Arbitrability of investment disputes under the legislation of Uzbekistan

In recent years Uzbekistan has moved forward with further strides to promote use of international arbitration through legislative reforms, and establishment of an arbitral institution. However, attraction of foreign investments into the state necessitates further reformation of national legislation. The paper reviews the Uzbek legislation on foreign investments and touches upon arbitrability of investment disputes under the national legislation.

First, the text provides the recent historical background of the investment activity and informs on the existence of separate Uzbek laws based on the type of investment implementation, specifically, the Law on Investments and Investment Activity, the Law on Public-Private Partnerships, and the Law on Production Sharing Agreements. It also discusses the interrelation of the above-mentioned laws with each other and international treaties of Uzbekistan on foreign investments and investment protection.

Second, the article critically analyzes the four-tier dispute settlement clause provided in the Law on Investments and Investment Activity which requires exhaustion of local remedies available to foreign investors. The paper demonstrates that the four-tier dispute settlement clause of the Law is susceptible to interpretations and may turn obsolete in practice. The text touches upon the issue of consent to submit investment disputes to international arbitration and classifies the BITs of Uzbekistan into two groups, one with an express consent contained therein and one without such consent.

Third, the article shows that investment disputes under Law on Public-Private Partnerships, and the Law on Production Sharing Agreements do not require exhaustion of local remedies in contrast to the Law on Investments and Investment Activity. The text demonstrates that the above-mentioned issue leads to an illogical inference that only disputes arising from investment agreements bearing the name of an “investment agreement” would have to exhaust all 4 stages of disputes settlement under the national legislation while disputes arising from agreements named “public-private partnerships” or “production sharing agreement” can enjoy direct submission to international arbitration.

The article proposes to unify the Uzbek law on foreign investments into a single act which foreign investors most desire.

Nafosat Rahimovna Toshtemirova. ISSUES OF ARBITRABILITY OF INVESTMENT DISPUTES UNDER THE LEGISLATION OF UZBEKISTAN (full text)