LONDON, Oct 7 (Reuters) - Hedge fund Elliott Associates

on Monday lost an appeal against the dismissal of its lawsuit

against the London Metal Exchange over billions of dollars of

cancelled nickel trades.

The LME suspended trading and annulled $12 billion in nickel

trades in March 2022 when prices shot to records above $100,000

a metric ton in a few hours of chaotic trade.

Elliott sued the LME at London's High Court and its case was

dismissed in November 2023. Elliott's bid to overturn that

decision was rejected by the Court of Appeal on Monday.

Judge Stephen Males ruled that the extreme price movement on

March 8, 2022 was "a once in a generation event" and that the

LME acted lawfully in cancelling the trades.

"To have allowed the 8th March trades to stand would have

meant a real risk of what has been graphically described as a

'death spiral' in the international metals market," he said in

his written ruling.

"The cancellation was lawful as a matter of domestic law.

Once that conclusion is reached, there is in practice no real

scope for a claim."

At a hearing in July this year, Elliott urged London's Court

of Appeal to overturn the ruling partly because the exchange

failed to disclose documents.

Lawyers for Elliott said the LME belatedly released

documents in May detailing its "Kill Switch" and "Trade Halt"

internal procedures. It also newly disclosed an internal report

that Elliott said detailed potential conflicts of interest at

the exchange.

LME lawyers said the new documents were not relevant.

A spokesperson for Elliott said it was disappointed with the

ruling.

"Elliott is further analysing the decision with its legal

team and considering its next steps."

Elliott and market maker Jane Street Global Trading brought

a case demanding a combined $472 million in compensation,

alleging at a trial in June last year that the 147-year-old

exchange had acted unlawfully.

London's High Court ruled last November that the LME had the

right to cancel the trades because of exceptional circumstances,

and was not obliged to consult market players prior to its

decision.

"Mr Chamberlain was entitled to conclude that the market had

become disorderly, and therefore to suspend trading ... (and)

the decision to cancel the trades was rational," Males said in

the ruling.