October 16, 2023
Settlement of investment disputes in the Republic of Uzbekistan.
Introduction.
In the Republic of Uzbekistan (hereinafter referred to as “RUz”), the settlement of investment disputes is carried out through various mechanisms and procedures. Further, we will discuss the main issues related to disputes between the Republic of Uzbekistan and investors.
Content.
II. Dispute resolution mechanisms.
V. The courts of the Republic of Uzbekistan.
VI. International arbitration.
6.1. Conditions for consideration of an investment dispute in arbitration.
6.2. Expression of consent through a bilateral investment agreement.
- The law of the Republic of Uzbekistan №LRU-598 “On investments and investment activity” of December 25, 2019; (hereinafter – the Law “On Investments”)
- The Law of the Republic of Uzbekistan №LRU -482 “On mediation” of July 3, 2018;
- Economic Procedure Code of the Republic of Uzbekistan (hereinafter – “EPC RUz”);
- Code of the Republic of Uzbekistan on administrative proceedings (hereinafter –“COAP RUz”);
- The decision of the Constitutional Court of the Republic of Uzbekistan on the interpretation of the first part of Article 10 of the Law of the Republic of Uzbekistan “Оn guarantees and measures to protect the rights of foreign investors” of November 21, 2006 (hereinafter – “The Decision of the Constitutional Court”).
II. Dispute resolution mechanisms.
- Negotiations;
- Mediation;
- The Court of the Republic of Uzbekistan;
- International Arbitration.
According to Article 63 of the Law “On investments”, a dispute which occurred during the investment activity of a foreign investor in the territory of the Republic of Uzbekistan and related to foreign investments is resolved through negotiations. This mechanism is a process of voluntary and direct discussion of a disputed issue between the parties in order to achieve a mutually acceptable solution. It follows from the meaning of Article 63 of the Law “On Investments” that any investment dispute must first be resolved through negotiations.
Article 63 of the Law “On Investments” states that if the parties to an investment dispute cannot reach an agreed settlement of the dispute through negotiations, such a dispute should be resolved through mediation. It is unclear whether this mechanism is mandatory since mediation is implemented based on the will of the parties in accordance with Article 15 of the Law on Mediation.
V. The courts of the Republic of Uzbekistan.
According to Article 63 of the Law “On investments”, an investment dispute that is not settled through negotiation and mediation, must be resolved by the relevant Court of the Republic of Uzbekistan.
In accordance with Article 25 of the EPC RUz and Article 27 of the COAP RUz, investment disputes are subject to consideration by economic and administrative courts. It is important to take into account that the subject of the dispute is of great importance in determining the jurisdiction of the dispute. According to Article 271, administrative courts consider cases between investors and administrative bodies, self-governing bodies of citizens on decisions, actions (inaction) of their officials related to compliance with the terms of the investment agreement.
VI. International arbitration.
6.1. Conditions for consideration of an investment dispute in arbitration.
According to Article 63 of the Law “On investments”, an investment can be resolved through international arbitration under the following conditions:
- If an investment dispute is impossible to resolve through negotiations, mediation, or by a competent Court of the Republic of Uzbekistan
- When there is a specifying arbitration clause in an international agreement of the Republic of Uzbekistan
- When there is an arbitration agreement (clause) between the investor and the RUz.
Not all references in national legislation are equivalent to consent to the jurisdiction of arbitration or an offer to the investor to recognize the jurisdiction of the arbitration court. Article 63 of the Law “On Investments” explicitly states that the consent of RUz to arbitration of an investment dispute can only be a written consent within the framework of signed and effective international treaties of RUz and (or) the agreement concluded between the investor and RUz at the time of application to international arbitration. At the same time, this article does not contain the concept of “consent of the party”. This interpretation was supported by the decision of the Constitutional Court of RUz regarding the previous version of the Law “On Investments”.
6.2. Expression of consent through a bilateral investment agreement.
The agreement of the State on the settlement of investment disputes in the international arbitration court based on the bilateral investment agreements has become a widespread practice. A bilateral investment agreement expresses the consent of two contracting States to submit to the jurisdiction of arbitration in the interests of citizens of another State party to the agreement.
Many investment disputes involving the Republic of Uzbekistan were resolved by international arbitration based on bilateral investment agreements of the Republic of Uzbekistan. For example, in the case of ROMAK S.A (Switzerland)&Uzbekistan, the investment dispute between the parties was resolved by international arbitration on the basis of UNCITRAL, the bilateral investment agreement provided for the consent of the parties to consider the dispute in arbitration.
