US judge rules LME out of case as 'organ' of British government

A judge has dismissed London Metal Exchange as a defendant from US antitrust litigation accusing banks and commodity companies of conspiring to drive up aluminium prices by restricting supply, hurting manufacturers and purchasers.

In a decision made public on Tuesday, US District Judge Katherine Forrest in Manhattan concluded that the LME was an "organ" of the British government, and therefore immune from the lawsuit under the Foreign Sovereign Immunities Act.

Forrest acknowledged that her decision may at first glance seem "somewhat surprising and counterintuitive", noting that the LME is a privately held, for-profit company subject to extensive regulation.

But the judge said that the relevant case law "tips decidedly" towards a grant of immunity, noting that the LME was required by law to perform "the decidedly public function of market regulation".

Established in 1877, the LME was bought in December 2012 by Hong Kong Exchanges and Clearing.

The LME says more than 80 per cent of non-ferrous metals futures business is transacted on its platforms, totalling US$14.6 trillion last year.