* Repeat of consultation would be detrimental to market - lawyers
* LME 'could suffer reputational damage' if reforms don't go ahead
* LME consulted 'widely and intensively'
By Alexander Winning
LONDON, Feb 27 (Reuters) - The London Metal Exchange voiced "serious concerns" over its ability to maintain an orderly base-metal market if forced to repeat a consultation to reform its global warehouse network, as Russian aluminium giant Rusal seeks a judicial review.
United Company Rusal, the world's largest producer of the metal, is seeking court permission for a judicial review in hopes of quashing the LME moves it says may undermine the price at which the company sells its products.
Rusal argues that the LME actions will harm its economic interests and that there were flaws in the consultation and inquiry process adopted by the exchange.
"The LME has serious concerns regarding the consequences for the market if it is required to re-consult," British lawyer Michael Beloff, QC, said on Thursday in the LME's skeleton argument.
"Delay to the implementation of the proposal would prevent the LME from taking action necessary to maintain an orderly market and would be detrimental to the market as a whole."
The hearing marks the first legal hurdle confronting the LME over the reforms, which are due to take effect in April.
The LME, owned by Hong Kong Exchanges and Clearing , oversees warehouses around the world where companies that buy metals such as aluminium or copper on its futures market can take delivery of quality-assured supplies if needed.
Big banks and traders that own warehouses and charge rent have profited from letting long queues build up for buyers to withdraw metal. Some also keep huge stocks of aluminium tied up, unavailable to manufacturers, in long-term financing deals.
The exchange is also facing lawsuits filed by U.S. manufacturers because of the delays.
The new regulations aim to cut queues and raise loading-out rates at warehouses with log-jams while fending off criticism from end-users such as Novelis, which supplies metal to Coca Cola, about inflated prices and distorted supplies.
Producers, squeezed by high energy prices and facing a flood of Chinese capacity, say the changes could remove underpinning from aluminum prices depressed by a global glut of metal that over years has built up record-high stockpiles.
Beloff also said the LME was likely to suffer serious reputational damage if it did not take necessary action at a time when it is facing significant competition.
He denied that the LME's consultation was defective. Rusal had two face-to-face meetings with the LME during the consultation and had submitted written reaction to the proposal, he said.
"The consultations were both wide-ranging and intensive," Beloff told the court. (Additional reporting by Susan Thomas; Editing by Veronica Brown and Dale Hudson)