Arugam Bay, known locally as "Arugam Kudah", is situated on the Indian Ocean in the dry zone of Sri Lanka's southeast coast, and a historic s…Arugam Bay, known locally as "Arugam Kudah", is situated on the Indian Ocean in the dry zone of Sri Lanka's southeast coast, and a historic settlement of the ancient Batticaloa Territory. Arugam Kudah's literal Tamil translation is "Bay of Cynodon dactylon".