London 18/12/2014 - Russian aluminium company Rusal has been denied leave to appeal proposed changes to the London Metal Exchange's (LME) warehousing policies by the UK Supreme Court, the exchange said on Thursday.
“We have believed from the start that Rusal's complaint was without merit, and are glad that the Court of Appeal and the Supreme Court have recognised this,” the LME said in a release.
In October, the LME won its appeal against Rusal at the UK's Court of Appeal, allowing the exchange to implement its new linked load in/load out (LILO) warehousing rules as planned.
Under the rule change, all metal loaded into a warehouse over a three-month period is measured. If there is a queue of more than 50 calendar days, the affected warehouse would be expected to deliver out additional metal based on a formula.
“As the world's leading base metals exchange, the LME has a duty to ensure the integrity of its reference prices and the operation of a fair and liquid market for all industry participants. To this end, the implementation of LILO will take place as planned and the remaining elements of our warehouse reforms package will also be addressed," the LME said.
The LME initially lost the first court case, when on March 27, Justice Stephen Phillips ruled that LME's consultation into warehouse rule changes was "unlawful" and "unfair" because the exchange failed to address alternative options. In particular, the court said that the LME consultation should have included a robust discussion on the possibility of banning or capping of warehouse rents.
(Editing by Tom Jennemann)