What really happened in the Trafigura–Prateek Gupta nickel scandal? A $600 million trial begins in London

The high-stakes legal fight turns on how hundreds of shipments labelled as high-grade nickel ended up filled with low-value carbon steel.

It began with a routine inspection that was supposed to confirm the contents of metal containers Trafigura had purchased. Instead, one check in November 2022 sparked a chain reaction across global metals trading. Inside containers marked as high-grade nickel, inspectors found carbon steel, metal worth only a fraction of what Trafigura had paid for.

That discovery led the Geneva-based commodities giant to book a $590 million charge, launch deeper inspections and, eventually, sue Indian businessman Prateek Gupta and his companies.

On Monday, the dispute moved into a London courtroom, and straight into the centre of one of the most dramatic fraud cases the metals world has seen in years.

Trial opens in London: Trafigura calls it 'very substantial fraud'

At London’s High Court, Trafigura’s lawyers opened with a blunt assessment: the company had been the victim of a major fraud, allegedly orchestrated by Gupta.

According to Reuters, Trafigura says Gupta masterminded a scheme in which containers shipped as nickel held cheaper materials instead, creating huge losses for the firm. The company says the scale only became clear after the first inspection triggered a wider probe.

As Trafigura’s counsel Nathan Pillow put it: “Trafigura paid for rubbish and was left with hundreds of millions of dollars of losses.”

He told the court, as cited by Reuters, that the metal the company finally ended up with was 'worth around 2 percent of what we paid for it.' Trafigura says that even after recovering roughly $10 million from some trades, losses on the disputed cargoes still exceed $500 million.

Gupta’s counter: Trafigura staff devised the structure

Gupta does not dispute that the containers did not contain nickel. But his explanation flips the allegation on its head.

He claims Trafigura staff themselves designed the trading structure, a complex web of more than 500 trades worth $3.3 billion, in which both sides allegedly traded the price differences of cargoes over time rather than the physical metal itself.

He argues that the trades were part of an agreed mechanism meant to create the appearance of increased activity on Trafigura’s books, and that the fraud allegations emerged only after the relationship soured.

Trafigura flatly denies any such arrangement existed, calling Gupta’s version “a fiction conceived after the event by admitted fraudsters.”

Who will testify

The five-week trial is expected to hear from: Prateek Gupta, who will give evidence and former senior Trafigura executives, who were involved in the disputed trading relationship

Their testimonies are likely to shape the court’s view on whether the structure was a mutually understood system or a one-sided fraud.

Trafigura is one of the world’s biggest commodities traders, and the case has already forced a re-examination of how physical cargoes are verified, insured and financed.

Nickel trading in particular has faced multiple credibility challenges in recent years, and this case, involving hundreds of containers and losses running into hundreds of millions, adds another layer of scrutiny for an already volatile market.