UK Court of Appeal Rules Against India in UAE RAKIA Bauxite Arbitration Dispute

A brief overview indicates that the England Court of Appeal has ruled against India in a legal challenge concerning a failed bauxite project in Andhra Pradesh involving the UAE-based RAKIA, addressing questions regarding bilateral investment treaty protections and government actions.

Background of the RAKIA Dispute

The dispute traces back to a 2007 memorandum of understanding between the Andhra Pradesh government and the Ras al Khaimah government to establish an alumina refinery, aluminium smelter, and power plant. RAKIA invested approximately $42.5 million in ANRAK Aluminium Limited, a company formed to execute the project, which relied on bauxite supply from the state-owned Andhra Pradesh Mineral Development Corporation (APMDC).

However, following public opposition, the Andhra Pradesh government altered its stance in 2015, withdrawing orders that permitted bauxite supply, and APMDC eventually cancelled the supply agreement.

Arbitration and Court Proceedings

• December 2016: RAKIA initiated arbitration proceedings against India, alleging violations of the investment treaty, including failure to accord fair and equitable treatment and unlawful expropriation.
• May 2022: An arbitral tribunal ruled that it lacked jurisdiction, arguing that the government steps directly impacted ANRAK and APMDC, while RAKIA's shareholding was only indirectly affected.
• June 2025: The English High Court overturned that ruling, prompting India to file an appeal.
• Appeal Court Ruling: The UK Court of Appeal rejected India's challenge, concluding that government actions affecting the project directly applied to RAKIA's investment under the economic context of the bilateral investment treaty rather than strictly limiting protection to the formal legal documents of shareholding.

Practical Implications and Verification

This legal development highlights the complexities of international investment treaty arbitrations and how courts interpret the direct versus indirect impact of state regulatory actions on foreign investors. Stakeholders and observers can review official UK court judgments and reports from legal reporting platforms like Bar and Bench for detailed case documents and verified updates.