20 september 2018

Central Asia news

Uzbekistan refuses to recognize international structures' jurisdiction over investment disputes

22.11.2006 10:33 msk


Business Uzbekistan

Foreign investors in Uzbek economy may now forget about appeals to international courts in the hope to defend themselves, thanks to the verdict of the Constitutional Court of Uzbekistan (November 20).

Until now, Part 1 of Article 10 of the law "On guarantees to foreign investors and protection of their rights" permitted resolution of investment disputes in line with the rules and procedures of the international treaties Uzbekistan is a signatory of. Foreign investors' lawyers who thought that the decisions of Uzbek courts pertaining their customers were unfair usually appealed to the Convention on resolution of investment disputes between states and foreigners ratified by the Supreme Council of the Republic of Uzbekistan on May 6, 1994. In other words, a foreign businessman or company retained the right to appeal to international structures as arbiters.

The latest meeting of the Constitutional Court discovered, however, that the law "On guarantees to foreign investors and protection of their rights" does not stipulate the so called consent of the involved parties - that of Uzbekistan in this particular case - for having investment disputes settled at the international level. In other words, Uzbek justice is not going to recognize foreign businesses' attempts to defend their interests (investments) at international courts unless they provide a written consent of all involved parties.

"It does not really matter that practically every law in Uzbekistan contains a passage to the effect that whenever something in national legislation collides with international norms and practices under the treaties Uzbekistan subscribed to, the international norms take precedence," independent journalist Sergei Yezhkov said. "As far as the Constitutional Court of Uzbekistan is concerned, this rule is not absolute. Potential investors had better bear it in mind or it may cost them..."