S&P hits back in court after Fortescue Metals takes legal action to prevent publication of iron ore price
Fortescue Metals Group, the mining company controlled by the billionaire…
Fortescue Metals Group, the mining company controlled by the billionaire Andrew “Twiggy” Forrest, has initiated legal action to stop the financial data giant S&P publishing information about the price it charges for iron ore.
A UK Court has ordered S&P to stop publishing the information, which Fortescue claims is confidential, but S&P’s commodity price reporting agency S&P Global Platts has hit back in a US court, accusing the mining company of attempting to keep iron ore prices secret so it can charge more for its ore.
S&P also alleged that the Fortescue lawsuit threatened to disrupt standard journalistic practices, such as the use of confidential sources.
The Duelling court cases have emerged in a busy week for Forrest, who has been touted as a possible buyer of the stricken airline Virgin Australia and caused a political storm by inviting a senior Chinese diplomat to a press conference where he announced he would obtain 10m Covid-19 testing kits for use by the Australian government.
At the center of the globe-spanning legal storm is pricing information about Fortescue, which is the world’s fourth-biggest iron ore producer, that was released by a subsidiary of S&P, S&P Global Platts (S&P Platts), in its newsletter SBB Steel Markets Daily.
Organizations selling iron ore set their prices by offering a discount relative to a benchmark, evaluated by S&P Platts, and the information Fortescue claimed was confidential was the percentage price reductions it was offering for ore shipped in March and April 2020.
The high court of Wales and England held a hearing in S&P Platts’ absence last Thursday, and the next day issued an injunction forbidding the reporting agency and another publisher, Argus Media, from publishing Fortescue’s discount prices.
But on Wednesday S&P Platts told the district court for the southern district of New York to issue an injunction of its own forbidding Fortescue from continuing the lawsuit in London, in addition to a declaration that any ruling against it from the British court was unenforceable in the US due to the country’s strong free speech protections.
S&P Platts also told the court the pricing information was not confidential before S&P Platts published it since it appeared on Chinese social media network Weibo.
It said that any disputes should be resolved in the court in New York, rather than London, because of a clause in the contract under which Fortescue subscribes to S&P Platts’ publications.
S&P Platts claimed that by publishing price information obtained from buyers, it was helping to promote an efficient market.
“FMG, In contrast, seeks to protect only its own commercial interest by imposing opacity for its pricing independently in the hopes that an uneven playing field will allow it to charge higher prices.”
According to the document S&P Platts filed with the court,
Fortescue’s Chief executive, Elizabeth Gaines, stated that the company “vigorously disputes any allegation that it engages in any unlawful conduct or any other conduct that would negatively influence our longstanding and valued customer relationships.”
“If organizations were allowed to prohibit the solicitation and publication of factual information regarding their businesses based on an asserted violation of confidentiality obligations placed on employees and clients, it would severely disrupt time-honored journalistic practices and hinder the flow of information that’s essential to the public and the capital markets,” S&P Platts’ told the court.
It accused Fortescue of causing “irreparable harm” by preventing it from publishing the information and said that if the UK judgment was allowed to stand, it would “cripple” S&P’s business.
An S&P spokeswoman said the company did not comment on ongoing litigation. “However S&P Global Platts, like other price reporting agencies, places significance on its right to Independently report market information obtained through legitimate Journalistic techniques, which increases transparency across commodity markets,” She explained.
