 1. What does adoption of the Law of the Republic of Uzbekistan “On Courts of Arbitration” mean for the Chamber of Commerce and Industry and for you personally? Could you brief us on the goals and objectives of the Law, its importance for the civil society and for the further expansion of multifarious activities of the Chamber of Commerce and Industry of Uzbekistan?
The Law “On Chamber of Commerce and Industry of the Republic of Uzbekistan” (adopted in 2004) assigns the CCI RUz to establish courts of arbitration aimed at resolution of economic disputes. Along with the Law, in the Republic of Uzbekistan there were a number of legislative acts urged to provide, guarantee and protect the rights of entrepreneurs and foreign investors, including a possibility to settle disputes at the courts of arbitration. However, all such acts envisaged only partial opportunities to submit the disputes to courts of arbitration for settlement. On the other hand, the legislation in force did not envisage an efficient, reliable and clear mechanism both for resolution of the disputes by the courts of arbitration and execution of the related court decisions; such practice prevented the courts from conducting full-fledged activities targeted at settlement of disputes.
In order to resolve such problems and implement provisions of the Law of the Republic of Uzbekistan “On Chamber of Commerce and Industry of the Republic of Uzbekistan”, and in compliance with Presidential Decree “On Measures for Further Improvement of Legal Support System for Entrepreneurship Entities (#UP-3619, 14.06.2005), the Chamber of Commerce and Industry of the Republic of Uzbekistan, in cooperation with a number of stakeholders (ministries and agencies), has developed the draft Law of the Republic of Uzbekistan “ On Courts of Arbitration”; the Law was adopted on October 16, 2006 and came into effect on January 1, 2007.
The major target of the Law is to regulate relations in the sphere of establishment of courts of arbitration, their competence and arbitration procedure, composition of the courts of arbitration, costs related to resolution of disputes at the courts of arbitration; the Law describes general rules applicable to arbitration and its decisions. Procedure of compulsory execution of the court of arbitration decisions is one of the most important targets of the law.
After adoption of the Law, the related amendments were made to the Civil and Civil Procedure Codes, as well as to the Economic Procedure Code, the Law “On Contract and Legal Basis of Activity of Economic Entities”, Law “On Implementation of Judicial Acts, Acts of Other Authorities”, Law “On State Due”. In the other words, now the required legislative basis is completed to ensure efficient activities of the courts of arbitration in Uzbekistan.
As a result, the courts of arbitration are already established and work within the Chamber of Commerce and Industry and within its territorial departments. Popularity of the courts of arbitration, as an efficient mechanism of settlement of disputes, grows day by day and creates a favouarble environment for the further development of business activities; such mechanism is a significant step to increase the investment attractiveness of Uzbekistan and to form an efficient dispute settlement system in Uzbekistan complying with the international standards.
Besides this, efficient activities of the courts of arbitration have become an important step to the practical implementation of such priorities of the national policy as the further intensification of the market reforms, judicial and legal reforms, and of the principle “from the strong State to the strong society”.
2. Before now, either economic or civil courts have been involved in protection of the legal rights and interests of entrepreneurship entities (there are more than four hundred thousand of such entities in the Republic). After adoption of the new law, courts of arbitration will also be engaged in settlement of disputes that may arise between the entrepreneurship entities. Are there any advantages if the cases are judged at the arbitration courts? If yes, what are they?
International practice proves that most of entrepreneurship entities submit the disputes arising between them for the court of arbitration proceedings. Today, more and more of businessmen in Uzbekistan provide their contracts with the clauses on settlement of disputes at the courts of arbitration, in the case such disputes may arise between them; they conclude additional agreements with their partners to submit the current disputes under the contracts for consideration by the courts of arbitration. The reasons are evident.
First, consideration of disputes at the courts of arbitration is conducted much faster, and this factor is very important for the present-day business. Arbitration envisages only one instance, whereas the state courts may involve several instances for such proceedings (appeal, cassation, supervision, submission for a new trial). On the other hand, settlement of a dispute of any complexity at the court of arbitration, due to its simplified but reliable procedure, takes 20-80 days from the moment when a plaintiff submits his claim to the court of arbitration to the date of the court decision.
