by Shaxrizoda Mamasoliyeva
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September 18, 2021

As a result of lengthy discussions, the Law On International Commercial Arbitration(ICA) was adopted on February 16, 2021. The Legislative Chamber approved this document on August 5, 2020, and the Senate on September 11, 2020. It is expected that the adoption of this document will contribute to the country’s economic potential, the rights and obligations of subjects of ICA Law. In addition, the adoption of this law can be considered an integral continuation of the ongoing reforms in the country’s judicial, legislative, and executive systems over the past decade. Arbitration gives not only the parties greater freedom but also the ability to control the dispute resolution process. This is especially important in international commercial arbitration. Adoption of the ICA Law by Uzbekistan has led to including countries whose legislation is based on UNCITRAL Model Law. This blogpost analyses the new policy of Uzbekistan on International Commercial Arbitration with the UNCITRAL Model Law, identifies the main differences and similarities between them and provides a consistent conclusion at the end.

Current structure of Law

Concerning the structure of the Law on International Commercial Arbitration, we can see that the Law on International Commercial Arbitration consists of the following main sections:

1. General rules;

2. Arbitration Agreement;

3. The composition and jurisdiction of the arbitral tribunal;

4. Security measures and initial decisions;

5. Arbitration proceedings

6. Adoption of the arbitral award and termination of the hearing;

7. Appeal against the decision of the arbitral tribunal;

8. Closing Rules.

Looking at the UNCITRAL Model Law, we can see that it consists of eight main sections;

  1. General provisions;
  2.  Arbitration agreement;
  3. Composition of the arbitral tribunal;
  4. A) Jurisdiction of the arbitral tribunal; B) Interim measures and preliminary orders;
  5. Conduct of arbitral proceedings;
  6. Making of award and termination of proceedings;
  7. Recourse against award;
  8. Recognition and enforcement of awards

If we analyze the main differences between the structure of the law and the UNCITRAL Model Law, the chapters of the Law on International Commercial Arbitration entitled “General Provisions” and “Arbitration Agreement” are similarly named in UNCITRAL Model Law. The ICA Law deals with the composition and jurisdiction of the arbitral tribunal, while the UNCITRAL Model Law sets out the chapters on the composition and jurisdiction of the arbitral tribunal.

In UNCITRAL Model Law, the content of sections such as “Interim measures and preliminary orders,” “Conduct of arbitral proceedings”, “Making of award and termination of proceedings,” and “Recourse against award” is defined in the same order in ICA Law. However, the chapter on Recognition and Enforcement of Awards in the UNCITRAL Model Law is not explicitly addressed in ICA Law, and the last chapter is devoted to the “Final Rules”.

Analysis of arbitration law: similarities and differences

First of all, the legal definitions and explanations given in Article 2 of the UNCITRAL Model Law do not specifically mention the term “arbitrator,” and Article 5 of the law adopted: an arbitrator is a person adopted by the parties to settle a dispute in arbitration in an agreed manner.

To be more precise, the arbitrator considers testimony and evidence presented by the disputing parties in court and resolves the dispute by making a decision that may include a monetary reward. The parties may not require the court to set aside the decision if arbitration is mandatory, except in very limited circumstances. However, the successful party may seek the assistance of the court to enforce the arbitral award. This means that the arbitrator acts as a “decision-maker” in the arbitral tribunal, just like a judge in a trial. The ICA Law and the legal definition given above are consistent and clear and are the basic norm in determining the identity and responsibilities of an arbitrator.

Secondly, Article 38 of the ICA Law allows for representation in arbitration proceedings, not provided in UNCITRAL law. So what is the content of representation in arbitration? This norm stipulates that Uzbekistan offers several conveniences and opportunities to both parties to the conflict in the alternative settlement of disputes, which in turn allows the parties to the dispute to comply with the legislation of Uzbekistan in resolving their disputes:

  1. The content of representation in arbitration means that the parties may conduct their work in arbitration directly or at the parties’ discretion, including through authorized representatives appointed from foreign organizations and citizens.
  2. This provision stipulates that if the two parties to the dispute do not have the opportunity to participate in the arbitration proceedings or if the parties have agreed to do so, they may participate in the court through their representatives.
  3. Authorized representatives of both parties participating in the arbitration proceedings may also be appointed from among foreign organizations and citizens of Uzbekistan.

