Solar panels are seen at a solar farm in Dunhuang, 950km (590 miles) northwest of Lanzhou, Gansu Province September 16, 2013. REUTERS/Carlos Barria

BRUSSELS (Reuters) - The European Union won backing from Europe’s second highest court on Tuesday for slapping hefty anti-dumping duties on Chinese solar panel imports, an issue which nearly triggered a trade war with China four years ago.

The move by the European Council to impose anti-dumping and anti-subsidy duties with an average rate of 47.7 percent in late 2013 came following a two-year long investigation by the European Commission which found that Chinese solar panels were sold at below market prices.

The EU executive said Chinese solar panel exporters to Europe also benefited from illegal subsidies.

A group of 26 companies subsequently challenged the decision at the Luxembourg-based General Court. Judges rejected the appeals.

“The General Court confirms the validity of anti-dumping and anti-subsidy measures for imports of solar panels from China,” the Luxembourg-based court said in a statement.

Since the 2013 decision, however, the Commission has softened its stance on the issue. Earlier this month, it proposed extending import duties on the panels by a shorter than initially proposed 18 months and eventually phasing them out.

The move underlines its desire to please EU solar panel makers and those benefiting from cheap imports as well as the desire to enlist China as an ally in fights against protectionism and climate change.