Judicial review: Elliott Associates and Jane Street Global Trading
Background to the litigation
Elliott Associates and Jane Street Global Trading have begun lawsuits (specifically, claims for judicial review, and under the Human Rights Act 1998), which challenge decisions made by the LME in relation to the nickel market on 8 March 2022.
The LME’s position
The LME has set out further information regarding the decisions made on 8 March, and why they were taken, in notice 22/057.
The LME acted to secure a fair and orderly market in the interests of the market as a whole. It is the LME’s view that the actions taken on 8 March were within the LME’s powers, and that those powers were exercised fairly and proportionately.
The LME and LME Clear filed their detailed grounds of defence in November 2022. The Judicial Review hearing will take place over three days from 20 to 22 June 2023.
The Judicial Review will be heard with the issues for determination being split. The first trial from 20 to 22 June will address the lawfulness of the LME’s decision-making process. If the Court finds that the LME acted lawfully, the second trial – to address remedies – would not be necessary.
The LME continues to vigorously defend itself against the lawsuits brought by Elliott and Jane Street.
Additional claims seeking damages under the Human Rights Act 1998 have been brought against the LME and LME Clear by two groups of claimants: 1) AQR Capital Management LLC, DRW Commodities LLC, Flow Traders BV, Capstone Investment Advisors LLC and Winton Capital Management Limited; and 2) Commodity Asset Management LLC, Pala Investments Limited, Pentimon Limited, Welton Investment Partners LLC and Sunrise Capital Partners LLC. These lawsuits were filed in the English Commercial Court and served on the LME and LME Clear on 6 and 7 March 2023 respectively. As these lawsuits do not raise any issues that are not already the subject of the claims brought by Elliott and Jane Street, the parties have agreed a stay of these additional lawsuits pending the final determination of the Elliott and Jane Street lawsuits.
The LME and LME Clear are aware of a further lawsuit having been filed in the English High Court on 7 March 2023 (but not served on the LME or LME Clear). It is expected that this claim will also be case managed by being stayed pending the outcome of the judicial review.
The LME’s position
The LME has set out in court filings the full details of its decision-making and explained the significant consequences that would have arisen for the entire market if it had not taken the action which it did. All the actions taken on 8 March were lawful and made in the interest of the market as a whole.
The LME remains confident that it will successfully defend the claims brought against it.
Pre-action disclosure: AQR Capital, DRW Commodities, Flow Traders, Capstone Investment Advisors and Winton Capital Management
In September 2022 hedge fund AQR Capital and four other parties (DRW Commodities, Flow Traders, Capstone Investment Advisors and Winton Capital Management) filed pre-action disclosure applications seeking further information and documents from the LME, surrounding the LME’s decisions in relation to the nickel market on 8 March 2022. The LME opposed the applications and argued they were wholly misconceived and that the requested disclosure was unnecessary.
On 23 December the court found in favour of the LME and rejected the applications in their entirety.