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

Shortly after the MOU, on 23 March 2007 ANRAK Aluminium Limited was incorporated under the Indian Companies Act 1956.

On 6 April 2007 RAKIA (“Government of Ras Al Khaimah, UAE through its investment arm … RAKIA … and its associates/ affiliates and its nominees …”) and a company by the name Penna Cement Industries Limited (“with its associates”) entered into an agreement titled (in capitals) “Share Holders Agreement”. Penna Cement Industries Ltd was described as a Company registered under the Indian Companies Act, 1956.

The parties to the Share Holders Agreement took shares in ANRAK Aluminium Ltd. They recited in the agreement that they did so “to establish the … Alumina and Aluminium Industry” in Andhra Pradesh and had “accordingly” formed ANRAK Aluminium Ltd.

The Share Holders Agreement included these recitals:

“WHEREAS, First Party – Government of Ras Al Khaimah, UAE and Government of Andhra Pradesh, India concluded [the MOU], whereby First Party has agreed and undertook to incorporate an Indian registered limited Company, which will set up an Alumina Plant and Aluminium Smelter in the State of Andhra Pradesh by using the bauxite reserves available at Jarella Mines …

AND WHEREAS, on the basis of the [MOU] and long standing relationship with [Penna Cement], the First Party – Government of Ras Al Khaimah, UAE approached [Penna Cement] for necessary support and co-operation in establishing the Alumina/Aluminium plant in the State of Andhra Pradesh.

AND WHEREAS [Penna Cement] has confirmed that the Alumina & Aluminium Industry in Andhra Pradesh is technically feasible, financially viable and it was decided by both [RAKIA] and [Penna Cement] to enter into a Shareholders Agreement to establish the said Alumina and Aluminium Industry.

Accordingly the company was formed in the State of Andhra Pradesh under Indian Companies Act, 1956 in the name and style of [ANRAK Aluminium Ltd]”

Article 1.1 and 1.2 of the Shareholders Agreement provided:

“1.1

The total cost of the project including working capital margin requirements have been estimated at Rs 4,300 crores … Debt equity ratio shall be 70:30.

1.2

The required equity capital of [ANRAK Aluminium Ltd] … shall be brought in to the extent of 30% by [RAKIA] and the balance 70% by the second party to the Share holders Agreement, “[Penna Cement]”

Article 3 was titled “Project” and provided:

“3.1

The project execution shall be by [Penna Cement] and [Penna Cement] agrees to obtain all statutory approvals/permissions for the implementation of the project and implement the project successfully.

3.2

The changes made by [Penna Cement] in determining the Project capacities by adopting best economic viability shall be subject to [RAKIA’s] approval.”

Article 4 was titled “Business” and provided:

“4.1

[ANRAK Aluminium Ltd] shall be engaged in the following business activities:

a.

The manufacture, production, marketing, distribution, import, export Alumina, Aluminium & associated/ related products and power.

b.

Lease/or acquire, construct and operate bauxite mine facility.

c.

Any industrial, manufacturing and commercial activity relating directly or indirectly to the objects of [ANRAK Aluminium Ltd], without limitations, any necessary actions for the use of advanced methods and techniques, protection of acquired rights and establishment of affiliated companies for engineering and industrial activities in connection with the objects of [ANRAK Aluminium Ltd].

4.2

The principal place of business of the company shall be in the state of Andhra Pradesh, India.”

The Tribunal summarised that between 14 February 2007 (the date of the MOU) and 30 October 2008 (the date of an agreement known as the BSA, next described below):

“RAKIA invested some US$30.8 million by way of subscription for 30% of the issued share capital of ANRAK [Aluminium Ltd]. The other 70% was taken by an Andhra Pradesh company named Penna …”

Mining leases were granted to APMDC Ltd on 28 December 2007.