The bay is about 90 km in length and up to 35 km in width. Its 45 km wide mouth stretches from Cape Shield in the north-east to Cape Barrow in the south-west, with Woodah Island in between. It has a diverse inner coastline of many small bays, inlets, headlands and islands, bordered by intertidal mudflats and mangroves merging into freshwater floodplains. The bay and the adjoining floodplains are held by the Arnhem Land Aboriginal Land Trust as Aboriginal freehold land. The waters of the bay are used for commercial and recreational fishing, especially for mud crabs. The northern part of the bay and its surrounds are part of the Laynhapuy Indigenous Protected Area, which is planned to be extended to include the remainder of the coastal waters and islands of the bay.
Flora and fauna
Plants
Triumfetta litticola, a plant species endemic to the Arnhem Coast bioregion, has been recorded. The threatened Australian arenga palm is also found here, as well as 34 plant species endemic to the Northern Territory.
Birds
The bay's seasonally flooded coastal plains have been classified by BirdLife International as an Important Bird Area. The area covered by the IBA is 45,811 ha. It supports globally important numbers of magpie geese, wandering whistling-ducks, and brolgas. Many other waterbirds breed in colonies on the floodplain, especially egrets, herons and spoonbills, while the mudflats are used by flocks of migratory waders in summer. Wader species using the site in large numbers include black-tailed godwits, lesser sand plovers and red-necked stints. The islands hold significant breeding colonies of little, black-naped and bridled terns.
Other animals
The beaches of the bay's larger islands are important for nesting flatback sea turtles. There is a large colony of little red flying foxes in the mangroves at the northern end of the bay. The threatened brush-tailed rabbit rat is present. Douglas' skink is endemic to the Northern Territory. Introduced water buffalos and feral pigs threaten the wetlands.
Blue Mud Bay case
The Blue Mud Bay case was the name given to a court case with original reference to the ownership of fishing rights in tidal waters overlying Aboriginal land at Blue Mud Bay. The case was eventually decided by the High Court of Australia on 23 July 2008 when it ruled on an appeal made by the Northern Territory, the Commonwealth of Australia and the Northern Territory Seafood Council against a decision made by a lower court in March 2007. The High Court ruled that the water lying over Aboriginal land should not be treated differently from the land itself. Ownership of Aboriginal land adjoining marine waters in the Northern Territory generally extends to the low tide level. Since people have always had to obtain permission from the traditional owners or the appropriate Land Councilto go on to Aboriginal land, the Court made it clear that such permission is also required to go on to water overlying that land.