Second, compared to the state judicial system, arbitration is more efficient from the economic point of view since it is not necessary to pay the state due at several instances, and because of reduction of costs related to the lawyer's or legal adviser's services.
Third, the courts of arbitration decisions are final and become effective immediately after the hearing; they cannot be appealed against at the state court.
And, what is very important, in the case of non-fulfillment of the decision in a voluntary manner, the law ensures its compulsory execution by the procedure stipulated for execution of the state court decisions.
Courts of arbitration look attractive because the parties of any dispute may individually elect arbiters for settlement of a dispute arisen between them; such arbiters may be selected from the list of arbiters whom the parties trust in terms of their professionalism, qualification and experience. Besides this, the parties of any dispute may, on their own discretion, agree on the venue and time of arbitration hearings, on the language of arbitration, number of arbiters, terms of the dispute settlement, and on the other rules to be administered by the courts of arbitration in the course of the dispute settlements.
The parties of arbitration enjoy a real opportunity to reach an amicable agreement and preserve business partnership since the courts of arbitration do their utmost for conciliation of parties.
Sessions of the courts of arbitration are conducted in camera, and this fact does not allow publicizing any information on availability of a dispute between the parties and disclosing any of its details; it also guarantees confidentiality of any commercial secrets.
3. Only one year has passed from the date of adoption of the Law “On Courts of Arbitration”. But the Uzbekistan Chamber of Commerce and Industry did a lot. Tell us, please, what you have done and what you are going to do in order to fully implement provisions and requirements of the Law “On Courts of Arbitration”.
The Uzbekistan Chamber of Commerce and Industry is proud to state that, after adoption of the Law “On Courts of Arbitration”, it has became one of the first organizations to establish courts of arbitration. The Court of Arbitration within the Chamber of Commerce and Industry of the Republic of Uzbekistan was established on January 12, 2007; at the moment, the Court is one of the most trustworthy courts of arbitration in Uzbekistan. The CCI RUz has concluded settlement agreements with a number of commercial banks, credit unions and sectoral associations. These agreements envisage submission of disputes, which may arise between them, for consideration at the Court of Arbitration of the CCI RUz.
Besides this, courts of arbitration have been successfully established in the territorial departments of the CCI RUz, i.e. in the Tahskent, Andijan, Ferghana, Namangan, Khorezm, Syrdarya and Bukhara oblasts. The Chamber is very active to establish and arrange efficient activities of the courts of arbitration in all the regions of the Republic.
In order to enhance the businessmen's awareness of arbitration itself, to let them know how to submit disputes for settlement at the courts of arbitration and how the dispute resolution procedures are arranged, the CCI RUz, within the framework of its joint project with the OSCE Project Coordinator in Uzbekistan, has arranged and conducted a series of workshops in all the regions of the Republic; entrepreneurs always receive explanations on the issues, and the court of arbitration-related documents, information materials and recommended forms of the arbitration clause and agreements are placed in the Chamber website (www.chamber.uz) and in the “Norma” information edition.
However, despite the measures taken entrepreneurs are not well aware of arbitration, its advantages and opportunities to settle the disputes at the courts of arbitration, and due to newness of the arbitration institute in Uzbekistan, there is a certain distrust of businessmen to such kind of settlement.
In order to solve this problem, within the framework of the joint project with the OSCE Project Coordinator in Uzbekistan, it is planned to repeat a series of workshops on arbitration in all the regions of the Republic and conduct conferences and trainings in the city of Tashkent. It is also planned to make audio and video reels dealing with arbitration, which will be later broadcasted on radio and TV.
Lack of skilled and knowledgeable experts in the area of arbitration (lawyers, economists and representatives of the other professions who may be engaged as potential arbiters) is also a critical issue. In association with this, development and inclusion of a training course on “Arbitral Jurisdiction” into curricula of the higher and secondary educational establishments may be the most optimal solution of the problem. Such training courses are available in many foreign countries, and the CCI RUz will keep on working on development and implementation of this experience in Uzbekistan.
