The High Court of England and Wales set aside an investment treaty tribunal’s decision reinforcing the English courts’ supervisory jurisdiction over arbitral awards under Section 67 of the Arbitration Act 1996. The dispute arose from Ras Al Khaimah Investment Authority’s (RAKIA) investment in a $2 billion bauxite mining and aluminium project in Andhra Pradesh, India, which was derailed by the cancellation of mining leases through a state government order (GOM 44).
An UNCITRAL tribunal, chaired by Lord Hoffmann, had dismissed RAKIA’s claim, holding that the cancellation affected only the Indian joint venture company (ANRAK Aluminium Ltd) and not RAKIA’s investment directly, thereby lacking jurisdiction under Article 10 of the India-UAE Bilateral Investment Treaty (BIT). The Court disagreed, emphasizing that BIT protections extend to all qualifying investments including shares and capital contributions and that a state measure targeting the project itself can amount to “direct application” under the BIT.
The Court held that the tribunal’s interpretation was unduly formalistic and contrary to the Vienna Convention’s principles of treaty interpretation. The Court ruled that a state’s measure materially impacting an investor’s project can constitute a direct interference with the investment, regardless of whether the measure is addressed to the investor or its local entity.
The Court affirms that English courts retain full power to review jurisdictional decisions under s.67, even in investment treaty arbitrations.
Appearances:
Claimant/Appellant: Toby Landau KC, Lucas Bastin KC and Matthieu Gregoire (instructed by Jones Day)
Defendant/Respondent: Samuel Wordsworth KC, Siddharth Dhar KC and Peter Webster (instructed by Dentons)
