UPDATE 1-UK court awards Noble $38 mln in aluminium case

LONDON, June 26 (Reuters) - A British court awarded Hong Kong based commodities trading firm Noble Group (NOBG.SI) $38 million in damages against an employee after losses arising from large speculative positions in aluminium futures. In a ruling published on Friday, Philip Gross was found to have participated in the build up of large speculative positions in the aluminium market, that exceeded authorised limits, and concealing them from Noble's management. The judge in charge of the case, Mrs. Justice Gloster, said Gross was liable in damages for "breach of his employment contract, for deceit and for conspiracy to defraud". "I assess the quantum of Noble's damages claim at $38,071,400," she said. "In the circumstances (Noble) were entitled to dismiss Mr. Gross and, accordingly, his counterclaim stands dismissed." Noble claimed that Philip Gross was engaged in unauthorised speculative trading of aluminium futures between February 2004 and early 2006, the ruling said. However, the claim was narrowed to only three instances of speculative trading claimed by Noble. The damages awarded to Noble included $37,071,400 lost on the speculative positions and $1 million bonus payments made to Gross and another person. "Noble alleged that Mr. Gross and (another person) agreed that (the latter) would cause false transactions to be entered in the physical trading book ... in Lausanne (Switzerland)," the ruling said. Gross denied he had been involved in any unauthorised trading. He also denied having any knowledge that exposures in the aluminium futures market had been concealed. Calls by Reuters to lawyers for Noble Group and Philip Gross have as yet not been returned. The speculative positions that were the subject of the ruling were: * A short -- bets on falling prices -- speculative position of about 11,375 tonnes of aluminium, which Noble contends built up an unrealised loss of $1 million at the end of December. * A long -- bets on rising prices -- speculative position of about 34,075 tonnes established by about the end of June 2005, which, again, Noble contends had built up a substantial unrealised loss. * A short speculative position of about 52,425 tonnes built up in July 2005 and maintained thereafter; Noble contends that, for most of the period between July 2005 and January 2006, this position created a substantial unrealised loss.