OREANDA-NEWS. June 03, 2013. The Government of Uzbekistan is planning to introduce a draft law to the Oliy Majlis of Uzbekistan, which will clarify article 10 of the law “On guarantees and measures on protection of rights of foreign investors”, the First Deputy Minister of Justice of Uzbekistan Esimurat Kanyazov said.

In interview to UzA agency, Esimurat Kanyazov said in process of realization of long-term economic relations there could be disputes. He said existence of effective system on protection of rights of investors is a key part of investment climate.

As a rule, all disputes are solved by the concerned sides and if they cannot reach agreement, the dispute can be directed to courts at the country, which received investments, or international arbitration. At the same time, the sides should have written agreement to address dispute to the arbitration.

He said that article 25 of the Convention on order of solving investment disputes between the states and foreign persons envisages that both sides in written form agree to solve dispute at the international arbitration.

He said that usually such agreements indicated in agreements signed between the governments and investors. However, in all cases there is need agreement of the government to transfer dispute to the international arbitration.

The Uzbek official said that Uzbekistan jointed several agreements on mutual encouragement and protection of investments, which protects rights of investors in case of dispute with the government.

In particular, the documents, which Uzbekistan signed, envisage to transfer investment disputes to arbitrations on rules of International center on settlement of investment disputes (Washington), International arbitration court under International Commerce Chamber (Paris), Arbitration Court at Stockholm Commerce Chamber, or other operating arbitration or adhoc arbitration, Kanyazov said.

Investors can also include clauses on dispute resolution to agreements, which they are signing with Uzbekistan. He said that Uzbekistan joined New York convention on the Recognition and Enforcement of Foreign Arbitral Awards from 19 June 1958. So, investors have several directions for solving investment dispute in Uzbekistan.

The Uzbek official said that there are some cases with foreign investors incorrectly interpret legislation of Uzbekistan. For example, the article 10 of the law “On guarantees and measures on protection of rights of foreign investors” wrongly interpreted by investors. The article says that if the dispute is not solved in the result of negotiations, the dispute should be solved at the Economic Court of Uzbekistan or arbitration in line with rules and procedures of international agreements on solving investment disputes, which Uzbekistan signed.

Kanyazov said that the clause only determines one of the ways of solving dispute, but it does not include agreement of the government to transfer dispute to arbitration. He said that the Constitution Court issued official interpretation of the clause on 20 November 2006 and it said that the article 10 of the agreement is not expressing agreement of Uzbekistan to transfer any investment dispute to international arbitration.

However, some foreign investors are wrongly interpreting the article. They consider that the article says that Uzbekistan agree to transfer dispute to international arbitration.

In this connection, the Government of Uzbekistan plans to amend the article 10 of the law “On guarantees and measures on protection of rights of foreign investors” to clarify the clause. In particular, it is planned to clearly indicate that the article 10 is not expressing agreement of Uzbekistan to transfer dispute to international arbitration.

Esimurat Kanyazov said that but this does not mean that investment disputes in Uzbekistan will not be considered at international arbitration. He added that the legislation envisages issuance of the agreement to transfer dispute to international arbitration.

He added that amendments to article 10 are to clarify it, not to limit rights of foreign investors. Issuance of agreement of Uzbekistan to consider at international arbitration should be considered at each concrete case and it should be reflected in written form.

He said that the draft law will meet interest of foreign investors and strengthen protection of their rights through correct interpretation of the legislation. The dispute cases will be also considered in line with all procedures of international arbitration.