The Court of Appeal has unanimously dismissed India’s appeal. The London-seated tribunal’s 2022 award declining jurisdiction stays set aside, and the claim goes back to the tribunal on the merits.
Background
RAKIA, the investment arm of Ras Al Khaimah, put US$42.5 million into ANRAK Aluminium Ltd to build an alumina refinery in Andhra Pradesh. Its stake was later diluted to about 12%. The refinery depended on bauxite supplied by a state-owned corporation (APMDC) under a Bauxite Supply Agreement (BSA). After public protests, the Government of Andhra Pradesh issued GOM 44 in April 2016 nullifying the orders that authorised the BSA, and APMDC then cancelled it. RAKIA invoked UNCITRAL arbitration in December 2016.
The jurisdictional hurdle
Article 10.2 confines investor–State arbitration, for India, to “Measures” taken by the Centre or States in exercise of executive power. Article 1.8 defines a Measure as binding action “applied directly to an Investment”. The tribunal (Lord Hoffmann, Chair) held that GOM 44 hit ANRAK and APMDC, and affected RAKIA’s shares only indirectly, so there was no jurisdiction. In June 2025 Robin Knowles J disagreed, and India appealed.
What the Court of Appeal decided
What is the “Investment”?
It is the cash (US$42.5m), later the shares, and the share pledge, not the project as a whole. Article 1.1’s “change of form” clause means the shares simply replace the cash with no double counting. RAKIA’s alternative argument that ANRAK’s assets, including the BSA, were its Investment failed: as a 12% minority holder it neither owned nor controlled ANRAK.
What does “applied directly” mean?
The asset must be viewed as an investment, not just as shares. Through the change-of-form clause, a shareholding keeps its character as capital invested in the host territory in the project the company was set up to run. Action that directly hits the BSA, and so the project, is therefore applied directly to the Investment. Phillips LJ’s example: if the whole US$42.5m were expropriated just after being paid in, no one would say the Investment was only indirectly affected merely because the shares were untouched.
Reading the BIT as a whole
India’s narrow view would have left the substantive protections “emasculated” for the commonest form of investment, shares in a local company.
Travaux and the White Industries narrative
India’s reliance on its post-White Industries review of BITs failed. Agreed negotiating minutes did not “clearly and indisputably” show a definite intention, as Article 32 VCLT requires, following Infrastructure Services Luxembourg v Spain [2026] UKSC 9.
“Targeted at” was rejected.
Phillips LJ disagreed with the judge’s test that Measures apply directly only if “targeted at” the investment: an industry-wide regulation could also apply directly. The real contrast is with indirect or consequential effects of action aimed elsewhere. This was subsidiary and did not change the result.
Other points worth noting
Interpretive approach
Investment-treaty jurisdiction clauses are read even-handedly, neither pro-investor nor pro-State. The Court explained that the remark in Ecuador v Occidental (No 2) [2007] allowing doubts to be resolved for the investor is no presumption; object and purpose may at most tip an otherwise uncertain outcome.
Freestanding offer to arbitrate
RAKIA tried to revive its argument that Article 10 does not depend on there being a “Measure”. It had abandoned the point before the judge, so the Court refused to hear it, stressing the finality and first-instance primacy that section 67 of the Arbitration Act 1996 promotes.
Pledge
Males and Miles LJJ reserved their view on whether the share pledge was itself an Investment, as it added nothing to the outcome.
Why it matters
For investors, the decision confirms that minority, non-controlling shareholders may be protected where State action cripples the project they funded, even though the Measure is aimed at the company or its contracts. For States, it shows that a narrowly drafted arbitration offer is only as narrow as its words, and “directly” will not be read to require action on the share certificate itself. It also matters for India’s model BIT thinking, since the treaty’s unusual limits (executive Measures only) still do not shut out typical equity investments.
Republic of India v Ras Al Khaimah Investment Authority [2026] EWCA Civ 1358 (22 October 2026)
This post is a general summary of the decision in the aforesaid case, and should not treated or construed as legal advice.