Andhra Bauxite Mining Dispute

May 20, 2022

A claim that was filed by Ras Al-Khaimah Investment Authority (RAKIA) against the Indian Government for USD 273 worth of damages that were to be paid by the Andhra Pradesh government has been dismissed by the International Dispute Resolution Centre for Arbitration and Mediation (IDRC). The case was filed by RAKIA as the state government of Andhra Pradesh had failed to supply bauxite from Jerrela deposits located in Visakhapatnam district’s Eastern Ghats as per the Bauxite Supply Agreement (BSA) that was signed in October 2008.

What is the Bauxite Supply Agreement?

In the year 2007, an MoU was signed between the state government of Andhra Pradesh and RAKIA’s Indian partner Penna Group for the supply of bauxite ore for the alumina smelter and refinery at Makavarapalem, Visakhapatnam. Under this agreement, 224 million tonnes of Bauxite were to be supplied from the Jerrela Group of Mines, Chintapalli Reserve Forest. In April 2016, this agreement was scrapped by the Telugu Desam Party alleging that there were irregularities in the allotment.

What is the allegation by RAKIA?

RAKIA alleged that the failure of supplying bauxite and the BSA’s cancellation that was signed by the A. P. Mineral Development Corporation (APMDC) with ANRAK was a breach of the Bilateral Investment Treaty (BIT). The Indian Government denied any breaches and said that the IDRC’s arbitral tribunal lacked jurisdiction regarding this matter. In November 2016, a notice was served by the APMDC for the BSA’s cancellation alleging that there were breaches on ANRAK’s part.

What did IDRC say?

After extensive efforts were undertaken to come up with a solution through mediation between the parties did not yield any result the IDRC tribunal dismissed the appeal filed by RAKIA for damages, stating that the IDRC lacked jurisdiction under the BIT to entertain any claim.

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