The Projects and Construction Review: Uzbekistan
The Republic of Uzbekistan is a relatively young country and its economy and legislation are in their formative stages. Project financing of certain sectors of Uzbekistan's economy, such as industry, infrastructure, construction and energy, plays an important role in the country's development. The importance of attracting investment has been repeatedly emphasised in speeches by the current President of Uzbekistan, Shavkat Mirziyoyev.
To maintain the level of investment inflows, it is important to lay a macroeconomic foundation and foster a favourable investment climate. Although the investment climate is not in an ideal state currently, it is being developed, and the opening up and liberalisation of the economy have led to improvements. This is reflected in Uzbekistan's ranking in the World Bank's Doing Business survey: in 2016, it was in 87th position and in 2019, it had risen to 69th position.2 Between 2017 and 2020, the share of investment in GDP almost doubled (40.9 per cent in 2019, 37.1 per cent in 2020). Net foreign direct investment inflows rose to 3–4 per cent of GDP in 2017–2020.3
International financial institutions (IFIs) play an important role in the development of the investment climate. Uzbekistan recognises the importance of this and makes effort to cooperate with IFIs, such as the European Bank for Reconstruction and Development (EBRD), the Asian Development Bank and the International Finance Corporation.4 For example, in October 2021, a mandate letter was signed with the EBRD for a corporate loan without a state guarantee to finance an investment project for the construction of overhead powerlines.
The year in review
The year 2020 was marked by development in the implementation of public–private partnership (PPP) projects and 2021 was no exception. Amendments and additions to the PPP Law were introduced in 2021 to address some of the inaccuracies and ambiguities that had been identified since the PPP Law was passed in June 2019. In 2021, along with PPP projects in the energy, transport and health sectors, PPP methods started to be implemented in education and infrastructure.5
In early 2019, Uzbekistan began to implement measures to join the World Trade Organization and has made significant progress since then.6
It is well known that corruption is a major factor inhibiting development of the investment climate. In 2021, an anti-corruption review of legal acts, including legal acts in the field of investment, was initiated. Based on the results of this review, a roadmap was adopted at the end of March 2022 to eliminate the identified corruptive factors in the legal regulation of investment activities.7
A notable event at the beginning of 2022 was the first Tashkent International Investment Forum, which was attended by more than 2,000 major investors and high-ranking guests from 56 countries. At the end of this forum, 97 investment agreements worth US$7.8 billion were signed, as well as preliminary agreements on the implementation of projects worth US$3.5 billion. In addition, the Ministry of Energy signed cooperation agreements with the International Finance Corporation and the EBRD in the field of renewable energy.
At the end of 2019, Uzbekistan adopted the Law on Investments and Investment Activity, which means that land can now be privatised. This, along with the developments above, conveys a clear message to the investment community that Uzbekistan is open to investment and signals the country's commitment to attracting more capital.
Documents and transactional structures
i Transactional structures
Uzbekistan's PPP legislation does not restrict parties in choosing a PPP model. Usually, the PPP model depends largely on the requirements of the public partner and the specifics of the project. So far, the following PPP models have been used in the implementation of PPP projects in 2021–2022 in Uzbekistan:
- Build-operate-own-transfer: this model has been applied to a 1,000 MW wind farm project implemented by ACWA Power (Saudi Arabia).
- Design-build-finance-operate: the first 100 MW solar photovoltaic power plant implemented by Masdar (United Arab Emirates) was structured under this model.8
- Design-build-finance-operate-maintain: a solar photovoltaic power plant project with a capacity of up to 300 MW is being planned using this model.9
- Design-build-finance-operate-maintain and transfer: a project on modernisation and operation of Samarkand International Airport is using this model.10
- Affermage (operation and maintenance (O&M) and modernisation): a project on modernisation and the operation of Tashkent's district heating systems, implemented by the French company Veolia, is using this model.11
Depending upon the complexity and source of financing, a project finance transaction may generate a large number of transactional documents. The precise requirements will depend upon the type of project, the ownership structure, the regulatory environment and the level and nature of public sector involvement.
When implementing complex projects, the following transactional documents may be required:
- Project documents:
- shareholders' agreement, joint venture agreement, joint operation agreement, investment agreement, engineering, procurement and construction (EPC) contract, offtake agreement, supply agreement, concession or licensing agreement, production sharing agreement, power purchase agreement, operation and maintenance agreement, technical service agreement, etc;
- design documentation adapted to local standards and examined by the local regulator;
- terms of reference or financial and economic reports, or both; and
- feasibility studies or cost analyses, or both.
