AP reaches out to RAKIA for out-of-court settlement in Rs 1,100 crore arbitration – The New Indian Express

Express news service

VIJAYAWADA: While the second phase of the international arbitration raised by Ras-Al-Khaimah Investment Authority (RAKIA) on the cancellation of the bauxite supply agreement (BSA) between AP Mineral Development Corporation (APMDC) and ANRAK Aluminum Ltd is about to be heard last November in London, the government of Andhra Pradesh reportedly approached RAKIA in the hope of reaching an amicable settlement.

Sources from the Department of Mines informed the TNIE that the Center, which made it clear that it had nothing to say about the arbitration, suggested that the state government take the lead in resolving the issue by outside the courts. We learn that RAKIA, which only owns 13% of the capital of the alumina refinery near Makavarapalem in the Vizag agency, is asking Rs 1,100 crore as compensation.

“Besides the Center, we also believe that the chances of winning the case are lower because due process was not followed when concluding and canceling the deal. During the first phase of the arbitration, we invoked the force majeure clause (i.e. certain events, beyond the control of the parties, may prevent the parties from fulfilling their duties and obligations under of project agreements) citing Maoists killing three people to oppose bauxite mining in Visakhapatnam agency areas, ”the sources said. “However, as the invocation of the force majeure clause indicates that Andhra Pradesh is not a peaceful state and that it has public order issues, we were forced to drop the arguments going in this sense. We can win the case by bringing up the clause, but we can lose investor confidence in ‘Brand AP,’ the sources observed.

Stating that the government can offer Rs 300 crore to Rs 400 crore to RAKIA to address the issue, the sources added that Penna Group, the main partner with an 87% stake in the alumina refinery, could reimburse the amount to the alumina refinery. state government and own the refinery as a whole. RAKIA and Penna Group jointly set up the alumina plant in the Vizag agency area on the basis of the agreement with APMDC to obtain bauxite from the agency area.

However, following the state government’s cancellation of the bauxite mining agreement after banning bauxite mining in the state, RAKIA sought international arbitration for compensation. APMDC vice president and general manager VG Venkata Reddy confirmed that the state government wanted to address the issue outside of court. “We sent out proposals for mediation before the issue was heard by the Court of International Arbitration in November last week and hope to resolve the issue amicably,” Venkata Reddy told TNIE.

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