Albatros Warehousing was fined a total of £201,650 by an LME appeal committee on 8 June 1998. The breaches that gave rise to the appeal committee's fine took place in May and August 1997 when Albatros issued warrants in respect of two shipments of tin which did not conform to the relevant LME special contract rules.
Albatros Warehousing initiated judicial review proceedings which delayed the LME from pressing for payment of the fine. Those judicial review proceedings were dismissed by a High Court judgment dated 31 March 2000. As a result, the LME has pressed Albatros Warehousing to pay the fine, which it has failed to do.
At its meeting today the Board noted that Albatros Warehousing had failed to pay the disciplinary fine. Under the term of the warehouse contract between the LME and Albatros Warehousing, failure to pay a disciplinary fine entitles the LME to delist Albatros Warehousing. In consequence the Board resolved that:-
Albatros Warehousing be delisted with effect from close of business on Wednesday, 24 May 2000; no more metal be put on LME warrant at Albatros Warehousing with immediate effect; (Albatros Warehousing warrants be no longer good delivery against LME contracts with effect from close of business on 24 May 2000; no deliveries of Albatros warrants be accepted by the SWORD depository with effect from close of business on Friday, 19 May 2000; in the special rules governing the placing of aluminium alloy on warrant, the requirement that "aluminium alloy can only be placed on LME warrant within eight weeks of the melt date" be waived to allow warranted aluminium alloy currently at Albatros Warehousing to be re-warranted at another LME listed warehouse, subject to such reasonable terms and conditions specified by the LME warehousing department; using Albatros warrants for the settlement of Exchange Contracts through LCH clearing, in circumstances where the receiver of those warrants is unlikely to have reasonably adequate time to have that metal re-warranted at another LME listed warehouse in Rotterdam before 24 May 2000, will be an act of misconduct under regulation 10.4 of part 2 (Membership, Enforcement and Discipline) of the LME rules and regulations.
Holders of Albatros LME warrants are asked to contact the LME Warehousing Department. Those wishing to move metal to another LME listed warehouse in Rotterdam should do so in plenty of time before close of business on 24 May 2000. The LME will help co-ordinate arrangements between holders of Albatros LME warrants wishing to move LME warranted metal and the other LME listed warehouses in Rotterdam.
Members will note that the last date for placing Albatros warrants in the SWORD Depository is earlier than the date when delisting becomes effective. This is to reduce the likelihood that LME clearing members will receive Albatros warrants through LCH clearing at the last minute. The LME Compliance Department will be monitoring the movement of Albatros warrants through LCH clearing and reminding clearing members of the Board's resolution above.