- Finance documents:
- financing agreements with lenders: loan agreement, intercreditor agreement, equity bridge loan agreement, hedging agreement, including direct agreements; and
- security documents such as charge and mortgage agreements (bonds and insurances).
- Specific documents:
- a presidential decree outlining the project details and providing for the legal regime required for implementation of the project, the tax and customs benefits, and any other exemptions necessary for the project's bankability;
- land allotment documents in the form of a land lease agreement; and
- tender documents consisting of general, technical and commercial parts.
iii Delivery methods and standard forms
In terms of delivery methods and standard forms of contracts for construction contracts, Uzbekistan allows freedom of choice of methods and standards, as there are no mandatory national forms and methods, and no approved standard forms of PPP agreement.
The delivery methods and standard forms used in the construction industry in Uzbekistan depend, to a large extent, on the source of financing. Thus, if the project is financed from public sources, the EPC and EPC management methods will mainly be applied, and the standard FIDIC Silver Book and EPC forms will be used.
If the project is privately funded, developers are free to choose delivery methods and standard forms.
In addition, many projects in Uzbekistan are financed by IFIs. Usually, the FIDIC rainbow suite or other standard forms are used in these projects.
Risk allocation and management
i Management of risks
Stakeholders refer to a standard set of tools to manage risk and contract out the risks among the contractor, supplier, offtaker, sponsors, O&M consultants and other involved parties. The lender's role in this process is significant as a substantial part of risk management is developed based on the bankability of a project.
Given the fluid nature of legislative developments in Uzbekistan in certain areas, few amendments are required to be made. Any 'tweaks' to Uzbek legislation are made through the adoption of a Cabinet of Ministers resolution or a presidential resolution. They are used to add more clarity and certainty to a set of issues that might have an impact on the successful implementation and operation of a project. Such resolutions give a degree of confidence to the lenders and other stakeholders of a project.
Uzbekistan's investment law also provides mechanisms for protection from political risks (see Section IV.iii). It is also important that Uzbekistan's investment legislation provides additional guarantees and protection for foreign investors and their investments. As a result, the investor has additional means to manage risks. Such additional guarantees may be provided for in a resolution of the government of Uzbekistan, in an investment agreement or an agreement on state support for PPP projects.12
ii Limitation of liability
One of the principles of Uzbek civil law is full compensation for the losses caused by the defaulting party.13 Despite this, the civil law also envisages limitation of liability by the parties' agreement.14
A contractual limitation of liability consists of the parties setting the limits of liability that the parties consider to be the most effective, and such limits are spelled out in the contract itself. Liability limits are usually mirrored, meaning that the limits that have been applied to one party to the contract will also apply to the other party. The parties may limit the amount of liquidated damages, limit the recovery of damages and leave only liquidated damages. If no agreement on limitation of liability is reached, the limitations that have been established by law will apply. Usually, penalties are capped at 50 per cent of the outstanding obligation. The occurrence of force majeure events under Uzbek civil law is grounds for relief from liability.
iii Political risks
Investment protection is guaranteed in Uzbekistan. Investments and other assets of investors are not subject to nationalisation or requisition (expropriation), except for natural disasters, accidents, epidemics and other emergencies and subject to compliance with certain requirements established by law (i.e., an appropriate government decision, the payment of compensation adequate to the loss).
Foreign investors may also insure investments and risks on a voluntary basis.15
In the event of changes to the law, and if these changes worsen the situation of the investor and its investment, the state has provided a guarantee in the form of non-application of this law by the investor for a period of 10 years from the date of investment. However, this guarantee does not apply to all changes in legislation.
The investment legislation provides for four cases where such a guarantee is applicable:
- introduction of additional requirements that complicate the repatriation procedure or reduce the amount of the investor's income (profit);
- introduction of quantitative restrictions on the amount of investment and other additional requirements to the amount of the investment;
- restrictions on foreign investors' participation in the authorised capital of enterprises in Uzbekistan; and
- introduction of additional procedures for processing and extending the visas of foreign investors.
The investment legislation also provides a protection guarantee against any interference by state authorities in the activities of foreign investors.
Security and collateral
Lenders usually require a set of securities in their financing in Uzbekistan. The common security arrangements are charged over the moveable assets and contractual rights (receivables) and shares or participatory interests of the sponsors with SPVs; and the mortgage of real estate, including the charge over the land use rights.
