LME accused of violating human rights convention in nickel trading lawsuit

Elliott Management Corp. and Jane Street Global Trading LLC have alleged that The London Metal Exchange Ltd. violated the European Convention of Human Rights in lawsuits seeking a combined $471.7 million over the suspension of nickel trading in March, Reuters reported July 14, citing court documents filed with London's High Court.

Elliott and Jane Street claimed the LME breached their rights to the "peaceful enjoyment" of possessions when it paused trading March 8 after the LME three-month spot nickel price surged to a record $101,365 per tonne.

The two firms also accused the LME of favoring some market participants and breaching its policies while being allegedly unclear about rules on its cancellation powers.

An LME spokesperson told S&P Global Commodity Insights that suspending trading was within its powers.

"At all times the LME sought to act in the interests of the market as a whole," the spokesperson wrote in an emailed statement. "The LME, therefore, continues to consider that Elliott's and Jane Street's grounds for complaint are without merit, and the LME will defend any judicial review proceedings vigorously."

The unprecedented spike occurred after nickel and stainless steel giant Tsingshan Holding Group Co. Ltd. tried to cover a short position, causing a quick increase in nickel prices. Commodity markets were already volatile at the time due in part to Russia's Feb. 24 invasion of Ukraine.

Elliott is claiming damages of $456.4 million, while Jane Street is seeking $15.3 million as they request the court to launch a judicial review. The LME is expected to provide a more detailed response if the court grants the petition.

A spokesperson from Elliott had no comment when asked by Commodity Insights. Jane Street did not immediately respond to a request for comment.

In late June, the LME hired management consultancy Oliver Wyman to conduct an independent review of the trading suspension, with a final report expected in December.

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