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Law of the Republic of Uzbekistan “On international commercial arbitration”

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The President has signed the Law “On International Commercial Arbitration” (No. LRU-674, 16.02.2021). This is a big step by Uzbekistan towards the field of international arbitration, which makes it possible to effectively resolve civil disputes with the participation of a foreign element. A valuable aspect of the legal regulation of international arbitration as a peaceful settlement of private disputes is that international commercial arbitration is a special legal mechanism that reflects the principle of equality of parties in the processes, namely in economic relations between countries and organizations, regardless of their status and economic development.

Scope of application

The law is intended to regulate relations connected with international commercial arbitration in compliance with agreements in force between Uzbekistan and another state.

Disputes arising from all commercial relationships, both contractual and non-contractual, can be referred to international commercial arbitration by agreement of the parties.

Independence of the Arbitral Tribunal

Commercial arbitration is not part of the judicial system of the Republic of Uzbekistan, it is completely autonomous and independent. According to the Law, arbitration proceedings are protected from interference by courts of the judicial system, except in cases expressly provided by the Law. In the event that a claim is filed with the court, which is the subject of an arbitration agreement, if either of the parties requests this no later than the submission of their first statement on the merits of the dispute, the court must stay the proceedings and refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.

Arbitration agreement

The Law states that an arbitration agreement is an agreement of the parties to refer to arbitration all or certain disputes that have arisen or which may arise between them in respect of any defined legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.

The arbitration agreement is concluded in writing. At the same time, an arbitration agreement is considered to be concluded in writing if its content is fixed in any form, regardless of whether the arbitration agreement or the contract is concluded or not, orally, based on the conduct of the parties or by other means. In addition, an arbitration agreement is deemed to be in writing if it is concluded through the exchange of a statement of claim and a response to the claim, in which one of the parties states that there is an agreement, and the other does not object to it.

The requirement that an arbitration agreement be in writing is met by an electronic communication if the information contained therein is accessible so as to be useable for subsequent reference.

The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement provided that the contract is in writing and the reference is such as to make that clause part of the contract.

Number of arbitrators and arbitral immunity

The parties can specify the number of persons who will comprise the tribunal in the event of future disputes at their discretion. In the absence of such a determination, three arbitrators are appointed.

The arbitrators, experts appointed by the arbitral tribunal, the arbitral institution and its staff shall not be liable to the parties or other persons for any actions or omissions in connection with the arbitration proceedings, unless the act or omission is shown to have been in bad faith. They are also not obliged to give any explanation on any issue related to the arbitration, or may not be involved as witnesses in litigation or any other process arising from the arbitration.

Interim measures

An interim measure is any provisional measure, whether prescribed in the form of an award or in any other form, by which, at any time prior to the issuance of an award finally settling the dispute, the arbitral tribunal will order that one side or the other:

1) maintained or restored the situation that exists or existed before the resolution of the dispute;

2) has taken measures to prevent present or imminent harm, or harm to the arbitration itself, or has refrained from taking measures that may cause such harm;

3) provided funds for the preservation of assets at the expense of which the subsequent arbitral award can be enforced;

4) retained evidence that may be relevant to the case and be essential for the settlement of the dispute.

The interim measure prescribed by the arbitration tribunal shall be recognized as binding. In addition, the court can also order interim measures in connection with the arbitration, regardless of the seat of arbitration.

The seat of arbitration

The parties may, at their discretion, agree on the seat of arbitration. In the absence of such an agreement, the seat of arbitration is specified by the arbitral tribunal taking into account the circumstances of the case, including the factor of convenience for the parties.

However, unless the parties agree otherwise, the arbitral tribunal may meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of goods, other property or documents.

Language of the arbitration

The parties may, at their discretion, agree on the language or languages ​​that can be used in the arbitration.

Law applicable to the merits of the dispute

The arbitral tribunal shall resolve the dispute in accordance with such rules of law that the parties have chosen as applicable to the merits of the dispute.

Unless otherwise indicated, any indication of the law or system of law of any state should be interpreted as directly referring to the substantive law of that state, and not to its conflict of laws rules.

In the absence of any indication of the parties, the arbitral tribunal shall apply the law determined in accordance with the conflict of laws rules that it considers applicable.

In all cases, the arbitral tribunal makes a decision in accordance with the terms of the contract and taking into account the commercial customary practices.

Arbitral award

The award must be made in writing. The arbitral award, regardless of the country in which it was made, is recognized as binding and is enforced when a written application is submitted to the court.

The recognition or enforcement of an arbitral award may be refused only:

1) at the request of the party against which it applies, if that party presents to the court in which the recognition or enforcement is requested, evidence of that:

–  one of the parties to the arbitration agreement was in any way incompetent;

– the agreement is invalid under the legislation to which the parties have subordinated this agreement, and in the absence of an indication of such legislation – under the legislation of the country where the decision was made;

– the party against whom the decision was made was not duly notified of the appointment of an arbitrator or of the arbitration proceedings, or for other reasons could not present its arguments;

– the arbitral award is made on a dispute that is not provided for resolution in arbitration, or does not fall under the conditions for applying to arbitration, or contains decisions on issues that go beyond the scope of the arbitration agreement;

– the composition of the arbitral tribunal or the arbitration procedure did not comply with the agreement of the parties or, in the absence thereof, did not comply with the legislation of the country where the arbitration took place;

– the arbitral award has not yet become binding on the parties or its execution has been canceled or suspended by the court of the country in which or in accordance with the legislation of which it was made;

2) if the court determines that:

– the subject of the dispute is not subject to arbitration under the legislation of the Republic of Uzbekistan;

– recognition and enforcement of this arbitral award is contrary to the public order of the Republic of Uzbekistan.

Appealing an arbitral award

An appeal against an arbitral award in court is possible only by filing an application for annulment of the award, in the cases provided for by the Law. At the same time, the court has no right to reconsider the award on its merits.

Confidentiality of arbitration

The arbitration proceedings and all documents prepared for and during the arbitration proceedings are confidential, except in cases where the disclosure of such information:

1) is the obligation of the party in accordance with the law;

2) is aimed at protecting or realizing the rights and legitimate interests of third parties;

3) is necessary for the execution or challenge of the arbitral award in court.

The Law comes into force upon the expiration of six months from the date of its official publication (August 18, 2021).