HKEx Legal Proceedings Involving A Subsidiary
As disclosed on 24 December 2013, the LME, an indirect wholly-owned subsidiary of HKEx, was named as a defendant in a judicial review claim commenced by Rusal and filed in the High Court on 23 December 2013. The judicial review sought to challenge the Decision. The Decision was made following a three-month market consultation commenced by the LME in July 2013.
The hearing of the judicial review claim took place on 26 and 27 February 2014, and judgment was handed down on 27 March 2014. As disclosed on 27 March 2014, the High Court found in favour of Rusal on one specific procedural issue. The High Court therefore quashed the LME’s consultation on the proposed rule changes and its decision to introduce the linked load-in load-out rule change.
The LME applied for, and was granted, permission to appeal the judgment to the Court of Appeal. The hearing of the appeal took place on 29 and 30 July 2014. On 8 October 2014, the Court of Appeal allowed the LME’s appeal against the High Court Judgment and the resulting Quashing Order. The Court of Appeal unanimously found in favour of the LME on all grounds. The Court of Appeal has denied Rusal leave to appeal to the Supreme Court and has also denied Rusal’s request to stay the Court of Appeal’s setting aside of the Quashing Order. Rusal has indicated that it will seek permission to appeal to the Supreme Court directly from the Supreme Court. The deadline for Rusal to submit its application is 5 November 2014. The LME believes that any application by Rusal for permission to appeal to the Supreme Court would be without merit and the LME will contest any such application vigorously.
The LME is pleased to have won the judicial review on appeal. The LME believed from the start that Rusal’s complaint was without merit, and is glad that the Court of Appeal has recognised this. As the world’s leading base metals exchange, the LME has a duty to ensure the integrity of its reference prices and the operation of a fair and liquid market for all industry participants. To this end, the implementation of the proposed changes to the warehousing policy will take place as planned. A notice will be distributed with details of the schedule for implementation of the proposed linked load-in load-out rule in due course.