HKEX: Wholly-owned subsidiary London Metal Exchange sued for US$456 million
The Hong Kong Exchanges and Clearing announced that wholly-owned subsidiaries of the London Metal Exchange (LME and LME Clear) have been named as defendants in a judicial review claim brought by Elliott Associates, LP and Elliott International, LP (the plaintiffs).The claim was lodged with the High Court of England on 1 June 2022 and served on the LME and LME Clear on 2 June 2022 (Hong Kong time).
On 7 March 2022 (UK time), there was a significant increase in nickel market prices, as stated in LME Circular 22/057 dated 10 March 2022.However, the LME believed that trading as of the evening's close was orderly.Then in the early hours of March 8, 2022 (UK time), nickel prices rose sharply for a short period of time.After discussions with LME Clear, the LME has decided to suspend trading in all nickel contracts from 08:15 UK time on the same day and cancel all trades executed on or after 00:00 UK time on 8 March 2022.The decision to suspend trading comes as the nickel market is already out of order.The LME retroactively cancelled the transaction in order to return the market to the last point in time when the LME could be confident that the market was functioning in an orderly manner.It is important to stress that the LME has always acted in the overall interest of the market.LME nickel trading subsequently resumed on 16 March 2022 on all LME venues where trades are executed.
The claim seeks to challenge the decision to implement and maintain the cancellation of nickel contract transactions that the plaintiffs claim was executed on or after 00:00 UK time on 8 March 2022.The plaintiff claimed that the decision was unlawful under public law and/or constituted a violation of the plaintiff's human rights.Plaintiffs claim $456 million.LME management believes that the claim has no legal basis and the LME will vigorously defend it.