It is common to have onshore security arrangements in relation to SPVs' assets in Uzbekistan and offshore security arrangements in relation to the sponsors' assets outside Uzbekistan (in cases where the sponsors are foreign investors).
In process plant PPP projects, the obligations of the offtaker are often secured by a credit support mechanism in the form of a letter of credit issued for certain agreed monthly payments. At the same time, the investors are interested in securing their investments made under the PPP agreements, while the lenders also require certain guarantees for repayment of the loans provided to the local entities. Previously, the government would issue a sovereign guarantee to address these issues; however, in recent years, it has refrained from providing sovereign guarantees for purely commercial projects This might be explained by its fiscal goals – specifically, it aimed to keep sovereign debt within 40 per cent of GDP from 2020 to 2021. As an alternative to a sovereign guarantee, under the government support agreement, the government may undertake to ensure the maintenance of the letter of credit provided by the state-owned offtaker for the agreed amount. Similarly, investors may want to negotiate the government's obligation to pay termination payments if the offtaker fails to do so.
Perfection of security arrangements is a straightforward process. The lenders appoint the security arrangement and it would be the security holder in the system. The representative of the security agent attends the notary office and sometimes files the details to the Pledge Registry under the Central Bank of Uzbekistan. Under Uzbek law, the security interest registered with the Pledge Registry will have priority over subsequent security interests.
Direct agreements are often used in project finance transactions. Uzbek law does not expressly regulate this issue. There is a presidential resolution expressly authorising state bodies and local municipalities to enter into direct agreements and 'blessing' the step-in rights and PPP Law.
Bonds and insurance
i Bonds, guarantees and debt securities issuance
Uzbek law expressly provides that a guarantee and surety can be used to secure the performance of obligations. A guarantee can be provided only by financial institutions such as banks, insurance companies and other credit institutions. Non-financial institutions cannot issue a guarantee. They can only act as sureties in connection with the borrower's obligations.
Performance bonds, advance payment bonds and other surety and bank guarantees are used as security by the lenders, contractors and SPVs or sponsors. Nevertheless, it is rare to see bank guarantees issued in connection with major contractor projects.
Bonds as debt securities are not issued within the framework of construction or project finance-based transactions. Limited liability companies are now allowed to issue bonds and, as SPVs are incorporated in the form of a limited liability company, there is potential to raise financing for major infrastructure projects by issuing bonds by SPVs and sponsors.
Under Uzbek legislation, a contractor has an obligation to insure the object of a construction project and the construction works at its own expense, unless otherwise agreed contractually by the parties.
Additional requirements are set out for projects financed by the state budget or by an international financial institution loan against the provision of a sovereign guarantee. In such projects, parties (usually contractors) should take out insurance covering the construction works, materials, equipment and machinery on site, as well as the contractor's liability for injuries, detriment to health and damage to third-party property resulting from construction and installation works.
In addition, the following types of insurance are frequently required by employers in construction contracts:
- workers' compensation;
- cargo insurance (covering loss or damage occurring while equipment and materials are in transit from the point of shipment to their arrival at the construction site); and
- mandatory insurance for vehicles and for the employer's liability.
Enforcement of security and bankruptcy proceedings
Failure of a project company to perform contractual obligations entitles the lenders to recourse to collateral based on a pledge or mortgage agreement. Recourse to collateral is subject to court proceedings unless the parties have agreed otherwise. As a general principle, mortgage and collateral agreements are subject to notary certification.
Once the court renders a decision in a lender's favour, the collateral is to be sold through a public auction. If collateral is not sold after two auctions, the lender is offered the chance to take the collateral in kind and set off the claims secured by the collateral against its purchase price. Should the lender not exercise this right, the pledge or mortgage agreement will be deemed to have been discharged.
If a project company becomes insolvent, enforcement against the collateral is subject to a bankruptcy procedure in accordance with the Bankruptcy Law, which considers that the lender will not be able to enforce its rights individually. Instead, once an application for bankruptcy has been accepted by the economic court, all the creditors are represented by the board of creditors.
