The rapid price movement squeezed dozens of short-sellers, including the world’s largest stainless steel producer, Tsingshan Holding Group of China.

The 146-year-old bourse suspended trading and cancelled billions of dollars of transactions in the early-morning hours of March 8, 2022, in a move that has sparked a series of legal actions and an enforcement inquiry by British regulators over the LME’s response.

“The actions taken by the LME on March 8, 2022 averted significant and systemic damage to the nickel market as well as other metals markets and derivatives markets more widely,” a LME spokesperson said.

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“In more than a year since the LME took action, no other viable alternative response has been suggested or identified by the claimants that was not considered and rationally rejected by the LME at the time. In pressing and extraordinary circumstances, the LME at all times acted in accordance with its rules and regulatory obligations and in the interests of the market as a whole.”

As part of her arguments on Tuesday, Carss-Frisk said the price of nickel had already fallen from its highest levels on March 8, 2022, when the bourse ultimately decided to cancel trades.

In a court filing, the LME’s lawyers argued that Elliott and Jane Street have failed to identify any “sufficient basis” for the court to set aside the bourse’s decision-making and said the case raises “serious questions” about the viability of regulated exchanges.

“Exchanges are legally required to maintain market order and to have the power to cancel trading activity in response to exceptional market events. It is almost inevitable that any exercise of those powers will be controversial and will have serious financial consequences for those affected,” the bourse’s lawyers said in a court filing.

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“It is also likely that the powers will be exercised (as they were here) in urgent circumstances, in response to unfolding events,” they added.

At the same time, Elliott and Jane Street argued that the LME unexpectedly suspended its “price bands” for nickel on the morning of March 8, 2022, which allowed the price of nickel to rise quicker.

In a court filing, the LME said the bands exist as a control mechanism for “fat finger” errors or rogue algorithmic trading, but the rapid price rises on March 8, 2022, made the bands ineffective. They were ultimately suspended after several attempts to adjust them to keep pace with the rapid price increases.

The bourse also admitted that LME CEO Matthew Chamberlain was unaware the bands had been suspended that morning, but said that was not a relevant factor in his decision-making to suspend trading that day.

“The market disorder would have occurred, and would have been clearly apparent to Mr. Chamberlain, even had the price bands remained in place,” the LME’s lawyers said.