UPDATE 1-Rusal legal win makes London Metal Exchange halt warehouse reform

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LONDON, March 27 (Reuters) - The London Metal Exchange (LME) will not implement reforms to cut logjams in its global warehousing network as scheduled next month after it lost crucial elements of a legal case brought by Russian aluminium giant Rusal.

"The LME is disappointed with the outcome of the judicial review," the exchange said in a statement on Thursday. "The implementation of the rule will not take place on 1 April 2014."

The LME, the world's biggest marketplace for base metals, had planned to implement reforms designed to cut long queues to access metal from warehouses, but Rusal argued the measures would damage prices of its products.

United Company Rusal, the world's largest producer of aluminium, sought court permission last month for the review on grounds including human rights.

"We welcome this decision by the High Court and look forward to working closely with the LME, and indeed all key stakeholders," said Rusal's Chief Executive Oleg Deripaska.

A new consultation should "serve to increase the integrity of price discovery and transparency across the market", he added.

The LME, owned by Hong Kong Exchanges and Clearing , said it was taking legal advice on its options, including launching an appeal or a re-consultation on its reforms.

In court last month, the LME voiced "serious concerns" over its ability to maintain an orderly base metal market if forced to repeat the consultation.

The LME oversees warehouses around the world where companies that buy metals such as aluminium or copper on its futures market can take delivery of quality-assured supplies if needed.

Big banks and traders that own warehouses and charge rent have profited from letting long queues build up for buyers to withdraw metal. Some also keep huge stocks of aluminium tied up, unavailable to manufacturers, in long-term financing deals.

The new regulations aimed to cut queues and raise loading-out rates at warehouses with logjams while fending off criticism from end-users such as Novelis, which supplies material for Coca Cola's cans, about inflated prices and distorted supplies.

(Additional reporting by Polina Devitt in Moscow; Editing by Anthony Barker)