On 17 September 2026 the High Court of England and Wales received Elliott Investment Management’s 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 market‑infrastructure providers into focus. The LME and all participants in base‑metal derivatives markets now face potential injunctive relief and damages. It clarifies that failure to implement market‑integrity safeguards may constitute an abuse of dominance.

Full News Breakdown

The dispute centres on whether the LME’s trading rules omitted essential risk‑mitigation 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: Part 2, Chapter I, Section 2 (abuse of dominance)

• Primary Legal Issue: Whether the LME’s omission of risk‑mitigation safeguards constitutes an abuse of dominance under the Competition Act 1998

• Applicant/Plaintiff Arguments: The LME failed to implement adequate market‑integrity safeguards, thereby abusing its dominant position and distorting nickel pricing

• Respondent/Defendant Arguments: Price volatility was caused by external supply‑chain shocks; the LME’s 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 court’s acceptance of the claim clarifies that omission of market‑integrity mechanisms can be treated as an abuse of dominance under the Act. Practically, participants must now treat exchange governance as a competition‑law risk, creating greater certainty about potential liability but also exposing them to heightened exposure.

For Lawyers & Advocates

• Revise commodity‑derivatives transaction agreements to insert indemnity clauses for exchange‑level safeguard failures, referencing the Act’s abuse‑of‑dominance provision.

• Expand due‑diligence checklists for any acquisition or financing involving metal‑exchange contracts to include a review of the LME’s governance documents, risk‑mitigation 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 court’s willingness to entertain injunctive relief in similar competition claims.

• Monitor appellate developments that may refine the “abuse of dominance” test for market‑infrastructure 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 market‑integrity duties.
The core doctrine is the abuse‑of‑dominance analysis under Part 2, Chapter I, Section 2 of the Act.
The decision is particularly relevant for the study of:

• Competition law theory – abuse of dominance

• Market‑infrastructure regulation

• Remedies in competition proceedings

• Corporate governance of exchanges

• Comparative EU competition law (Article 102 TFEU)

Comparable cases are United Brands v. Commission (1978) ECJ, which introduced the “essential facilities” 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 sector‑specific regulatory frameworks.

For Businesses

• Commodity traders: Review internal risk‑management policies to ensure fallback provisions are triggered if an exchange’s safeguards are deemed inadequate, otherwise exposure to damages may increase.

• Mining firms with nickel exposure: Verify that contracts with the LME contain force‑majeure or indemnity clauses that address exchange‑level failures, as omission could lead to unmitigated price risk.

• Financial institutions offering metal‑linked derivatives: Update prospectuses and client disclosures to reflect the heightened focus on exchange governance, avoiding potential mis‑representation claims.

• Board of directors/CFOs of exchange‑listed companies: Conduct a governance audit of any reliance on third‑party exchanges for price discovery, and consider allocating budget for independent market‑integrity monitoring.

Key Takeaways

• The High Court’s acceptance of Elliott’s claim establishes that omission of market‑integrity safeguards can constitute an abuse of dominance under the Act.

• Practitioners must now embed indemnity and risk‑mitigation clauses in commodity‑derivatives agreements and expand due‑diligence 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 Tribunal’s forthcoming guidance on the abuse‑of‑dominance test for market‑infrastructure providers, expected in early 2027.

• In‑house counsel should audit all exchange‑related contracts before the end of the fiscal year to ensure compliance with the new competition‑law exposure.

Source: Hedge Fund Sues LME For Breaches Over 2022 Nickel Crisis