CL-2022-000304 - [2025] EWHC 1553 (Comm)

Article 10.2 of the BIT refers to “Measures underlying a dispute taken by the Central Government and/or the state governments while exercising their executive powers in accordance with the Constitution of India”. Article 1(8) of the BIT provides that “Measure” means “any form of binding action taken by a Contracting Party under any law, rule or regulation and applied directly to an Investment”.

GOM 44 (or GOM 44 and the Show Cause and Termination Letters) was a “binding action” on RAKIA’s case.

The Tribunal expressed the view that “so far from being ‘binding action’, GOM 44 did not bind anyone to do anything” and was therefore not a “Measure” as defined by the BIT (Award para 104). When the Tribunal expressed that view, I consider that it was expressing the limited conclusion that “GOM 44 did not itself cancel the BSA” (Award para 107). But that in my judgment stops short of the complete picture. GOM 44 set in motion and was followed by the letter of 28 April 2016 from the Government of Andhra Pradesh to APMDC Ltd and then the Show Cause and Termination Letters.

The Tribunal recorded that RAKIA went on to argue (at Award para 107):

“… [RAKIA] alleges that even if GOM 44 did not itself cancel the BSA, it was a direction by the government to APMDC [Ltd], [sic] a wholly owned state corporation, to terminate the contract. The termination was therefore a governmental action. Alternatively it argued that APMDC [Ltd], [sic] as a corporation controlled by the government, was itself a state organ and its acts were ipso facto governmental actions. …”

The Tribunal said:

“There is considerable dispute as to whether the purported termination of the BSA was pursuant to GOM 44, which did not direct APMDC [Ltd] [sic] to terminate the contract but purported to nullify its authority to have made it in the first place, and as to whether as a matter of international law, APMDC [Ltd] [sic] – a commercial company with separate personality – can be regarded as an organ of the state. But the Tribunal does not find it necessary to decide these questions and is prepared to assume in the Claimant’s favour that, one way or another, the termination of the BSA was an act attributable to the [Government of Andhra Pradesh]. The question is then whether it was a Measure as defined; i.e. binding action applied directly to an Investment. …”

The Tribunal does not say why in its view the Government of Andhra Pradesh should have “purported to nullify [APMDC Ltd’s] authority to have made [the BSA] in the first place”, if that was not to alter or end the BSA. For my part, I consider it clear enough that by GOM 44 the Government of Andhra Pradesh was taking binding, executive, action to alter or end the BSA.