We are confident that the Chamber of Commerce and Industry of Uzbekistan takes its best efforts to efficiently implement provisions of the Law “On Courts of Arbitration” and develop and popularize the arbitration system in Uzbekistan. We recommend all the organizations, including the American Chamber of Commerce membership, to submit their disputes for professional arbitration settlement at the arbitration courts that have been established within the Chamber of Commerce and Industry of the Republic of Uzbekistan.
4. The Law ”On Courts of Arbitration” excludes international commercial arbitration from its regulatory competence since this notion has its peculiarities and specific features which require a specific legal regulation. Explain to us, please, what these peculiarities and specific features are. What do the Uzbekistan lawmakers do to establish an institute of commercial arbitration, in particular, to establish the international commercial arbitration within the Chamber of Commerce and Industry of Uzbekistan?
International commercial arbitration and courts of arbitration are established for settlement of disputes arising from the civil jurisdiction and, in their essence, they are of a similar nature. In many countries, legislation combines them into one definition “arbitration”. Institute of arbitration (courts of arbitration), in its turn, is divided into international and “national” (internal) arbitration. If any disputes involve any foreign element (parties of the contract belong to different States, contract implementation takes place in different countries, etc.) then the arbitration proceedings of such a dispute are called the international arbitration, if any dispute does not contain such an element this arbitration is considered and internal. Many countries adopt one general law to regulate both types of relations.
The CIS countries have taken another way: as a rule, they adopt two separate laws, i.e. one for courts of arbitration and one for the international commercial arbitration. It is conditioned by the fact that settlement of disputes inside the Republic, its compliance with the legislation of Uzbekistan, allows to more specifically regulate the issues relating to the dispute resolution and arbitration activity, and to account the national peculiarities up to the maximum.
As for the international arbitration, in the case of different legislations, legal, social and economic systems of different countries, it is very difficult to settle disputes by arbitration; in the future, such resolution may evoke collisions and conflicts of legislations to which the contract itself and parties of the dispute belong. Problems with differences in the international arbitration legislations occur when, in the course of arbitration, one of the parties or both of them face unfamiliar foreign provisions and procedures. Under such conditions, application of local traditional concepts how to resolve the disputes does not look reasonable; in this case, it is important to provide consistency of legislations applicable to the international commercial arbitration in different countries.
The Model Law “On International Commercial Arbitration” (1985) is used for this purpose; it was published by the UN Commission on International Trade Law (UNCITRAL) and stipulated the international standards for arbitration proceedings acceptable for the parties from the countries with different legal systems. The Model Law is recommended for adoption by all the States.
It should be mentioned that the Law of the Republic of Uzbekistan “On Courts of Arbitration” does not restrict opportunities of foreign citizens and organizations to act as a party of the arbitration proceedings. The Chamber of Commerce and Industry has already gained its experience how to settle disputable and problematic issues by the reconciliation procedures, if economic courts and even international courts of arbitration fail to resolve them at their levels. However, in order to make Uzbekistan more attractive for the parties when they select the venue for arbitration, it is required to provide complete compliance of the national law on the international arbitration with the Model Law that has been developed by UNCITRAL; adoption of the Model Law will allow to stimulate the Chamber activities targeted at settlement of international commercial disputes.
With this view, the Chamber of Commerce of Industry of the Republic of Uzbekistan, in cooperation with the Ministry of Justice, Ministry for Foreign Economic Relations, Investment and Trade, Ministry of Economics, State Property Committee, Supreme Economic Court and Supreme Court of the Republic of Uzbekistan has developed a draft of the Law of the Republic of Uzbekistan “On International Commercial Arbitration”; the Law, based on the Model Law, is submitted for consideration at the Cabinet of Ministers of the Republic of Uzbekistan, and later on it will be passed to the Legislative Chamber of the Oliy Majlis of the Republic of Uzbekistan.
We hope that the Law will be adopted in the nearest future. |
