London 15/05/2014 - The UK Court of Appeal on Thursday granted the London Metal Exchange (LME) leave to appeal against the judgement made late in March against it in a judicial review brought by UC Rusal of Russia.
Rusal, the world’s largest aluminium producer, challenged the LME in London's High Court, alleging that the exchange's proposed new warehouse rules could create "severe hardship" for producers by artificially depressing the 'all in' price of aluminium.
At the time, the presiding judge, Justice Phillips, found the LME's original consultation and subsequent proposed rule warehousing changes to be "unlawful" and "unfair". The LME therefore had to suspend the implementation of a new linked load-in/load-out warehousing policy scheduled for April 1 after the UK judicial review ruled in Rusal's favour.
"We are pleased by the decision of the Court of Appeal to grant us leave to appeal and to expedite the appeal 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 LME said in a statement on Thursday.
In the March judgement the court said that the LME should have consulted on alternative options, in particular the option of the banning or capping of rents in queues. In Detroit and Vlissingen, waiting times to remove LME-registered aluminium are some two years.
In today's court order, Lord Justice Jackson said: "The judge's analysis, if correct, places onerous obligations on any public body conducting a consultation on complex issues in a politically sensitive area."
"The public body must carry out its own preliminary assessment and winnowing in order to provide proper focus for the consultation exercise, as LME did in this case. In my view the grounds of appeal have a real prospect of success."
(Editing by Mark Shaw)