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Inter-ministerial panel to arbitrate with UAE firm on cancellation of bauxite supply

Inter-ministerial panel to arbitrate with UAE firm on cancellation of bauxite supply
RAKIA served a notice of arbitration under the India-UAE Bilateral Investment Promotion and Protection Agreements to the Indian government.
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In a bid to protect India’s interests in an arbitration case filed by UAE-based Ras- AL-Khaimah Investment Authority (RAKIA) for non-supply of bauxite to the company’s unit in Andhra Pradesh, the government has formed an inter-ministerial group headed by mines secretary Balvinder Kumar to handle all arbitration-related matters.

According to information available on the ministry of mines website, RAKIA served a notice of arbitration under the India-UAE Bilateral Investment Promotion and Protection Agreements (BIPA) to the Indian government on 8 December, 2016.

The Andhra Pradesh government had entered into a memorandum of understanding (MoU) with the government of Ras al-Khaimah, one of the seven emirates that make up the United Arab Emirates, on 14 February 2007 for a project related to construction and operation of an alumina and aluminium refining plant. Under the MoU, the state government agreed to direct Andhra Pradesh Mineral Development Corporation (APMDC) to supply bauxite to Anrak Aluminium Ltd (AAL), which was formed by the government of Ras al-Khaimah along with Penna group of companies.

The MoU was for mining about 224 million tonnes of bauxite from the Jerrela group of deposits in Vizag. According to a Times of India report dated 9 April, 2016, the state government issued orders for cancellation of bauxite supply agreement, which led to arbitration in the case. Ras al-Khaimah held 70% stake in AAL, while Penna held the remaining 30%.

“Citing that the dispute has arisen primarily in regard to the bauxite supply by APMDC to Anrak, RAKIA has served an international arbitration notice seeking fulfillment of the commitment to supply bauxite to Anrak or pay RAKIA the compensatory damages on total investment of $44.71 million,” a recent mines ministry notification said.

The government panel will comprise of senior officials from ministries of external affairs, environment & forest, legal affairs, tribal affairs, finance and home. The state government of Andhra Pradesh will also be a part of the inter-ministerial group.

The cancellation of the MoU for supply of bauxite by the Chandrababu Naidu government in Andhra Pradesh and is likely to find support from tribals, who have been opposing bauxite mining, citing environmental concerns.

 

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