UK Court of Appeal allows RAKIA to pursue arbitration against India

The UK Court of Appeal has dismissed an appeal by the Indian government regarding a dispute with the Ras Al Khaimah Investment Authority (RAKIA). The ruling upholds a previous High Court decision that an arbitral tribunal has the jurisdiction to hear RAKIA’s claims under the India-UAE Bilateral Investment Treaty (BIT).

The dispute stems from a 2007 memorandum of understanding between the governments of Andhra Pradesh and Ras Al Khaimah to establish an alumina refinery, aluminium smelter, and power plant. RAKIA invested approximately $42.5 million in ANRAK Aluminium Limited to implement the project. However, following public protests, the Andhra Pradesh government reversed its position in 2015 and issued orders that effectively cancelled the bauxite supply arrangement essential to the project.

India had challenged the tribunal's jurisdiction, arguing that RAKIA’s diluted minority shareholding did not constitute a direct investment under the treaty. The Court of Appeal rejected this, noting that government actions affecting the availability of resources and terminating supply contracts directly impact the investor's investment. RAKIA initiated arbitration under UNCITRAL rules in December 2016.