Via this article, and an article in PCG for this month.
After reading this I can understand why Microsoft are saying that the team is infringing on Intellectual Property. However, they have not done themselves any favours by leaving them to develop it for 3 years, before finally saying no.
People, me included, will want answers as to why they have waited for so long. I dont really see a problem with it, as, citing the DOW example, where a mod was created to include the Tau, which was then released as a DOW expansion as one of the major features. I dont really see many people rushing to download (as its free) the halogen mod, and it wouldn't be a patch on Halo Wars anyway, so whats the problem?