Summary

1. This appeal concerned the scope of the investor-state arbitration provisions in a bilateral investment treaty between the respective Governments of the appellant, the Republic of India ("India"), and of the United Arab Emirates ("UAE") signed on 12 December 2013 ("the BIT").

2. By Article 10.2 of the BIT the arbitration provisions were stated, in the context of investments in India, to "cover Measures underlying a dispute taken by the Central Government and/or the state governments while exercising their executive powers...". "Measure" was defined in Article 1.8 as "any form of binding action taken by a Contracting Party under any law, rule or regulation and applied directly to an Investment".

3. In Article 1.1 of the BIT "Investment" was defined as "every kind of asset invested by the Investors of one Contracting Party in the territory of the other Contracting Party...", including "shares, stocks, bonds, debentures and any other similar forms of participation in a company...". The definition added that "[a]ny change of the form in which assets are invested or reinvested does not affect their character as Investment".

4. On 8 December 2016 the respondent ("RAKIA"), the investment arm of the Government of Ras Al Khaimah1, issued a notice of arbitration under UNCITRAL rules claiming that India had breached the terms of the BIT in relation to an investment of RAKIA in the setting up and operation of an alumina and aluminium industry in the state of Andhra Pradesh. RAKIA's capital investment of US$42.5million was at that time held in the form of a 12% shareholding in an Indian company named ANRAK Aluminium Limited ("ANRAK"). ANRAK had built and was to operate an alumina refinery, supplied with bauxite to be mined in Andhra Pradesh by a state-owned company, Andhra Pradesh Mineral Development Corporation ("APMDC"). RAKIA claimed that executive actions and orders of the Government of Andhra Pradesh ("the GoAP"), which resulted in the cancellation of the bauxite supply contract between APMDC and ANRAK ("the BSA") and the consequent unemployment of ANRAK's refinery, breached the terms of the BIT as to the protection and fair and equitable treatment of Investments and the prohibition of expropriation of Investments.

5. By a final award in the arbitration dated 11 May 2022 ("the Award"), a London-seated arbitral tribunal comprising Lord Hoffmann (Chair), Justice Chandramauli and J. William Rowley QC ("the Tribunal") determined that RAKIA's claim did not fall within the scope of Article 10 and that therefore the Tribunal had no substantive jurisdiction to determine it2. The Tribunal assumed, for the purposes of the Award, that the claim related to binding governmental executive acts and that those acts caused loss to ANRAK and therefore diminished the value of RAKIA's minority shareholding in ANRAK, but held that the acts in question had only an indirect effect on that investment, being directly applied only to ANRAK and APMDC.

6. RAKIA challenged the Tribunal's decision on substantive jurisdiction under section 67 of the Arbitration Act 1996. In a reserved judgment dated 20 June 2025 Robin Knowles J ("the Judge") determined that the GoAP had taken binding executive actions which had applied directly to RAKIA's Investment in India as they were "targeted at" that Investment. Those actions were therefore Measures within Article 10.2 of the BIT. The Judge accordingly determined that the Tribunal did have substantive jurisdiction in relation to RAKIA's claim, set aside the Award and remitted the dispute to the Tribunal to determine it on its merits.

7. India appealed that decision, with the permission of the Judge, on two grounds. Ground 1 was that the Judge erred in regarding RAKIA's Investment as being in the alumina and aluminium industry in Andhra Pradesh rather than simply being RAKIA's 12% shareholding in ANRAK. Ground 2 was that the Judge was wrong to find that the governmental actions in question applied directly to RAKIA's Investment, and accordingly that he erred in holding that such actions were Measures within Article 10.2.

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