<center><span class="news-text_italic-underline">Judgment Date: 20 June 2025</span></center>
The English High Court has overturned an arbitral award in a rare successful challenge under section 67 of the <span class="news-text_italic-underline">Arbitration Act 1996</span>. The case, <span class="news-text_italic-underline">RAKIA v India [2025] EWHC 1553 (Comm)</span>, arose under the 2013 bilateral investment treaty (“<span class="news-text_medium">BIT</span>”) between the UAE and India, with arbitration conducted under the UNCITRAL Rules.
The dispute concerned a major alumina and aluminium project in Andhra Pradesh. The Ras Al Khaimah Investment Authority (“<span class="news-text_medium">RAKIA</span>”) invested US$42.5 million through its subsidiary ANRAK. The Andhra Pradesh Mineral Development Corporation (“<span class="news-text_medium">APMDC</span>”), a state entity, signed a supply agreement for bauxite in 2008. After local protests, the Host Government cancelled approvals and directed APMDC to terminate the supply agreement in 2016, effectively collapsing the project.
RAKIA commenced arbitration, but in May 2022 the tribunal (Lord Hoffmann, Justice Chandramauli and William Rowley KC) ruled that it lacked jurisdiction under the BIT. The tribunal found that although RAKIA’s investment had suffered, the measures taken by India were applied to ANRAK and not directly to RAKIA’s investment, as required under the BIT.
Knowles J disagreed with the tribunal. Applying Article 31 of the <span class="news-text_italic-underline">Vienna Convention on the Law of Treaties</span>, he emphasised that jurisdictional clauses in BITs should be interpreted neutrally, neither broadly nor restrictively. He found that RAKIA’s investment was not limited to its shares in ANRAK, but also encompassed its direct financial contribution and pledged assets, all of which were protected under the BIT.
On that basis, the government measures, including the executive order cancelling the supply agreement and subsequent directions to APMDC, were binding actions targeted at the project itself. Knowles J concluded that these constituted “Measures” for the purposes of the BIT, applied directly to RAKIA’s investment. By adopting an overly formalistic interpretation, the tribunal had wrongly denied jurisdiction.
The judgment illustrates that although section 67 challenges are rarely successful, with only one of 31 such challenges succeeding between 2022 and 2024, the English courts will intervene when tribunals adopt an interpretation that unduly narrows the protection afforded under investment treaties.
The decision also highlights the limits of the kompetenz-kompetenz principle, reminding tribunals that courts retain authority to correct jurisdictional errors. Importantly, the case clarifies that when a state takes executive action directly dismantling a project in which a foreign investor has participated, such acts can qualify as measures applied directly to the investment, regardless of whether they are formally channelled through a local subsidiary.
This is not the first time Knowles J has set aside the decision of a tribunal chaired by Lord Hoffmann, recalling his decision in <span class="news-text_italic-underline">P&ID v Nigeria [2023] EWHC 2638 (Comm)</span>. Together, these rulings underscore the English courts’ willingness to scrutinise tribunal decisions where jurisdiction has been unduly curtailed.
