Kluwer Arbitration Blog

The third edition of the annual Uzbek Arbitration Week (UzAW 2023), held in Tashkent, Uzbekistan between 10-15 September 2023, continued its mission to establish Uzbekistan as the preferred seat for arbitral proceedings in the CIS region and beyond. The flagship conference “Putting Uzbekistan on Global Arbitration Map” organized by the Chamber of Commerce and Industry of Uzbekistan and the United States Agency for International Development (USAID) served as a platform to showcase the ongoing legal transformation taking place in Uzbekistan.

This post provides an overview of the key highlights from the event.

Uzbekistan As the Preferred Seat of Arbitration

The first panel of the UzAW 2023, titled “Putting Uzbekistan On the Map of Global arbitration as a Preferred Seat for Arbitral Proceedings in the CIS Region and Beyond – Latest Developments,” captured the essence of this new direction. Mr. Mike Freer, Parliamentary Under Secretary of State at the Ministry of Justice of the UK, gave introductory remarks. Mr. Freer emphasized the economic benefits and global significance of international arbitration for Uzbekistan. Drawing on his experience in the financial sector, Mr. Freer stressed the importance of efficient dispute resolution to foster strong trade relationships. Mr. Freer highlighted the advantages of international arbitration, including flexibility, speed, confidentiality, and enforceability under the New York Convention. He also discussed the essential components for a successful arbitration jurisdiction, such as a stable legal system and government support.

The panel was composed of Shukhrat Povlonov, Deputy Chairman of the Supreme Court of Uzbekistan; Davron Vakhobov, Chairman of the Chamber of Commerce and Industry; David Hoffman, Director of the USAID Representative Office in Uzbekistan; and Diana Bayzakova, Director of the Tashkent International Arbitration Centre (TIAC). The discussion was moderated by Nodira Zikrillaeva.

The panelists discussed efforts to develop Uzbekistan’s arbitration sphere, a theme explored throughout the week. Diana Bayzakova, director of the TIAC, further explained how these changes have influenced the choice of TIAC as a preferred arbitral institution and have also shaped the perception of Uzbekistan as a neutral jurisdiction.

Mr. Hoffman raised the issue of adequate enforcement of arbitral awards, when considering the openness of Uzbekistan to foreign investment projects, through sharing his personal experience in the analysis of states’ investment regimes. With regard to access to justice in Uzbekistan, Mr. Polvonov addressed the changes in the domestic legal framework that are favourable for the promotion of arbitration in Uzbekistan. For instance, the economic procedural code was amended to better serve the needs of the parties to arbitrations, including the enforcement of awards and interim measures. He also emphasised that new initiatives are under consideration to develop transparency in the work of the domestic courts.

The panelists went on to discuss how cross-jurisdictional collaboration could help overcome challenges. Mr. Mike Freer spoke about cooperation between the UK and Uzbekistan to support foreign investments. Mr. Vakhobov and Mr. Povlonov announced a memorandum of understanding between the Supreme Court and the Chamber of Commerce to exchange legal information and data, including the court judgments on issues of the enforcement of awards, and translation of these court judgments into English. Diana Bayzakova, director of the TIAC, also introduced a similar collaborative agreement between TIAC and Jus Mundi to publish redacted non-confidential TIAC awards and other information about TIAC cases, including the arbitrators who are being appointed by the TIAC Court of Arbitration.

Climate Change and Arbitration

The second panel focused on the role of commercial and investment international arbitration amidst the rampant climate change concerns from the perspectives of public international law, Uzbek and Central Asian jurisdictions, as well as from a socio-economic standpoint.

Diana Tsutieva, a partner in Foley Hoag’s International Litigation & Arbitration Group, explained the need to include environmental standards and responsibility clauses in BITs. The participants discussed the International Court of Justice’s (ICJ) advisory opinion function, which involves providing guidance on issues related to state obligations, the promotion of development, and the protection of environmental rights. Sardor Ruziev, Director of Legal Department of the Ministry of Investment, Industry and Trade of Uzbekistan, provided the Uzbek perspective on this debate and insights into Uzbekistan’s climate change developments and the role of BITs in this field.

As one of these developments, Alexey Anishchenko, partner at SORAINEN, provided the example of online hearings for the proceedings of the arbitral institutions of Central Asia. This insight turned the audience’s attention to matters of international commercial arbitration and the responsibility of arbitral institutions to keep their ESG commitments. With regard to future developments, Dmitriy Alaudinov, EBRD Consultant, commented on the required consistency in State legislation and enforcement of decarbonization obligations. He shared the recent projects of EBRD.

