Ben Butler 

S&P hits back in court after Fortescue Metals takes legal action to prevent publication of ore price

Reporting agency says mining giant owned by Andrew ‘Twiggy’ Forrest’ wants to keep prices secret so it can charge more for its ore
  
  

Andrew Twiggy Forrest
A UK court has ordered S&P to stop publishing information about the price Andrew ‘Twiggy’ Forrest’s Fortescue Metals Group charges for iron ore. Photograph: Mike Bowers/The Guardian

Fortescue Metals Group, the mining company controlled by the billionaire Andrew “Twiggy” Forrest, has launched 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 miner of trying to keep prices secret so it can charge more for its ore.

S&P also alleged that the Fortescue lawsuit threatened to disrupt normal 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 potential 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 coronavirus testing kits for use by the Australian government.

At the centre of the globe-spanning legal storm is pricing information about Fortescue, which is the world’s fourth-biggest iron ore producer, that was published by a subsidiary of S&P, S&P Global Platts (S&P Platts), in its newsletter SBB Steel Markets Daily.

Companies selling iron ore set their prices by offering a discount relative to a benchmark, assessed by S&P Platts, and the information Fortescue claimed was confidential was the percentage discounts it was offering for ore shipped in March and April this year.

The high court of England and Wales held a hearing in S&P Platts’ absence last Thursday and the following day issued an injunction forbidding the reporting agency and another publisher, Argus Media, from publishing Fortescue’s discount rates.

But on Wednesday S&P Platts asked the district court for the southern district of New York to issue an injunction of its own forbidding Fortescue from continuing the litigation in London, as well as a declaration that any ruling against it by the British court was unenforceable in the US because of the country’s strong free speech protections.

S&P Platts also told the court the pricing information was not confidential anyway because it often appeared on Chinese social media network Weibo before S&P Platts published it.

It said that any disputes needed to be litigated in New York, rather than London, due to 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 narrow commercial interest by imposing opacity for its pricing alone in the hopes that an uneven playing field will allow it to charge higher prices,” S&P Platts said in documents filed with the court.

Fortescue’s chief executive, Elizabeth Gaines, said the company “vigorously disputes any allegation that it engages in any unlawful conduct or any other conduct that would prejudice our longstanding and valued customer relationships”.

S&P Platts told the court its publication of Fortescue’s prices was protected under the first amendment to the US constitution.

“If companies were allowed to prohibit the solicitation and publication of factual information about their businesses based on asserted violation of confidentiality obligations placed on employees and customers, it would severely disrupt time-honoured journalistic practices and impede the flow of information that is vital to the public and to the capital markets,” it 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 importance on its right to independently report market information obtained through legitimate journalistic practices, which increases transparency across commodity markets,” she said.

• This article was amended on 1 May 2020 to make it clear that the S&P subsidiary involved in the court action is its commodity price reporting agency S&P Global Platts, rather than its ratings agency S&P Global Ratings.

 

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