MOSCOW (Reuters) – The Moscow Arbitration Court on Friday dismissed a lawsuit against private investors against the Moscow Exchange, who were demanding compensation for losses due to the April situation with the suspension of trading in Light Sweet Crude Oil futures corresponding to WTI contracts, Russian agencies reported.
“The Moscow Arbitration Court decided to refuse to satisfy the claims. The decision can be challenged within a month in the Ninth Arbitration Court of Appeal,” the judge quotes Interfax.
The Moscow Exchange did not comment on the court's decision.
“We certainly plan to appeal this decision to higher authorities. And if Russian legislation is unable to protect the interests of our clients, then we will seek a fair decision at the ECHR (European Court of Human Rights),” said Milton Legal.
Milton Legal was preparing a class action lawsuit against the stock exchange in connection with the losses of private investors on the April futures for Light Sweet Crude Oil, which collapsed following the WTI delivery contracts in the US market, which went into negative values.
The Moscow Exchange prematurely suspended trading in futures with the execution date of April 21, recognizing that the broker and clearing systems of the site do not know how to work with negative prices, and their appearance could lead to problems throughout the market.
The Central Bank said that it saw no violations in the actions of the exchange in connection with the suspension of trading and advised investors to go to court with claims.
This lawsuit was the first to be filed with the exchange over the April situation with oil futures. The class action lawsuit for 51 million rubles is still pending at the Moscow Arbitration Court.
On Friday, a meeting was held on a claim from five individuals to the Moscow Exchange, filed on June 18. The amount of claims was 288.2 thousand rubles.
“At the meeting on Friday, 11 more investors joined as co-plaintiffs. Thus, the number of plaintiffs increased to 16 people. … claims increased by about 40 million rubles,” Interfax reported.
According to the plaintiffs, the fault of the exchange was, in particular, its technical unpreparedness for trading in assets with negative prices, and as a result, the trading participants were completely deprived of the opportunity to influence the transaction, for example, to close a position. A representative of the exchange said in court that its actions, on the contrary, helped to minimize the number of affected customers, RIA Novosti reports.
The Moscow Exchange, after facing legal claims from private investors, changed the trading and clearing system and can now broadcast prices with a minus sign for a number of instruments.
On July 6, 2020, the Moscow Exchange launched a new version of the derivatives market trading and clearing system with support for negative prices.
(Elena Fabrichnaya, Alexander Murrow. Editor Gleb Stolyarov)