* Judge: Grounds of appeal have "real prospect for success"
* LME taking legal advice on whether to launch an appeal
(Adds comment from Rusal in paragraphs 11-12)
By Eric Onstad and Veronica Brown
LONDON, May 15 The London Metal Exchange (LME)
has got permission to appeal against a court ruling that halted
a reform aimed at cutting backlogs at its global warehouse
The LME, the world's oldest and biggest market for
industrial metals, said on Thursday it had not yet decided
whether to actually launch an appeal to overturn the March
ruling won by Russian aluminium producer Rusal.
A successful appeal could allow the exchange to carry
through planned rules aimed at reducing months-long waiting
times for industrial companies to gain access to metal stored in
"We are pleased by the decision of the Court of Appeal to
grant us leave to appeal and to expedite the appeal," the LME
"We continue to believe that Rusal's complaint was without
merit in its entirety and are conscious of the need to find a
solution for the market as quickly as possible."
When asked whether the LME would appeal, spokeswoman Miriam
Heywood said: "We're taking legal advice as to our next step."
A judge favoured Rusal in March, blocking the LME's efforts
to change its warehouse policy because consultations had been
"unfair and unlawful".
But Lord Justice Jackson of the UK Court of Appeal said in a
ruling dated May 13: "In my view the grounds of appeal have a
real prospect of success".
He also said the original judge's ruling "places onerous
obligations on any public body conducting a consultation on
complex issues in a politically sensitive area".
Loss-making Rusal filed its court action late last year to
stop the reforms, due to have taken effect in April, because it
was worried that they would further pressure aluminium prices.
Rusal was unhappy about the prospect of a possible appeal,
but said on Thursday it was confident the original decision
would be upheld.
"The company regrets that the LME has decided to seek
permission to pursue further legal proceedings, rather than to
acknowledge and correct the specific deficiencies identified in
the judgment," the Russian group said.
The LME, owned by Hong Kong Exchanges and Clearing Ltd
, oversees warehouses 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 the 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 backlog has kept the cost high for obtaining physical
aluminium, even though the world is awash with supply. In a bid
to appease industrial consumers, the LME moved last year to
implement reforms that would cut the queues to a maximum of 50
The LME released new data this week showing that wait times
to get metal out of warehouse firms owned by trade house
Glencore and bank Goldman Sachs stretch up to
(Additional reporting by Polina Devitt in Moscow; Editing by
Jane Baird and Erica Billingham)