Key Facts
- •The London Metal Exchange (LME) suspended and then cancelled nickel trades on March 8, 2022, due to a dramatic price spike.
- •Claimants (Elliott Associates LP, Elliott International LP, and Jane Street Global Trading LLC) alleged the cancellation was unlawful, causing significant losses.
- •Claimants sought declarations of unlawfulness and damages under Article 1 of the First Protocol (A1P1) of the Human Rights Act 1998.
- •The LME argued the cancellation was lawful under Trading Rule 22.1 (TR 22.1) to maintain a fair and orderly market.
- •The case involved a split trial, with judicial review issues heard first.
- •Claimants were not LME members but traded through members, accepting the LME Rules.
Legal Principles
Judicial review of decisions by public authorities, including commercial entities with regulatory functions.
HRA 1998, FSMA 2000, MiFID II, Recognition Requirements Regulations, RTS 7
Interpretation of LME Rules in light of overarching legislation and contractual context.
LME Rules, TR 22.1, TR 13, TR 17
Procedural fairness, including the duty to consult those potentially affected by decisions.
R v Secretary of State for the Home Department, Ex p Doody [1994] 1 AC 531; Bank Mellat v HM Treasury (No. 2) [2014] AC 700
Wednesbury unreasonableness test for irrationality in decision-making.
Associated Provincial Picture Houses Ltd v Wednesbury Corpn [1947] 2 All ER 680; R (Pantellerisco) v Secretary of State for Work and Pensions [2021] EWCA Civ 1454
Article 1, Protocol 1 (A1P1) of the European Convention on Human Rights concerning the protection of property.
Human Rights Act 1998
Senior Courts Act 1981, s. 31(2A) - denial of relief if the same decision would have been made absent unlawfulness.
Senior Courts Act 1981
Outcomes
Claimants' judicial review claims dismissed.
The court found the LME's actions were not ultra vires, procedurally unfair, or irrational. The cancellation decision was deemed lawful under TR 22.1 in exceptional circumstances to maintain market orderliness.
A1P1 claims dismissed.
The Elliott Claimants lacked a 'possession' within A1P1 as their trades were not fully concluded contracts. Jane Street's claim failed because the court found the LME's actions were lawful, and Jane Street consented to the LME Rules.