Collateral consists of the entire property of a project company, and if the proceeds from its sale are not sufficient to cover all of the debts, then the proceeds are distributed to the creditors after the following debts and expenses have been paid in full:
- court expenses;
- fees to the receiver or liquidator;
- utility payments and operation costs;
- the debtor's property insurance costs;
- any liability of the debtor that arose after the insolvency procedure had been launched; and
- claims from citizens arising from damage caused to their health or property.
i Licensing and permits
The State Committee of the Republic of Uzbekistan on Ecology and Environment Protection (the Committee) is a state body in the field of ecology, environmental protection, rational use and reproduction of natural resources.16 The Committee monitors legal entities' compliance with established environmental standards for emissions and discharges of pollutants into the environment; waste generation and disposal; and environmental safety requirements for the location, design, construction and commissioning of new and reconstructed enterprises and other facilities. The Committee also issues the necessary licences for the right to use subsurface resources for the construction and operation of underground facilities for waste storage and disposal.
Preliminary project documentation and design documentation are subject to a state environmental review conducted by the Committee. The requirements for conducting this review depends on the level of environmental impact, which is as follows: high risk (Category I); moderate risk (Category II); low risk (Category III); and local risk (Category IV). The risk will be assessed according to the activities or final products that are being produced:
The category determines the term, documents and materials that will be requested, and other requirements for conducting the review.17 Once the review is completed, the Committee issues an opinion on whether the project is viable. If the project is deemed unviable, the customer may either change aspects of the project in accordance with the Committee's opinion and resubmit the materials or abandon the planned activities.
ii Equator Principles
Under Uzbek legislation, project finance transactions and construction contracts are not subject to the Equator Principles. However, the Equator Principles are being widely included in large infrastructure and energy projects financed by IFIs and foreign banks.
iii Responsibility of financial institutions
There is no administrative or criminal liability that can be applied to legal entities. However, such liability may be imposed on executive officers or other relevant authorities of legal entities that are responsible for making decisions on socio-environmental issues. The liability may vary from an administrative fine to imprisonment depending on the severity or frequency of the violation (or both). For instance, the implementation of projects that have not been deemed viable by the Committee or that deviate from the approved project, or that have not been deemed viable by financing facilities, may lead to an administrative fine imposed on officials of a legal entity. If, when designing or commissioning projects, environmental laws are violated and the potential outcome is human death, mass illness of people, negative changes to the natural environment or other serious consequences, this violation may be punished with a fine, compulsory community service, correctional works, restriction of liberty or imprisonment. Furthermore, civil liability may arise from an obligation that is imposed by parties in the agreement and can lead to claiming liquidated damages or compensation.
However, financial institutions, such as the European Investment Bank, the EBRD and the Asian Development Bank, have immunity from legal or administrative processes, including any form of arrest and detention with respect to acts performed by their representatives in their official capacity, except for cases when such financial institutions waive this immunity.
PPP and other public procurement methods
PPP projects have become widely used in the Uzbek market, especially in energy and healthcare, ecology, culture and education projects. In 2019–2021, about 260 projects were designed with the participation of relevant ministries, departments, financial institutions and private parties. The Uzbek government has modernised the legislation to make PPP projects more attractive to private parties – for example, in the beginning of 2021, price pegging was allowed within the framework of PPP and investment agreements with the government, based on decisions of the President.
The PPP Law establishes governance, initiation, private party selection procedures, the main aspects of the PPP agreements, parties' rights and obligations, and other essential aspects of PPP practice. The Agency for the Development of Public-Private Partnership under the Ministry of Finance of the Republic of Uzbekistan (the Agency) is a designated public authority, which, among other things, develops the drafts of PPP sample agreements, implements state policy in PPP projects and monitors the implementation of PPP projects.
A PPP project may be initiated by public and private parties. The project must be developed, reviewed and approved, and, upon approval, included in the Registry of PPP projects – the unified system containing information on realised PPP projects. Preparation of the PPP project (with state approval) is carried out based on preliminary financial calculations, whether the project is viable and what the optimal form of implementation will be. The project initiated by the private party must contain an innovative approach and provide a balanced benefit for both parties. The PPP project is approved and further amended by the relevant authority depending on the value of the project as follows:
- projects up to US$1 million are approved by the relevant state authority (usually the public partner of the potential project);
- projects over US$1 million and up to US$10 million are approved by the state authority in cooperation with the Agency; and
- projects over US$10 million are approved by the Cabinet of Ministers.