Beyond Borders: Tashkent International Commercial Court

The third panel of the event concerned the establishment of the Tashkent International Commercial Court (TICC). In recent years, the international arbitration community has been fixated on the emergence of internationally acclaimed commercial courts in multiple jurisdictions across Europe, Asia, and the Middle East. Questions have been raised about whether these courts might pose a competitive threat to arbitration by offering an alternative venue for the settlement of international commercial disputes. Building on these prevailing trends, Uzbekistan also announced plans to establish its own international commercial court in Tashkent. The panelists engaged in a comprehensive discussion of the subject, addressing its implications and potential consequences.

The session began with Faris Nasrallah, a senior arbitration counsel at Crescent Petroleum and TIAC Court of Arbitratoin member, providing a general overview of international commercial courts. He noted that for developing States seeking to increase investment into their jurisdictions, commercial courts provide a symbolic indication of readiness to protect investors’ interests and abide by the rule of law.

Marie-Anne Birken, General Counsel at the EBRD, addressed the establishment of the TICC. Ms. Birken shared insights into the latest developments surrounding the TICC, shedding light on the driving forces behind its creation, principally focused on providing a reliable forum for resolving disputes involving foreign investors. Emphasizing the TICC’s integration within the Uzbek legal system, Ms. Birken noted that the TICC may be granted jurisdiction over commercial disputes involving at least one foreign-owned or controlled entity. A noteworthy aspect of the TICC is that its proceedings are supposed to be conducted in English. Thereafter, Cornel Marian, a member of the TIAC Court of Arbitration, shared his views on the interplay between the TIAC and TICC. Cornel contended that harmonious coexistence between the two entities is entirely plausible, supporting the notion that the establishment of the TICC could indeed prove advantageous for the TIAC, particularly with regard to the enforcement of arbitral awards.

The discussion continued with Dmitry Kaysin, partner with Dispute Resolution practice and Managing Partner of RGD International Central Asia, offering insights into international commercial courts and financial centers in places like the Netherlands, France, and Dubai, shedding light on benefits for Uzbekistan. Sherzod Abdulkasimov, Founding Partner of PraeLegal Uzbekistan, then provided an overview of the Uzbek legal system and his opinion on domestic laws regarding the recognition and enforcement of foreign and domestic arbitration awards.

TIAC-HKIAC Cross-Institutional Rules

Last year, Hong Kong International Arbitration Centre (HKIAC) entered into a cooperation agreement with TIAC to formalize the arrangements between two institutions under the TIAC-HKIAC Cross-Institutional Rules (Rules), which came into force in September 2022.

The concluding session commenced with Diana Bayzakova, director of the TIAC, explaining the history and reasons behind the Rules. She underscored that among the driving factors behind the establishment of these Rules was the necessity for what can be termed a “neutral” institution or a jurisdiction-neutral seat to resolve some disputes with an Uzbek nexus.

As explained by Joe Liu, TIAC Court of Arbitratoin member, under the newly adopted Rules, TIAC will handle key administrative tasks like registering arbitration requests, communicating with parties and tribunals, managing deposits, and extending time limits. Meanwhile, HKIAC will assume certain procedural functions according to the Rules, such as determining jurisdictional issues before tribunal establishment, appointing arbitrators and emergency arbitrators, ruling on arbitrator challenges, handling consolidation requests, deciding on additional party joinders prior to tribunal establishment, and scrutinizing awards.

Dr Mariel Dimsey, Secretary-General of the HKIAC, introduced HKIAC’s work, emphasizing its reputation for quality service and Hong Kong’s role as a leading arbitral seat. Dr Dimsey and Mr Liu offered insights into how Hong Kong’s unique legal blend makes it attractive, and they highlighted court support and favorable enforcement.

Diora Ziyaeva, TIAC Court of Arbitratoin member and a member of Dentons’ International Dispute Resolution group, compared Tashkent as an arbitration seat to Hong Kong. Diora also shared that the enforcement statistics are very positive.

Mr Liu and Yan Kalish, a counsel at RGD’s Dispute Resolution, discussed the value of cross-institutional cooperation in administering arbitration. They noted examples of institutions working together but emphasized that the Rules establish an extensive framework beyond mere collaboration.

Conclusion

UzAW 2023 successfully showcased Uzbekistan’s commitment to becoming a preferred seat for arbitral proceedings in the CIS region and beyond. It further solidified Uzbekistan’s position on the map of global arbitration and demonstrated its commitment to providing a transparent and efficient dispute resolution mechanism, making it an attractive choice for businesses and investors.