The terms of the settlement, which was agreed over the weekend, were not disclosed.
"Without admission of any wrongdoing CLR has agreed to pay a contribution to Sumitomo's (legal) costs," the two companies said in a joint statement.
"Sumitomo has expressly and unreservedly withdrawn all allegations of dishonesty against CLR and its employees (past or present). The terms of the settlement are otherwise confidential."
Sumitomo was suing CLR - now part of French banking group Credit Agricole - in London's High Court for allegedly assisting, or turning a blind eye to, the activities of rogue trader Yasuo Hamanaka, who racked up losses of 2.6 billion dollars at Sumitomo where he was chief copper trader.
Both companies had faced a long, expensive and potentially embarrassing court battle.
Hamanaka was said to have controlled five percent of the global copper market at one point, earning him the nickname "Mr Five Percent".
He found himself at the centre of one of the world's biggest rogue trading scandals after running up huge losses in unauthorised deals over 10 years from 1985.
The losses were double those of infamous trader Nick Leeson, who caused the British merchant bank Barings to implode in 1995.
CLR acted as clearing broker for the copper trading of Hamanaka, who was jailed for eight years by a Japanese court in 1998 after pleading guilty to charges of fraud and forgery.