In re: Aluminum Warehousing Antitrust Litigation, U.S. District Court, Southern District of New York, No. 13-md-02481, Judge Katherine Forrest has granted a motion to dismiss filed by the London Metal Exchange Ltd (LME) in antitrust litigation which alleged a conspiracy between the LME, owners and operators of metal storage warehouses, and metals traders, to drive up aluminium prices by restricting supply. The suit was dismissed in respect of the LME on the basis that it is an “organ” of the UK government, and thus immune from the suit under the Foreign Sovereign Immunities Act. In her opinion, the Judge states that the relevant case-law “tips decidedly” in the direction of finding the LME an organ of the U.K. Government, since the LME is required by law to perform “the decidedly public function of market regulation.”
The Judge recognised that the decision may feel surprising and counter-intuitive. There is however clear judicial authority in the UK that “when engaged in the process of regulation necessary to meet the requirements of the UK financial services legislation, the LME performs a function that can properly be said to be woven into a system of governmental control of investment business or integrated into a system of statutory regulation”, and that it is amenable to judicial review in respect of the performance of such a function (R v The London Metal Exchange Ltd, ex p Albatros Warehousing BV,  All ER (D) 452) . Furthermore, as a matter of UK law, the LME and its officers and staff benefit from an exemption from liability in damages in relation to actions and omissions in the discharge of their regulatory functions, as set out in section 291 of the Financial Services and Markets Act 2000, (save for cases involving bad faith, or breach of the Human Rights Act 1998).