The Lawxy Times
High Court forces LME to face Elliott competition claim
On 17 September 2026 the High Court of England and Wales received Elliott Investment Managementโs claim that the London Metal Exchange abused its dominant position during the 2022 nickel price surge. The claim brings the application of the Competition Act 1998 to marketโinfrastructure providers into focus. The LME and all participants in baseโmetal derivatives markets now face potential injunctive relief and damages. It clarifies that failure to implement marketโintegrity safeguards may constitute an abuse of dominance.
Full News Breakdown
The dispute centres on whether the LMEโs trading rules omitted essential riskโmitigation mechanisms, allowing price distortion in the 2022 nickel crisis. Elliott argues that the omission amounts to an abuse of dominance, while the LME contends that volatility was driven by external supply shocks and that its rules complied with industry standards.
Case Name: Elliott Investment Management v. London Metal Exchange
Court: High Court of England and Wales
Date: 17 September 2026
EU Instruments / UK Legislation Cited: Competition Act 1998
Key Provisions: Partโฏ2, ChapterโฏI, Sectionโฏ2 (abuse of dominance)
Primary Legal Issue: Whether the LMEโs omission of riskโmitigation safeguards constitutes an abuse of dominance under the Competition Act 1998
Applicant/Plaintiff Arguments: The LME failed to implement adequate marketโintegrity safeguards, thereby abusing its dominant position and distorting nickel pricing
Respondent/Defendant Arguments: Price volatility was caused by external supplyโchain shocks; the LMEโs rules are consistent with industry standards and lack anticompetitive intent
Practical Outcome: Potential injunctive relief and damages against the LME, increased scrutiny of exchange governance
How Does This Affect You?
Before this filing, it was unclear whether a commodities exchange could be held liable for price spikes caused by inadequate safeguards. The courtโs acceptance of the claim clarifies that omission of marketโintegrity mechanisms can be treated as an abuse of dominance under the Act. Practically, participants must now treat exchange governance as a competitionโlaw risk, creating greater certainty about potential liability but also exposing them to heightened exposure.
For Lawyers & Advocates
Revise commodityโderivatives transaction agreements to insert indemnity clauses for exchangeโlevel safeguard failures, referencing the Actโs abuseโofโdominance provision.
Expand dueโdiligence checklists for any acquisition or financing involving metalโexchange contracts to include a review of the LMEโs governance documents, riskโmitigation policies, and any regulatory filings relating to market integrity.
Prepare evidentiary bundles that link specific LME rule gaps to client losses, drawing on internal communications that are likely to be disclosed during discovery.
Advise clients on seeking interim injunctions where an exchange has not remedied identified safeguard deficiencies, citing the courtโs willingness to entertain injunctive relief in similar competition claims.
Monitor appellate developments that may refine the โabuse of dominanceโ test for marketโinfrastructure providers, and be ready to cite this claim as persuasive authority in future disputes.
For Law Students
This case demonstrates how UK courts assess the scope of competition law when regulatory bodies are alleged to have failed in their marketโintegrity duties.
The core doctrine is the abuseโofโdominance analysis under Partโฏ2, ChapterโฏI, Sectionโฏ2 of the Act.
The decision is particularly relevant for the study of:
Competition law theory โ abuse of dominance
Marketโinfrastructure regulation
Remedies in competition proceedings
Corporate governance of exchanges
Comparative EU competition law (Articleโฏ102 TFEU)
Comparable cases are United Brands v. Commission (1978) ECJ, which introduced the โessential facilitiesโ concept, and British Telecommunications plc v. Ofcom (2002) Upper Tribunal, which examined regulatory failure as an abuse. Comparing them highlights how courts balance statutory competition provisions against sectorโspecific regulatory frameworks.
For Businesses
Commodity traders: Review internal riskโmanagement policies to ensure fallback provisions are triggered if an exchangeโs safeguards are deemed inadequate, otherwise exposure to damages may increase.
Mining firms with nickel exposure: Verify that contracts with the LME contain forceโmajeure or indemnity clauses that address exchangeโlevel failures, as omission could lead to unmitigated price risk.
Financial institutions offering metalโlinked derivatives: Update prospectuses and client disclosures to reflect the heightened focus on exchange governance, avoiding potential misโrepresentation claims.
Board of directors/CFOs of exchangeโlisted companies: Conduct a governance audit of any reliance on thirdโparty exchanges for price discovery, and consider allocating budget for independent marketโintegrity monitoring.
Key Takeaways
The High Courtโs acceptance of Elliottโs claim establishes that omission of marketโintegrity safeguards can constitute an abuse of dominance under the Act.
Practitioners must now embed indemnity and riskโmitigation clauses in commodityโderivatives agreements and expand dueโdiligence to cover exchange governance.
Regulators and courts can pursue injunctive relief and damages against exchanges that fail to implement adequate safeguards, expanding the enforcement toolkit.
Watch for the Competition Appeal Tribunalโs forthcoming guidance on the abuseโofโdominance test for marketโinfrastructure providers, expected in early 2027.
Inโhouse counsel should audit all exchangeโrelated contracts before the end of the fiscal year to ensure compliance with the new competitionโlaw exposure.
Source: Hedge Fund Sues LME For Breaches Over 2022 Nickel Crisis

