The London Metal Exchange is being sued by a US hedge fund over its cancellation of nickel trades.
The suit was filed in the High Court of Justice in England on June 1st, according to Hong Kong Exchanges and Clearing.
The cancellation of nickel contract trades on March 8 was the subject of a lawsuit by a Florida-based group founded by billionaire Paul Singer.
HKEX said that the claim would becontested vigorously and that it would be viewed as "without merit".
The exchange canceled a day's worth of nickel trades and suspended trading for 8 days in March.
It will make things worse for the exchange as it tries to restore its reputation as the world's leading venue for trading industrial metals.
The decision to suspend trading followed a 250 per cent surge in the price of nickel to a record $100,000 a tonne that was triggered by a short squeeze as banks and brokers rushed to close part of a large position amassed by the billionaire founder of China's leading STAINLESS steel producer T
The price of nickel is more than $30,000 a metric ton.
Some traders saw their profits wiped out by the decision to eliminate a day of trading because of the price surge.
People familiar with the matter said in March that AQR was exploring legal options in its dispute. The fund's founder accused the L ME of "reversing trades to save your favored cronies and robbing your non-crony customers"
HKEX did not influence the decision of L ME.
In April, the UK financial regulators launched a review into the disorderly market in nickel contracts.
The exchange struggled to rebuild its reputation after Matthew Chamberlain decided to leave for Komainu. The nickel market chaos has been reviewed.
One of the reasons it didn't react earlier to the nickel price squeeze was that it didn't know how much business was being done over-the-counter.
There is a plan for more regular reporting of these positions in the LME. Members have resisted similar moves before.
In March, the exchange said it would double the size of the fund that protects the market as a whole against a sudden collapse of one of its members.
A request for comment was not responded to byElliott.
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