Hogan Lovells secures landmark victory for the London Metal Exchange in Court of Appeal judgement

Press releases | 07 October 2024

London, 7 October 2024 – Global law firm Hogan Lovells has secured a resounding victory for the London Metal Exchange (LME) and its clearing house, LME Clear, in the Court of Appeal (CoA). In a unanimous judgment handed down today, the CoA has dismissed the appeal brought by Elliott on all grounds, upholding the earlier ruling by the Divisional Court and confirming that the actions taken by the LME during the volatile nickel market conditions of March 2022 were entirely lawful, justified and proportionate.

The case concerned Elliott's challenge to the LME's decision to cancel nickel trades from 8 March 2022, following unprecedented market instability. Elliott alleged that the cancellation was outside the scope of the LME’s powers, procedurally unfair, irrational and violated Elliott’s human rights, and sought damages of $456 million under the Human Rights Act 1998 (HRA 1998). However, the CoA has reaffirmed the LME’s ability to take appropriate steps in extraordinary circumstances to maintain the orderly functioning of the market.

Charles Brasted, head of Hogan Lovells’ Public Law and Policy team and deputy leader of the firm’s Global Regulatory & IP practice, said: “The Court of Appeal has comprehensively rejected Elliott’s appeal, and confirmed that LME’s intervention was lawful, rational and – in the exceptional circumstances on the day – necessary, as we have argued from the outset. The ability of investment exchanges to intervene in response to market disorder is a critical part of the regulatory system, and this judgment makes clear that investment exchanges need to be able to exercise that critical function when the need arises and using their expert judgement. It has been a great pleasure to work so closely with the LME team and our counsel team on this important piece of regulatory litigation, which the Court acknowledged was complex in terms of background, even though the legal answer is simple and clear.”

Michael Thomas, partner at Hogan Lovells, Head of Investments and Markets and the Client Relationship Partner for the LME, added: “This is not only a great result for The London Metal Exchange, but also a helpful commentary on the regulatory framework that governs investment exchanges and financial market infrastructures. It is an important reminder that these entities play a critical role in helping to manage the risks in the financial system and need to be able to use their rulebook powers to take prompt action when those risks arise. Furthermore, the victory is a testament to the collaborative efforts of the LME legal and business teams, our Counsel team, and the multi-disciplinary team at Hogan Lovells, bringing together a wealth of experience in public law, financial regulation and technical legal strategy.”

The Hogan Lovells team also included Andrew Eaton (counsel), Michael O’Donoghue (senior associate), Fraser Eccles (associate), Georgia Crawford (associate), Maddy Vincent (associate), and Alissa Manuel (trainee solicitor).

Hogan Lovells instructed Jonathan Crow KC (4 Stone Buildings), James McClelland KC, Emily MacKenzie, Alastair Richardson (Brick Court Chambers), and Rebecca Loveridge (Fountain Court Chambers).