Thirdly, ICA Law contains provisions on the immunity of arbitrators and other participants in arbitration proceedings, which are not reflected in the UNCITRAL Model Law. So, the question naturally arises: what is meant by the immunity of arbitrators and other participants in arbitration proceedings? As provided in ICA Law, arbitrators, experts appointed by the arbitral tribunal, the arbitral tribunal and its staff shall not be liable to the parties or other persons for any act or omission relating to the arbitral proceedings, unless such act or omission is proved to be intentional. This rule means that if the arbitrator or any person participating in the arbitration proceedings is not liable to the parties for the action or omission arising in this case. In addition, this article protects such persons from being called as witnesses in arbitration or other court proceedings.

In fact, although the issue of immunity of arbitrators and other participants in arbitration proceedings is not defined in the UNCITRAL Model Law, this rule is an important factor for representatives of international commercial arbitration. It also argues that immunity helps ensure the finality of arbitral awards. In addition, if arbitrators are to be granted preferential treatment, this may prompt the parties to sue the arbitrator during the arbitration proceedings. It should be noted that without immunity, many qualified people do not want to arbitrate. In countries with common law, courts grant arbitrators immunity in the performance of their semi-judicial duties. The United States will probably create the most favorable conditions for arbitrators and provide almost absolute immunity to arbitrators who make decisions. Some states in the United States even provide immunity by law.

The Australian Law on International Arbitration of 1974 states, “[a] an arbitrator shall not be liable for anything that has not been conscientiously acted upon or acted upon by the arbitral tribunal. In the United Kingdom, an arbitrator can be held liable for his conscientious conduct, even if the court finds that he left the arbitration without good reason. In disputes over granting immunity to arbitrators, the release of arbitrators from liability carries the risk of inciting negligence, fraud, and abuse of power, and the finality of decisions should not be more important than personal justice. In addition, there are no disciplinary measures that can be taken against arbitrators. These problems are usually exacerbated by the fact that arbitral awards cannot be overturned for legal or factual errors. Despite this risk, Uzbekistan has legalized the granting of immunity to arbitrators and participants in arbitration proceedings. This is one of the peculiarities of ICA Law.

What are the advantages of ICA Law for Uzbekistan?

Implementation of ICA Law will develop the institute of arbitration as an important part of civil society in Uzbekistan, create the necessary legal conditions for protecting the rights and legitimate interests of entrepreneurs in foreign economic activity, and resolve disputes arising from foreign economic agreements. It will be possible to reduce deadlines and costs. Given the need for stable legislation for investment attractiveness, it can be assumed that the adoption of the ICA Law will provide the following advantages:

1. The existence of an independent and impartial international arbitration in Uzbekistan that meets international practice and requirements is an additional guarantee for both local and foreign businesses. As a result, the local business environment and the investment attractiveness of our country will increase.

2. The entry and operation of well-known international commercial arbitration institutions in Uzbekistan will increase the interest of foreign investors in our country.

3. International commercial arbitration causes additional foreign investment in the national economy.

4. Facilitate the promotion of the TIAC Arbitration Center established in Uzbekistan in 2018 by the Decree of the President of the Republic of Uzbekistan (No. PQ-4001) as a regional arbitration center.

Conclusion

As a result of the above legal analysis, it should be noted that the content of ICA Law is in line with international arbitration law and shows that the UNCITRAL Model Law has been implemented into national legislation. It is reasonable to assume that the newly adopted Law is essential for Uzbekistan as a separate institution for alternative dispute resolution. ICA Law will also help reduce the costs of arbitration disputes, increase the recognition and enforcement of arbitration decisions in arbitration centers worldwide, and increase Uzbekistan’s role in resolving international disputes in the region.

Cite as: Shaxrizoda Mamasoliyeva, “Analysis of the new policy of Uzbekistan in the development of international commercial arbitration,” Uzbekistan Law Blog, 18.00.2021.