Power outage halts Vale’s Onca Puma nickel operations
Vale estimated it to have a preliminary impact of 1,500 to 2,000 metric tons on its fourth quarter nickel production.
By Sam Tobin and Eric Onstad
London – Hedge fund Elliott Associates on Monday lost an appeal against the dismissal of its lawsuit against the London Metal Exchange over billions of dollars of cancelled nickel trades.
The LME suspended trading and annulled $12 billion in nickel trades in March 2022 when prices shot to records above $100,000 a metric ton in a few hours of chaotic trade.
Elliott sued the LME at London’s High Court and its case was dismissed in November 2023. Elliott’s bid to overturn that decision was rejected by the Court of Appeal on Monday.
Judge Stephen Males ruled that the extreme price movement on March 8, 2022 was “a once in a generation event” and that the LME acted lawfully in cancelling the trades.
“To have allowed the 8th March trades to stand would have meant a real risk of what has been graphically described as a ‘death spiral’ in the international metals market,” he said in his written ruling.
“The cancellation was lawful as a matter of domestic law. Once that conclusion is reached, there is in practice no real scope for a claim.”
At a hearing in July this year, Elliott urged London’s Court of Appeal to overturn the ruling partly because the exchange failed to disclose documents.
Lawyers for Elliott said the LME belatedly released documents in May detailing its “Kill Switch” and “Trade Halt” internal procedures. It also newly disclosed an internal report that Elliott said detailed potential conflicts of interest at the exchange.
LME lawyers said the new documents were not relevant.
A spokesperson for Elliott said it was disappointed with the ruling.
“Elliott is further analysing the decision with its legal team and considering its next steps.”
Elliott and market maker Jane Street Global Trading brought a case demanding a combined $472 million in compensation, alleging at a trial in June last year that the 147-year-old exchange had acted unlawfully.
London’s High Court ruled last November that the LME had the right to cancel the trades because of exceptional circumstances, and was not obliged to consult market players prior to its decision.
“Mr Chamberlain was entitled to conclude that the market had become disorderly, and therefore to suspend trading … (and) the decision to cancel the trades was rational,” Males said in the ruling.
(Reporting by Sam Tobin, Eric Onstad and Pratima Desai; editing by William James and David Evans)
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