Elliott’s appeal over London Metal Exchange nickel shutdown dismissed

A UK court has dismissed an appeal from feared activist investor Elliott against the London Metal Exchange’s (LME) move to cancel $12bn of nickel trades in 2022.

Elliott issued legal proceedings against the LME last year to challenge a decision to scrap billions of dollars in nickel trades on 8 March 2022, after fears around the Russia-Ukraine war sent nickel prices rocketing more than 250 per cent.

During the market’s morning session, the LME suspended nickel trading and later published a notice cancelling all nickel trades entered into on that day before the suspension.

Elliott Associates, along with others, claimed that the cancellation caused loss net profits totalling about $456m.

The LME faced legal action over that decision after the parties filed a judicial review, resulting in the parties attending a hearing at the High Court in June 2023.

Last November, a judgment was handed down which dismissed the claims for judicial review.

Trading firm Jane Street brought a $15m damages case, which was also thrown out.

Elliott applied an application to the Court of Appeal, seeking to overturn the High Court’s decision. The parties went for a hearing in early July 2024.

However, today, the court ruled that “the LME was legally required to ensure that it had the power to cancel trade in the event of extreme price movement during a short period, which is precisely what occurred on the morning of 8th March 2022.”

Elliott Associates application to appeal was dismissed.

Commenting on the judgment, a spokesperson for London Metal Exchange Group said: “We are pleased that the Court of Appeal has dismissed Elliott’s appeal in a unanimous ruling which confirms that the actions taken in the nickel market in 2022 were lawful and recognises the LME’s legal obligation to ensure that it had the power to cancel trades in the event of extreme price movement during a short period.”

While a spokesperson for Elliott noted: “Today’s decision of the Court of Appeal overturns certain key findings of the Divisional Court which Elliott considered to be obviously wrong, including the finding that Elliott’s trades did not represent valuable and protectable interests.”

“Nevertheless, Elliott is naturally disappointed that the Court of Appeal upheld the lower court’s finding that the LME’s decision to cancel trades in March 2023 was lawful, and Elliott is further analysing the decision with its legal team and considering its next steps,” they added.