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ANDHRA PRADESH BAUXITE MINING DISPUTE

Updated: Jul 30, 2022


In this dispute, the International Dispute Resolution Centre (or IDRC) dismissed the claim of the Ras-Al-Khaimah Investment Authority (or RAKIA), which pertains to the issue of the state of Andhra Pradesh not supplying bauxite to them from Visakhapatnam violated the Bilateral Investment Treaty. This treaty was signed between India and the UAE. The damages claimed in this situation amounted to a total of $273 million payable by the Government of Andhra Pradesh for their failure to supply the bauxite as agreed by them in the Bauxite Supply Agreement signed by them in October 2008. The Government of India also became a party to this dispute due to the BIT agreement between India and UAE, which was done to construct an alumina refinery by the corporation called Anrak Aluminium Limited, which was incorporated by RAKIA. According to the agreement, the bauxite was supplied from the Jerrela deposits in the Eastern Ghats in Visakhapatnam. The amount of bauxite to be provided to RAKIA was 224 million tonnes, and the supply was to be done to the alumina.


This BSA was cancelled by the Telugu Desam Party, who alleged that there were many irregularities in the allotment. When they filed the claim, RAKIA stated that this cancellation and the failure in the bauxite supply to their facility was a breach of the BIT that India and UAE were parties too.


Against this claim filed by RAKIA to the IDRC, the Government of India stated that the arbitral tribunal of the authority lacked jurisdiction in this situation as the provisions of the BIT regarding arbitration did not apply to the current situation. The main concern raised was on the notice issued by the Andhra Pradesh Mineral Development Corporation (or APMDC) in November 2016 pertaining to the cancellation of the BSA, which they had entered into with RAKIA.


When efforts through the process of mediation failed to yield any concrete results, the IDRC arbitral tribunal dismissed the claim of damages filed by RAKIA. The reasoning given by the tribunal in this scenario was that they lacked the jurisdiction to entertain any claims as per the provisions of the Bilateral Investment Treaty entered into by India and UAE.


In India, this project also raised a massive outcry from civil rights and tribal activists as it violated the law, which prohibited the transactions pertaining to land between tribals and non-tribals in certain specific regions to prevent exploitation of the tribals.


This dismissal of the claim was a massive victory for both the central government and the state government of Andhra Pradesh. It showed the effort of the country to not go against the rights of the tribals and prevent exploitation against them.




Submitted By

Aryan Aggarwal

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