British court clears London Metal Exchange to appeal Rusal ruling
England's Court of Appeal has allowed the London Metal Exchange (LME) to challenge a lower court's ruling against it, in a case brought by Russian aluminium giant Rusal to block the exchange's plan to reform its warehouse policy.
England's Court of Appeal has allowed the London Metal Exchange (LME) to challenge a lower court's ruling against it, in a case brought by Russian aluminium giant Rusal to block the exchange's plan to reform its warehouse policy.
"In my view, the grounds of appeal have a real prospect of success," Lord Justice Jackson said yesterday.
A lower court ruling in March favoured Rusal, with the judge saying the consultation on warehouse reform was unfair and unlawful.
That ruling threw plans by the world largest metal exchange for an overhaul of its much-criticised warehousing rules into turmoil.
The overhaul was aimed at giving industry players easier access to stock from its approved warehouses worldwide and cutting waiting times.
An LME spokeswoman said the bourse was pleased with the Court of Appeal decision, "as we continue to believe that Rusal's complaint was without merit in its entirety and are conscious of the need to find a solution for the market as quickly as possible".
The March ruling led Hong Kong Exchanges and Clearing, which bought the metal exchange in 2012, to make a provision of £200,000 (HK$2.63 million) during the first quarter for legal costs in the case between the LME and Rusal.
Late last year, the LME proposed rules to overhaul its delivery system from April that would have required its approved warehouses worldwide to release more stock once waiting times exceeded 100 days.
Hong Kong-listed Rusal, the world's largest aluminium producer, bought the case to court because it opposed the reform and wanted the LME to leave its warehousing rules unchanged.
