The International Dispute Resolution Centre for Arbitration and Mediation (IDRC) in London dismissed a claim filed by Ras Al-Khaimah Investment Authority (RAKIA) against the Indian Government for damages amounting to $273 million payable by the Government of Andhra Pradesh (GoAP) consequent upon its failure to supply bauxite from Jerrela deposits located in the Eastern Ghats in Visakhapatnam district as per the Bauxite Supply Agreement (BSA) of October 2008.
With this, the GoAP scored a major victory in the IDRC as it would have otherwise had to pay the amount to the Government of India (GoI). India is a party to the dispute by virtue of signing a Bilateral Investment Treaty (BIT) with the United Arab Emirates (UAE) for the construction of an alumina refinery by Anrak Aluminium Limited (ANRAK) incorporated by RAKIA.
RAKIA’s allegation
The allegation by RAKIA was that the failure to supply bauxite and the cancellation of the BSA entered by A. P. Mineral Development Corporation (APMDC) with ANRAK, constituted a breach of the BIT.
The GoI denied any such breaches and maintained that the IDRC’s arbitral tribunal lacked jurisdiction because the provisions of the BIT for arbitration at the instance of the investor (RAKIA) do not apply to this case.
The crux of the issue was a notice served by APMDC in November 2016 for cancellation of the BSA allegedly for breaches on the part of ANRAK.
IDRC cites lack of jurisdiction
After prolonged efforts to find a solution through mediation failed to yield any result, the IDRC tribunal—presided by Lord Hoffman and comprising arbitrators J. William Rowley and Justice Chandramauli Kumar Prasad—dismissed RAKIA’s appeal for damages, saying it lacked jurisdiction under the BIT to entertain its claim.
Counsels Sam Wordsworth and Siddharth Dhar appeared for India and they were briefed about the facts by Dentons UK and Middle East LLP and C. Sumon, special government pleader in the office of Advocate General of Andhra Pradesh.