The selection of the private party to the PPP project may be realised in the following ways:
- through a tender procedure (the most common), which can be:
- one stage for projects up to US$1 million (in this stage, the tender documents will be reviewed to assess their compliance with qualification documents); or
- two stages for projects over US$1 million (the technical and commercial proposals will be reviewed in this stage, in addition to the tender documents); and
- through direct negotiations, in the following cases:
- the project is related to national defence capability or security;
- the private party owns IP rights or other exclusive rights or rights to a land plot and other property, which is a prerequisite for the implementation of the project;
- the project is implemented in accordance with a resolution of the President or the Cabinet of Ministers; and
- there are no other private parties interested in implementing the project.
In practice, direct negotiations are used for the implementation of large-scale energy projects that require intensive capital investments or due to a lack of competition.
Upon selection of the private party, the parties execute the PPP agreement, which can be concluded for a term of three to 49 years. Most PPP projects are realised in 10 to 30 years. Minimum requirements are set for the PPP agreement as provided by the PPP Law. However, such requirements do not prohibit further project design and incorporation of internationally accepted PPP models, such as build-operate-transfer.
The PPP Law does not prohibit parties from choosing the substantive governing law, which plays a crucial role in dispute resolution.
ii Public procurement
The updated Law on Public Procurement was adopted in April 2021 and entered into force in July 2021. There are principles incorporated in the law that must be followed while carrying out public procurement, such as professionalism and responsibility; validity; rationality; economy and efficiency in the use of financial resources; openness and transparency; competition and objectivity; proportionality; unity; integrity of the public procurement system; and inadmissibility of corruption. Certain types of public procurement procedures were broadened and can now be realised through direct agreements, resolutions or decrees of the President and resolutions of the Cabinet of Ministers. The full list of available types of public procurement procedures are as follows:
- reverse auction;
- selection of the best offers;
- procurement carried out under direct agreements; and
- other competitive types of procurement permitted by decrees and resolutions of the President and resolutions of the Cabinet of Ministers.
The designated public authority that used to be the National Agency for Project Management under the President was replaced with the Ministry of Finance. The Ministry, among other things, implements state regulation and policy in the field of public procurement; determines the procedure and scope of placement, disclosure and access to information on public procurement; and approves standard forms of announcements of procurement procedures and procurement documents.
For the purposes of public procurement, the public customer may create a procurement commission when required by the procedure (e.g., for selection of the best offer or tender). The procurement commission establishes the criteria and methods for evaluating the proposals and the terms for accepting the proposals, and determines the winner (and, if necessary, the reserve winner in competitive procurement procedures) or declares the auction invalid. The realisation of the public procurement procedure may be assigned to an authorised legal entity under the agreement on a monetary basis. The legal entity mainly completes marketing and administrative procedures, such as preparation of the draft requirements and agreements, determination of the reverse price (except for prices established by the law) and preparation of reports on procurement procedures.
The Law on Public Procurement envisages the creation of a commission for consideration of complaints (the complaints commission) by the Cabinet of Ministers. The procedure for complaints review is determined by the complaints commission's working body, the Ministry of Finance. Upon receipt of a complaint, the commission notifies the public customer within three working days of receipt and suspends the procurement procedure for up to 10 working days. The complaint review is carried in the presence of the participant except for cases when the participant was absent without a valid cause or provided its consent for review without its participation. The commission has to issue its decision within seven working days and publish it on the information portal. The information should not disclose any details that would lead to a violation of the commercial interest of the participant (performer) or threaten fair competition, except for cases when the commission makes the decision to publish them. If the commission finds that the complaint is reasonable, it may:
- establish a ban on illegal actions, decisions or execution of unlawful procedures of the public customer;
- partially or completely cancel illegal decisions of the public customer, including if the customer violates the terms of public procurement documentation;
- issue a decision on the completion of procurement procedures; and
- include the contractor in the unified register of unscrupulous performers.
The customer that filed the complaint can appeal the commission's decision to a court for further review.
Foreign investment and cross-border issues
Uzbek law does not establish special or additional licensing requirements for foreign contractors in the construction sector and, generally, there are no absolute restrictions for foreign participation. There are some limitations for the banking and mass media sectors, such as prior approval of the Central Bank of Uzbekistan for foreign investment participation or limitation of foreign shareholding to not more than 30 per cent of foreign investment in mass media. In general, obtaining licences depends on the activities that are performed. Financing activities do not require a licence. Although general construction itself does not require a licence, the following activities in the construction sector do:
- repair, construction and installation works at a height that requires industrial climbing methods;
- design, construction and repair of bridges and tunnels;
- design, construction and operation of high-risk facilities and potentially hazardous production facilities;
- design, construction, operation and maintenance of telecommunications networks; and
- design, construction, operation and maintenance of gas and oil pipelines.
