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In the recent case of Ras Al Khaimah Investment Authority (RAKIA) v Republic of India [2025] EWHC 1553 (Comm), the English Commercial Court reversed an UNCITRAL arbitral tribunal’s decision that it lacked jurisdiction under the India-UAE BIT. The court’s judgment, at the intersection of treaty interpretation and arbitral jurisdiction recognises the structuring of cross-border investments, including those through local subsidiaries/shareholdings, as falling within the scope of the BIT’s protection.
Background: From promising JV to treaty dispute
In 2007, the governments of the Indian state of Andhra Pradesh and the UAE Emirate of Ras Al Khaimah agreed to jointly develop an alumina and aluminium project in Andhra Pradesh. A JV company, ANRAK Aluminium Ltd (“ANRAK”) was incorporated in India, to build and operate the facility, with its shareholders being Ras Al Khaimah’s sovereign wealth fund, RAKIA, and another Indian company. Andhra Pradesh, through its mining undertaking, APMDC Ltd (“APMDC”), entered into a bauxite supply agreement (“BSA”) with ANRAK whereby APMDC agreed to supply the project’s bauxite requirements.
While the project progressed initially – including completion of the refinery in 2013 and environmental clearances being granted in August 2015 – in April 2016 there was a political reversal whereby Andhra Pradesh cancelled the authorisation for APMDC to enter into the BSA. This led to APMDC terminating the BSA in November 2016. RAKIA then commenced a US$273 million arbitration, alleging that India’s acts breached the India-UAE bilateral investment treaty (“BIT”).
A jurisdictional roadblock: the tribunal’s finding on jurisdiction
The BIT’s investor state dispute resolution clause (Article 10) allowed arbitration only for disputes relating to a “Measure” which in turn was defined as being any binding government action “applied directly to an Investment”. The Tribunal held that the challenged government measures (such as the cancellation of the authorisation of the BSA) had an “indirect effect” on RAKIA’s investment but were “directly applied” only to APMDC and ANRAK (which were the parties to the BSA). Therefore, the Tribunal concluded it lacked jurisdiction over RAKIA’s claim.
RAKIA challenged this before the English High Court, invoking section 67 of the Arbitration Act 1996, which permits parties to challenge tribunals’ awards on jurisdiction in English-seated arbitrations.
The English Court’s decision
The Court set aside the tribunal’s restrictive approach. Knowles J confirmed that he was required to interpret the jurisdictional provisions in the BIT, using an even-handed approach, “neither liberally (i.e. pro-investor) nor restrictively (i.e. pro-State)". The judgment considered the Tribunal’s analysis as reflecting the concept of separate corporate personality (i.e. claims of the company being distinct from those of a shareholder) but reasoned that the lens is different in a BIT context and the practical effect of the tribunal’s analysis “would mean that a major form of investment structure fell outside the compass of the BIT without apparent reason for that choice.”
The judge therefore held that government measures that target a protected investment should not escape review just because the impact flows through a local subsidiary. On the facts, RAKIA’s shareholding in and pledges for ANRAK, which constituted “Investment” under the BIT, were directly threatened by India’s regulatory measures, even if the measures were technically imposed on ANRAK. The Court concluded this was a direct effect: this was not a case where the action was taken elsewhere but had adverse collateral effects on RAKIA’s investment.
Key takeaways
The undercurrent of the court’s judgment seems to be that, unless explicitly stated otherwise in the treaty text, interpretation of BITs should account for the structuring of modern foreign investment, where it is common for investors to hold assets via local subsidiaries/shareholdings. Other than evidencing a pragmatic approach to investment treaty interpretation, the decision is important in helping to clarify the scope of investor protection under the India-UAE BIT as well as other investment treaties with similar phrasing.
Click here for a copy of the judgment.
23 July 2025
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