The Office of Fair Trading (OFT), Britain's competition watchdog, has been heavily criticised by an appeals tribunal for a ban it imposed on the London Metal Exchange extending trading hours.
The Competition Appeals Tribunal (CAT), a judicial body with expertise in law, economics, business and accountancy, also said the LME was entitled to costs, after the OFT used a power called an Interim Measures Directive (IMD) for the first time to prevent the exchange from extending electronic trading hours.
We have come to the conclusion that the OFT's investigative process was superficial and flawed and the IMD consequently ill founded, CAT said in a judgement posted on its website.
The OFT said it was preparing a statement commenting on the ruling.
The LME, the world's largest market for base metals, had intended to extend the opening hours of its screen platform from March 1, 2006.
I am delighted with the judgement, LME Chief Executive Simon Heale told Reuters.
We have have been awarded reasonable and proportionate costs. We are looking for a fair recompense but setting targets for that is not my main priority.
He added that the finding of the CAT applied only to the
The main case carries on some three years and two months after the initial complaint. We want to resolve the main case and this judgement gives us hope that we can persuade the OFT that the original comp1aint should be closed.
The IMD was put in place after a complaint by broker Spectron Group PLC, which operates a rival electronic trading system.
It was lifted by the OFT in mid May and the exchange extended trading hours to 0100 to 1900 London time from 0700 to 1900, from June 1.
The judgement did not assess the value of the costs but said the LME was entitled to reasonable costs for preparing the appeal notice, for attending a case conference in May and for preparing its cost application and attending a hearing. However the tribunal was concerned at the high level of the LME's legal costs.
The LME had sought to recover 250,000 pounds.