High Court Upholds Lawfulness of London Metal Exchange Decisions in Landmark Case

Citation: [2023] EWHC 2969 (Admin)
Judgment on


In the recent judicial review case of Elliot Associates LP & Ors, R (on the application of) v The London Metal Exchange & Anor, several key legal principles were put to the test before the High Court of Justice. This article provides an in-depth analysis of the case, distilling the essential legal issues and principles applied, with direct references to the case summary provided.

Key Facts

At the core of the case were decisions made by The London Metal Exchange (LME) and LME Clear regarding the massive surge in nickel prices and subsequent trade cancellations. The claimants, being adversely affected, sought declarations of unlawfulness and damages relying on the Human Rights Act 1998, specifically implicating their rights under Article 1 of the First Protocol (A1P1). The case nuances involved the interpretation and enforcement of trading regulations, procedural fairness, and the notion of ‘possessions’ under A1P1.

Ultra Vires and Proper Purpose

The principle of acting within the confinements of legal authority was examined. The claimants argued that the cancellation of nickel trades was beyond the LME’s powers (ultra vires) and for an improper purpose. The court determined that the powers under Trading Rule 22.1 were in line with the overriding legislative framework, and that considering risks of default by Members was indeed a relevant and proper factor in the decision-making process.

Procedural Fairness

Procedurally, the claimants contended that there was a failure to consult affected parties before the Cancellation Decision. Drawing from established case law such as R v Secretary of State for the Home Department, Ex p Doody, the court weighed the urgency and practicability of consultation in the decision-making process. Due to the urgent nature of the decisions required and the fact that the claimants entered the trades with knowledge of the LME Rules, including the possible cancellations under TR 22.1, no obligation for prior consultation was found.

Rationality and Relevant Considerations

The claimants challenged the decision under principles encapsulated in Secretary of State for Education v Tameside MBC, asserting that the LME failed to consider the right factors. However, the court accorded a significant margin of decisional discretion to the LME as a specialist decision-maker in a niche commercial field. The assessment of a disorderly market was accepted as rightfully being within the expertise of the LME’s CEO.

Article 1, Protocol 1 Claims

In assessing A1P1 claims, the court scrutinized whether the claimants had ‘possessions’ and if so, whether there was an interference or deprivation that violated A1P1. Jane Street’s fully cleared trades were acknowledged as ‘possessions’. However, for the Elliott Claimants, the anticipated contracts were not seen as ‘possessions’ under A1P1. The court reiterated that ‘possessions must be of existing interests or with a sufficient basis in national law.


The court ruled that both the Cancellation Decision and the 8 March Margin Decision were lawful and dismissed the claimants’ challenges based on procedural fairness and rationality. Regarding the A1P1 claims, the court held that while Jane Street’s rights were recognized, their consent to the contractual framework negated the claim of interference. The Elliott Claimants’ A1P1 claim failed as they had no recognized ‘possessions’ at the time of the Cancellation Decision.


The case illuminates the judicial leanings toward allowing expert bodies discretion within their specialist purviews, emphasizing that consent to rules by knowledgeable commercial entities carries significant weight. The judgment affirms the principle of ultra vires, accentuates the measured approach to procedural fairness, outlines the bandwidth of rationality, and clarifies the spectrum of ‘possessions’ under A1P1 in the context of complex financial market operations. This case serves as a guiding reference for legal professionals navigating disputes where regulatory decisions affect commercial interests within the realm of financial trading markets in the UK.

Related Summaries