Investors just lost in court over last year's $12 billion nickel-trading fiasco sparked by Russia's invasion of Ukraine

• A court ruled in favor of the London Metal Exchange on Wednesday in a case over last year's nickel market turmoil.
• The court rejected investors' claim that LME overstepped its powers by canceling $12 billion in trades last March.

Investors including billionaire Paul Singer's Elliot Investment Management and Jane Street Global Trading lost a legal battle against the London Metal Exchange on Wednesday, as a UK court ruled the exchange did not overstep its power in shutting down $12 billion in nickel trades in March 2022.

A victory for Singer and other investors would have seen them collect hundreds of millions of dollars worth of damages, according to the Wall Street Journal.

The LME said Wednesday that the court affirmed its judgement to intervene during last year's fiasco when it decided to nix trades in a bid to calm markets.

A spokesperson for Elliot said the decision "raises fundamental questions for U.K. market participants…about a lack of effective checks and balances on U.K. exchanges," per the Journal. The firm intends to appeal the judgement.

The nickel-trading drama in early 2022 was unprecedented, and came as a repercussion of Russia's invasion of Ukraine that sent commodities prices on a rollercoaster ride. Prices for nickel began to climb after the conflict began in February 2022, as Russia is a key producer of the metal, which is used in steel manufacturing.

On March 8, major companies that had bet on nickel prices falling were suddenly faced with a sharp rally in the opposite direction, with billions of dollars at risk. Many firms then began buying nickel in an attempt to unwind their off-sides positions, sparking what traders call a short-squeeze. Chinese firm Tsingshan Holding found itself at the center of the action.

The LME, as a result, halted trading to curb the turmoil, and said it cancelled trades to avoid a "death spiral" of defaults.

Elliot, Jane Street, and other investors that had correctly bet on nickel prices climbing saw their gains canceled as a result of the LME's decision to stop trading. Elliot said it would have netted $456 million that morning, and Jane Street's profits were set to be about $15 million.

The court ultimately ruled that companies and traders freely opted in to LME's rules, which allow for the exchange to cancel trades.

Wednesday's ruling reinforced LME's case against several other companies who have also claimed damages from last year's events. Still, the exchange faces further investigation by UK regulators regarding the lead-up to the nickel crisis.