UK Court Of Appeal Allows UAE Investor To Arbitrate Claims Against India Over Andhra Pradesh Bauxite Project

The Court of Appeal of England and Wales has dismissed India's appeal against a ruling allowing Ras Al Khaimah Investment Authority (RAKIA) to pursue arbitration over the cancellation of a bauxite supply agreement for an alumina refinery project in Andhra Pradesh.

The three-judge bench held that the Andhra Pradesh government's actions applied directly to RAKIA's investment in ANRAK Aluminium Limited, despite RAKIA holding only about 12% of the company's shares.

“I therefore agree with the Judge that the actions of the GoAP in the present case applied directly to RAKIA's Investment. That Investment was in a company formed to establish an alumina and aluminium industry in Andhra Pradesh, exploiting local deposits of bauxite,” Lord Justice Phillips observed.

Lord Justices Males, Phillips and Miles dismissed India's appeal against a June 2025 ruling by Justice Robin Knowles of the Commercial Court. The judge had set aside an arbitral tribunal's decision declining jurisdiction and remitted the dispute to the tribunal to decide the claims on their merits.

However, Lord Justices Males and Miles reserved their views on whether the pledge of RAKIA's shares in ANRAK itself qualified as an investment to which the cancellation of the bauxite supply agreement applied directly. They considered it unnecessary to decide this question.

The dispute stems from a February 14, 2007 memorandum of understanding between the Andhra Pradesh government and the government of Ras Al Khaimah to establish an alumina refinery, an aluminium smelter and a power plant in the state. The project was expected to cost US$2 billion.

RAKIA initially invested US$30.8 million for a 30% stake in ANRAK. It increased its investment to US$42.5 million in 2009, but its shareholding eventually fell to around 12% because it did not match further equity investments by the other shareholder.

The project depended on bauxite supplies from the state-owned Andhra Pradesh Mineral Development Corporation (APMDC), which entered into a supply agreement with ANRAK on October 30, 2008. The agreement was subject to the necessary clearances and consents.

Following public protests, the Andhra Pradesh chief minister announced on December 22, 2015, that the agreement would be cancelled. On April 6, 2016, the state government issued an order purporting to nullify earlier orders authorising APMDC to enter into the agreement. APMDC later issued a cancellation notice on November 21, 2016, alleging that ANRAK had breached the agreement.

RAKIA initiated arbitration on December 8, 2016, alleging that India's actions violated Articles 4, 5 and 7 of the India-UAE Bilateral Investment Treaty. Its claims concerned investment protection, fair and equitable treatment, and expropriation.

A London-seated arbitral tribunal declined jurisdiction on May 11, 2022. It held that the government's actions applied directly to ANRAK and APMDC but affected RAKIA's shareholding only indirectly, even though the actions were assumed to have reduced the value of its shares.

RAKIA challenged the decision before the Commercial Court. In June 2025, Justice Knowles set aside the tribunal's ruling and remitted the dispute for a decision on the merits. India then appealed, arguing that the judge had wrongly identified RAKIA's investment and concluded that the government's actions applied directly to it.

India maintained that RAKIA's investment was its shareholding, not ANRAK's business, assets or the underlying project. It argued that government action affecting the company's assets could not automatically be treated as action applied directly to RAKIA's shares.

India also relied on its review of bilateral investment treaties following the 2011 arbitral award in White Industries v. India. It argued that the background to the India-UAE treaty negotiations supported a narrower interpretation of the protections available to investors.

Rejecting India's argument, Lord Justice Phillips held that RAKIA's capital investment did not lose its character as an investment when it took the form of shares in ANRAK. The treaty expressly provided that a change in the form of invested assets did not affect their character as an investment.

The question was whether the government's actions applied directly to RAKIA's investment, represented by its shares in a company formed to establish an alumina and aluminium industry in Andhra Pradesh.

The court did not, however, accept that RAKIA owned or controlled ANRAK or its underlying assets.

“In no sense can RAKIA be described as the owner or controller of ANRAK or the owner (indirectly) of any of its assets, and the BIT cannot be interpreted so as to include ANRAK's assets as those invested by RAKIA,” Lord Justice Phillips held.

The court nevertheless found that the government's actions could apply directly to RAKIA's investment, even though ANRAK's assets did not themselves form part of that investment. Explaining the problem with India's interpretation, Lord Justice Phillips observed:

“Yet India's proposed interpretation would be that the action was applied directly to the assets of the company, with only an indirect effect on the Investment, viewed simply as the shares.”

The court also rejected India's reliance on agreed minutes from the treaty negotiations. Lord Justice Phillips held that the material did not clearly establish a definite intention to restrict the treaty's protections in the way India proposed.

Lord Justice Phillips agreed with India on one aspect of the Commercial Court's reasoning. He found that the distinction drawn by the lower court between broadly applicable government measures and actions specifically targeting an investment did not work.

“There is force in India's argument that a distinction between 'wider executive action' and 'targeted' action does not work; an industry-wide regulation would 'apply directly' to a company, being 'targeted' at all such companies. I also accept the submission that such a distinction would be difficult to reconcile with other provisions in the BIT,” he observed.

The relevant distinction, he explained, was between executive action applied directly to an investment and the indirect or consequential effects of action directed elsewhere. He acknowledged that the distinction might not always be clear-cut.

India also argued in its written submissions that the government had not permanently ended the project, pointing out that the refinery was permitted to operate using alternative bauxite supplies from 2017. India did not pursue this argument further during oral submissions.

Lord Justice Phillips held that this did not change the outcome. At the jurisdiction stage, RAKIA had to establish that the government's actions applied directly to its investment and damaged the value of its shares. It did not have to show that the actions had permanently brought the industry to an end.

Lord Justices Males and Miles agreed that India's appeal should be dismissed but reserved their views on whether the pledge of RAKIA's ANRAK shares was itself an investment to which the cancellation of the bauxite supply agreement applied directly. They considered it unnecessary to decide that question.

The ruling allows RAKIA's claims to proceed before the arbitral tribunal. It does not decide whether India breached the treaty or whether RAKIA is entitled to compensation.

For Appellant (Republic of India): Advocates Sam Wordsworth KC, Siddharth Dhar KC and Peter Webster.

For Respondent (Ras Al Khaimah Investment Authority): Advocates Tim Otty KC, Ben Juratowitch KC and Benedict Tompkins.