Court of Appeal finds UNCITRAL Tribunal has jurisdiction over investment treaty dispute

Republic of India v Ras Al Khaimah Investment Authority [2026] EWCA Civ 1358 (22 October 2026)

In a previous article, we looked at the Commercial Court decision in this case, in which the Court decided that a UNCITRAL arbitral tribunal had jurisdiction over the dispute between the parties.

In doing so, the Court disagreed with the UNCITRAL Tribunal’s construction of the dispute resolution provision in the relevant bilateral investment treaty: UNCITRAL Jurisdiction: Investment Treaty | Hill Dickinson.

The Republic of India (India) subsequently appealed that decision. The Court of Appeal has dismissed the appeal and largely endorsed the Judge’s approach to the interpretation of the relevant provisions of the treaty.

The background facts

The appeal concerned the scope of the investor-state arbitration provisions in a bilateral investment treaty signed in December 2013 between the governments of India and the UAE (BIT).

Pursuant to 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’.

Under 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’.

In December 2016 the Ras Al Khaimah Investment Authority (RAKIA), the investment arm of the Government of Ras Al Khaimah, UAE, issued a notice of arbitration under UNCITRAL arbitration 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 (GoAP), which resulted in the cancellation of the bauxite supply contract between APMDC and ANRAK (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 (as defined in the BIT) and the prohibition of expropriation of Investments.

Arbitral proceedings

In May 2022, the London-seated arbitral tribunal issued a final arbitration award (Award), finding that RAKIA's claim did not fall within the scope of Article 10 and therefore the Tribunal had no substantive jurisdiction to determine it.

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. Nonetheless, the Tribunal held that the acts in question had only an indirect effect on that investment, being directly applied only to ANRAK and APMDC.

RAKIA challenged the Tribunal's decision on substantive jurisdiction under s.67 of the Arbitration Act 1996.

The Commercial Court decision

The Court held that the GoAP had taken binding executive actions which had applied directly to RAKIA's investments in Andhra Pradesh as they were ‘targeted at’ that Investment (within the very broad definition in Article 1.1 of the BIT). Those actions were, therefore, Measures within Article 10.2 of the BIT. Consequently, the Tribunal did have substantive jurisdiction in relation to RAKIA's claim.

The Court set aside the Award and remitted the dispute to the Tribunal to determine it on its merits.

India appealed on two grounds:

1. The Judge was wrong to regard RAKIA's Investment, at the time of the relevant executive actions, as being in the alumina and aluminium industry in Andhra Pradesh rather than simply being RAKIA's 12% shareholding in ANRAK.

2. 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.

RAKIA opposed those grounds of appeal. It contended that:

1. The Judge was right to find that the relevant executive actions applied directly to its shareholding in ANRAK. In the alternative, he should have held that RAKIA’s Investment extended to include, in particular, the BSA. RAKIA's Investment should be regarded as including the BSA because it was common ground that the relevant executive actions were applied directly to that contract.

2. An executive action should be regarded as applied directly to an Investment if there was a "direct nexus" between the executive action and the Investment.

The Court of Appeal decision

The BIT was to be interpreted in accordance with customary international law principles of treaty interpretation as codified in the Vienna Convention on the Law of Treaties 1969 (Vienna Convention).

On the authorities:

1. Article 31 of the Vienna Convention requires that the words of a treaty should be interpreted in light of its object and purpose.

2. It is permissible to resolve any uncertainties in interpretation in favour of the “investor” given that the object and purpose of a BIT was to provide effective protection for investors.

3. Jurisdictional provisions in a BIT did not have to be construed narrowly. An even-handed approach should be taken to their interpretation.

According to India, the Judge had incorrectly equated RAKIA's Investment with the overall project, a precursor to finding that executive actions had directly applied to the Investment so analysed.

The Court of Appeal thought there was no merit in this challenge. The criticism of what the Judge found as to what constituted RAKIA’s Investment was misconceived. The Judge recognised that RAKIA initially invested cash, for which it received shares, a ‘change of form’ within Article 1.1 of the BIT, the ‘Definitions’ provision, which states in relevant part as follows:

‘1. The term "Investment" means every kind of asset invested by the Investors of one Contracting Party in the territory of the other Contracting Party in accordance with the laws, and regulations of the Contracting Party in whose territory the Investment is made and in particular, though not exclusively, includes:

…

(ii) shares, stocks, bonds, debentures and any other similar forms of participation in a company and other debts and loans and securities issued by an Investor of a Contracting Party and returns retained for the purpose of reinvestment;

(iii) rights or claims to money or to any performance under contract having financial or economic value;

…

Any change of the form in which assets are invested or reinvested does not affect their character as Investment.’

The Judge did not suggest anywhere in his judgment that the Investment was simultaneously both cash and shares. He regarded the cash as the initial Investment, superseded immediately by the shares allotted to RAKIA in exchange for that cash.

The real question was whether the Judge was right to regard executive actions affecting ANRAK's business as applying directly to RAKIA's Investment, which he correctly identified as its minority shareholding in ANRAK (and rights arising from the pledge of those shares).

The Court of Appeal dismissed RAKIA’s argument that its Investment included ANRAK’s assets. It had only a minority shareholding in ANRAK at the time of the relevant executive actions.

However, for the purposes of the BIT, a minority shareholding allocated to an Investor in exchange for capital investment in a company was not regarded as just an interest in the company which may be held anywhere in the world. Instead, it retained the ‘character’ of assets invested in the territory of a Contracting Party, unaffected by the change from monies paid by way of the initial investment to an equivalent shareholding.

It followed that the question of whether an action was applied directly to an Investment held through a shareholding had to be determined on the basis that the asset in question was invested in the relevant territory in the project the company was set up to establish, develop and execute.

That reading of the BIT made sense of and gave meaning to the protections given to Investments in its substantive provisions, most of which would be emasculated by a reading which limited them to executive actions applied only to the assets of the company, with only an indirect effect on the Investment, viewed simply as shares.

The Court of Appeal, therefore, endorsed the Judge’s conclusion that the executive actions of the GoAP in the present case applied directly to RAKIA's Investment. That Investment was in a company formed to establish an alumina and aluminium industry in Andhra Pradesh, exploiting local deposits of bauxite. The executive actions in question directly applied to it, ending the availability of the primary supply of bauxite and leading to the termination of the contract (BSA) by which it was to be supplied.

The appeal was, therefore, dismissed.

Comment

All that RAKIA needed to establish at the jurisdictional stage was that the executive actions in question applied directly to its Investment, causing damage to the value of its shares.

The Court of Appeal found that GoAP’s cancellation of the contract pursuant to which bauxite was to be supplied to ANRAK's refinery (BSA), which undoubtedly was a 'Measure' within the meaning of Article 1(8) of the BIT, was 'applied directly' to the shares in ANRAK held by RAKIA.

It remains to be seen what the Tribunal will conclude on the merits of the dispute.

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