A. LEGISLATION AND RULES
A.1 Legislation
Arbitration in Uzbekistan continues to be governed by domestic legislation, as well as by international treaties ratified by Uzbekistan. Uzbekistan is a party to a number of international and regional treaties that relate to arbitration, including the New York Convention and several CIS treaties. Additionally, Uzbekistan is a member state of the ICSID, and investors, therefore, have the right to seek settlement of disputes within the framework of this convention (subject to an arbitration agreement between investors and Uzbekistan). Regarding domestic arbitration, the Law on Arbitration Courts (Arbitration Law) was only adopted relatively recently, in 2006. The main provisions of the Arbitration Law are based on the UNCITRAL Model Law principles, but there are some significant differences. For example, an arbitral tribunal may only apply the legislation of Uzbekistan, and violation of this rule is a ground for setting aside an award. In addition to the Arbitration Law, arbitration is also regulated by the relevant provisions of the new Economic Procedural Code of the Republic of Uzbekistan (EPC)[1] adopted in January 2018.
The EPC was adopted as part of the reform of Uzbekistan’s judicial system, which was initiated in 2017 by Uzbekistan’s president, Shavkat Mirziyoyev. The EPC took effect on 1 April 2018, replacing the old Commercial Procedural Code of Uzbekistan.
The EPC includes a separate chapter regulating the recognition and enforcement of foreign court judgments and arbitral awards. Pursuant to this chapter, foreign judgments and awards will be recognized and enforced by economic courts in Uzbekistan only when doing so is provided for by either of the following:
- Relevant international treaties
- The laws of the Republic of Uzbekistan
In addition, in February 2021, the Law on International Commercial Arbitration was adopted. This law is mostly based on the UNCITRAL Model Law and addresses modern trends in international arbitration, including the execution of arbitration agreements via email exchange, provisional measures issued by the arbitral tribunals, and others.
In the development of this law, in 2022, the EPC was also amended to include rules relating to the economic courts’ assistance to international arbitration proceedings in Uzbekistan, including issues relating to the appointment and challenge of arbitrators, interim measures, and collecting evidence.
In addition to that, in November 2023, the Plenum of the Supreme Court of Uzbekistan adopted a resolution where, among other things, it clarified the EPC’s provisions relating to the enforcement of foreign arbitral awards and confirmed that Uzbekistani courts should apply the New York Convention.
A.2 Institutions, rules and infrastructure
After the adoption of the Arbitration Law in 2006 and of relevant sub-laws regulating the procedure of establishing and registering arbitration institutions, the number of arbitration institutions registered in Uzbekistan significantly increased. There are currently around 25 arbitration institutions in Uzbekistan.
However, as in most other CIS jurisdictions, the most widely used of these are two arbitration institutions established by the Uzbek Chamber of Commerce and Industry: the Domestic Arbitration Court (DAC) and the International Commercial Arbitration Court (IAC).
The DAC was established in 2007, shortly after the adoption of the Arbitration Law, to arbitrate domestic disputes. In 2011, the Uzbek Chamber of Commerce and Industry decided to establish the IAC to review disputes in which at least one of the parties is a foreign company.
The DAC and the IAC handle all types of commercial disputes between local and foreign companies, with the exception of disputes that are non-arbitrable under Uzbek law (e.g., disputes relating to the registration of rights over immovable property and challenges to decisions of state authorities).
At the same time, as mentioned above, the IAC’s activity is not regulated by local laws, and the enforceability of its awards in Uzbekistan may be debatable.
In November 2018, the Tashkent International Arbitration Center (TIAC) was established. The TIAC resolves disputes arising from contractual and other civil law relations between commercial organizations through international arbitration.
The TIAC also resolves disputes related to investments, intellectual property and blockchain technologies. Accepting applications for dispute resolution through international arbitration, as well as holding hearings and other proceedings, can be carried out online using modern information and communication technologies without the presence of arbitrators and parties. Representatives of parties involved in resolving disputes through international arbitration at the TIAC do not require a license to practice law when reviewing arbitral awards in the competent courts of the Republic of Uzbekistan, nor when considering any issues in the arbitration disputes considered at the TIAC.
The TIAC has the right to resolve disputes through a mediation procedure and other alternative dispute resolution methods in the manner prescribed by law.
B. CASES
Since the legal basis for arbitration in Uzbekistan was formed relatively recently, Uzbek courts do not have significant experience in applying these laws, meaning that their practice is inconsistent.
One example of such inconsistent practice is the recent decision of the Uzbekistani Supreme Court on the application seeking the recognition and enforcement of the arbitral award issued by International Commercial Arbitration Court at the Russian Chamber of Commerce and Industry. Among other reliefs, the award ordered the defendant to pay the interest until the principal debt is paid.
In this case, the defendant raised public policy as a defense, arguing that the amount of the interest ordered by the arbitrators was more than the interest cap set forth in Uzbekistani law or only up to 50% of the principal debt.
While the Supreme Court rejected this argument, it supported the lower court’s decision that the enforcement of the part of the award relating to the collection of the interest should be rejected as it might be difficult to determine the exact amount of the interest which should be collected from the defendant.
The above decision illustrates the complexity of enforcing a foreign arbitral award that provides for the payment of interest.
With respect to investment arbitration cases, under the new trend in Uzbekistan in the settlement of its disputes with investors, pro-state outcomes of investment arbitration cases against Uzbekistan are not unusual. The government has become much more experienced in investment arbitration, and foreign investors need to be very well prepared if they wish to successfully protect their rights in investment arbitration proceedings. Often, the government takes a very aggressive position and will argue its case in front of arbitral tribunals. However, we have also seen cases in which the government has tried to settle foreign investors’ claims amicably.
[1] The Economic Procedural Code of the Republic of Uzbekistan, approved by Law of the Republic of Uzbekistan. No. ZRU-461, dated 24 January 2018.