The following activities, among others, require permit documents or notification to the relevant authorities:
- construction and reconstruction of railway access ways, as well as devices for loading, unloading and cleaning of cars (wagons) and containers;
- design, construction, expansion, reconstruction and technical re-equipment of some facilities, for instance explosive objects located within a radius of 15km from the airfield control point or objects with an absolute height of 50m or more; and
- development of design and estimate documentation.
Operators of construction projects may have to obtain approval of the design estimation documentation simultaneously with the examination of design solutions for compliance with fire safety and earthquake resistance requirements.18
Generally, the law provides for a number of tax and customs exemptions and benefits. There are general tax exemptions from three types of taxes (land tax, property tax and water use tax),19 which are granted under the following conditions:
- the investment amount is at least US$300,000;
- the entities are specialised in the production of goods or services and work in certain industries (the list of such industries is approved by the government and updated from time to time; however, currently, activities that are intended to be provided by McKinsey are not in the list);20
- the entities are not located in Tashkent or the Tashkent region;21
- the share of the foreign investor is at least 33 per cent;
- the direct private foreign investments are made without a guarantee of the Republic of Uzbekistan;
- the investment is in the form of cash or technological equipment; and
- at least 50 per cent of the income received as a result of the tax exemptions is reinvested for the purpose of further production development.22
The exemptions are granted for the limited term to the entities with foreign investment depending on the amount of the investments made as follows:
- US$300,000 to US$3 million: three years;
- US$3 million to US$5 million: five years;
- US$5 million to US$10 million: seven years; and
- exceeding US$10 million: 10 years.23
Furthermore, tax incentives for certain taxes – except for value added tax, excise tax on the production or sale of excisable products and tax for the use of mineral resources – may be granted by a decision of the President of Uzbekistan in the form of a reduction of the established tax rate, but not by more than 50 per cent and for a period not exceeding three years.
Removal of profits and investment
There are no restrictions on repatriation of profits by foreign investors abroad. Moreover, the Investment Law guarantees free transfer of funds in a foreign currency, subject to payment of all taxes and other compulsory payments.
i Special jurisdiction
There are no separate courts or tribunals that deal with project finance transactions or construction contracts. Unless expressly agreed otherwise, the construction and financing disputes may fall under the jurisdiction of local economic courts.
The Investment Law establishes the particular order in which dispute resolution related to foreign investments must be completed. A dispute must be resolved in the following order:
- negotiation: parties must settle the dispute by conducting mutual negotiations;
- mediation: if the negotiations did not lead to a consensus, the dispute should be resolved by mediation;
- resorting to a national relevant court of Uzbekistan: when mediation did not lead to dispute settlement, it must be filed to a relevant national court; and
- arbitration: only if it has been impossible to follow the order stipulated above, the parties may refer to international arbitration, subject to the existence of a valid arbitration clause.
ii Arbitration and ADR
In large-scale government projects, especially those with participation of IFIs and foreign banks, the preference is generally for international arbitration. Unless there is a requirement to try mediation prior to arbitration, parties rarely refer to mediation for resolving huge construction or financing disputes. Except for cases where the matte falls under the exclusive competence of local courts (e.g., disputes related to privatisation or in respect of immovable property located in Uzbekistan), parties usually refer to internationally recognised arbitral institutions, such as the London Court of International Arbitration,24 the International Chamber of Commerce25 and the Stockholm Chamber of Commerce.26
Uzbekistan is a party to both the ICSID Convention and the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). Although the adoption of the Law on International Commercial Arbitration has provided an additional legal basis for recognition and enforcement of arbitral awards, and court practice shows that awards are being enforced more often, there are still cases when recognition and enforcement are rejected due to non-compliance with procedural requirements.
Outlook and conclusions
Uzbekistan continues to introduce changes to a wide variety of sectors. To keep up with socio-economic developments, the state bodies are actively working on reforming the legislation to incorporate sophisticated arrangements. The number of project finance and PPP projects is expected to increase steadily. Uzbekistan is committed to improving its investment attractiveness by addressing the concerns of businesses in the country.
1 Shukhrat Yunusov is a partner, Asol Iskhaeva is a junior associate and Latofat Rakhmanova is a paralegal at Dentons Tashkent.
2 World Bank, Doing Business 2020, Ease of doing business ranking.