United Co. Rusal (486) told a court it may lose “tens of millions of pounds” under new warehousing rules from the London Metal Exchange that the company said were illegal, irrational and breached its human rights.
The LME, the world’s biggest industrial-metals marketplace, “should have investigated the alternatives properly,” Rusal’s lawyer, Monica Carss-Frisk, said at a court hearing today. “Not least an option that is less damaging,” to Rusal, she said.
The LME changed its rules to reduce waiting times for withdrawing metals from some warehouses amid complaints that delays were pushing up costs for consumers. The U.S. Commodity Futures Trading Commission is investigating practices by warehouse operators.
Oliver Winters, a Rusal spokesman, declined to comment. LME spokeswoman Miriam Heywood also declined to comment.
The LME, which licenses a network of about 700 warehouses, said in November it would require storage operators with waits exceeding more than 50 calendar days to deliver more metal than they take in. The new rules are effective April 1.
The exchange should have considered capping rent charged by warehouses for storing metal, Carss-Frisk said. Rusal wants the court to quash LME’s decision, and for the exchange to consider other options.
The rule-change breaches the Human Rights Act because “it involves a disproportionate interference with the claimant’s possessions,” Rusal said in court documents from today’s hearing.