SINGAPORE The London Metal Exchange will proceed with its proposed warehousing policy changes, aimed at cutting queues for metals, despite aluminum producer United Co. Rusals (UC Rusals) challenge to the plan.
The LME has been named as a defendant in a judicial review claim issued by Moscow-based UC Rusal and filed Dec. 23 in the English High Court, LME owner Hong Kong Exchanges & Clearing Ltd. (HKEx) said Dec. 24.
The judicial review seeks to challenge the LMEs decision to shorten the limit on the length of queues it will permit at individual warehouse locations to 50 days from a 100-day limit proposed in July (amm.com, Nov. 7).
The LME plans to implement the proposal April 1.
"Rusal has alleged that the consultation conducted by the LME was unfair and procedurally flawed, that the LMEs changes to its warehousing policy are irrational and disproportionate, and that Rusals human rights have thereby been breached," HKEx said. "LME management considers that the grounds of Rusals complaint are without merit and will defend any judicial review proceedings vigorously."
The LMEs decision was made after a three-month market consultation commenced in July regarding changes to its policy on the load-out rates of LME-approved warehouses, the bourse said.
In a separate statement, HKEx said it has transferred its regulatory powers and responsibilities over UC Rusal to Hong Kongs Securities and Futures Commission as a consequence of the judicial review proceedings against the LME.
A version of this article was first published in AMM sister publication Metal Bulletin.