steel. The companies have filed a lawsuit to nullify a ruling by US President Joe Biden to scrap their deal by February 2nd. The key issue now is whether a court will extend that deadline.

The two firms agreed on the acquisition back in December 2023 and it was reviewed by the Committee on Foreign Investment in the United States, or CFIUS.

However, CFIUS failed to reach a consensus, so the deal was sent to Biden, who blocked it on Friday, citing national security concerns.

The steelmakers filed their lawsuit on Monday.

Nippon Steel Chairman Hashimoto Eiji alleges CFIUS failed to conduct a proper review due to political intervention by the Biden administration.

Hashimoto said " We will never give up on developing our business in the US. Nippon Steel and US Steel agree there is no need or reason to give up."

But legal experts say the companies face a difficult challenge. A US President's ruling based on national security issues is difficult to overturn.

The onus will now be on the steelmakers to produce evidence showing the CFIUS review and Biden's order failed to follow proper legal procedures.