The recently concluded Uzbek Arbitration Week was organized by the newly established Tashkent International Arbitration Centre (TIAC) to create awareness about its rules and its functioning, and how it can offer world class dispute resolution services to its customers.
Formation of Tashkent International Arbitration Centre (TIAC) is in line with the slew of measures taken by the Government of Uzbekistan in recent times to modify its legal framework and make it an arbitration-friendly nation. Uzbekistan a few years back did not have a robust framework to deal with international commercial arbitration. Uzbekistan government has introduced the Economic Procedural Code (EPC) on 1 April 2018, to exclusively deal with commercial matters. Economic courts under EPC have the jurisdiction to, amongst other things, recognize and enforce foreign judgments and awards. Uzbekistan has also recently adopted the Law on International Commercial Arbitration, which is based on the UNCITRAL Model Law and has the jurisdiction to deal with commercial disputes arising from contractual as well as non-contractual relations.
There are several aspects which work in favour of TIAC. The TIAC Rules, which have come into force from 1 April 2019, are an amalgamation of the rules of popular arbitral institutions such as SIAC, LCIA and HKIAC. TIAC Rules incorporate some of the novel features of arbitral institutional rules such as emergency arbitration, which, in India, received considerable attention in view of the recent SIAC emergency award in the dispute between Amazon and the Biyani Group.
Certain incentives have been offered by TIAC in order to make it an attractive choice for international arbitrations, a few of which are –
- No administrative fee is charged.
- Foreign TIAC arbitrators are exempt from income tax, while local arbitrators are not.
- No work permits are required for foreign arbitrators and experts to serve the case administered by the TIAC.
- Parties' representatives in cases administered by the TIAC who perform their duties in national courts at the set-aside and/or enforcement procedure are not required to be qualified Uzbek lawyers.
- Parties' expenses for administration fees are exempt from VAT (only for cases administered by the TIAC).
- TIAC has been allocated separate premises, receiving telecom facilities and high-speed internet at low tariffs as well as is being granted customs relief.
TIAC is an autonomous body with no affiliation or sponsorship from any government body or private corporation. This ensures impartiality and independence of the Centre. TIAC Rules also ensure that members of TIAC Court are not appointed as arbitrators in TIAC arbitration. Apart from having a robust and diverse panel of international arbitrators that have dealt with myriad types of arbitrations including commercial and investor-state arbitrations, TIAC also has a special panel of arbitrators for sports arbitration.
Comparisons with the Indian Arbitration Regime
The efforts of the Government of Uzbekistan to make it an arbitration friendly nation coincide with the similar efforts being put in by the Government of India. The amendments made in 2015 and 2019, amongst other things, introduced strict timelines in respect of completion of pleadings and passing of an arbitral award. India has also introduced the Fourth Schedule to set a cap on arbitral fee. These amendments have changed the manner in which arbitrations used to be conducted in India. There are several popular arbitral institutions in India such as Delhi International Arbitration Centre, Mumbai Centre for International Arbitration and Nani Palkhiwala Arbitration Centre. These arbitral institutions have elaborate rules describing the procedure for resolution of disputes, including emergency arbitration provisions.
In order to provide world-class facilities as well as incentivize dispute resolution through arbitration to propel India as a favoured arbitration destination in the global arena, and instill greater confidence in foreign investors for getting their disputes resolved through arbitration in India, the Indian government developed the New Delhi International Arbitration Centre Act, 2019, to establish New Delhi International Arbitration Centre ("NDIAC"), which will replace the current International Centre for Alternate Dispute Resolution.
The Indian Government has declared NDIAC as an institute of national importance and its intention is to develop NDIAC into an arbitration hub. The Indian Government also introduced several amendments to Arbitration and Conciliation Act, 1996 in the year 2019 to make a thrust towards institutional arbitration by introducing provisions for appointment of arbitrators by arbitral institutions and conduct of arbitration by such institutions. The amendments also include provisions establishing the Arbitration Council of India. The Council will be the governing body in arbitration and will have various functions such (a) framing policies governing the grading of arbitral institutions; (b) recognizing professional institutes providing accreditation of arbitrators; (c) reviewing the grading of arbitral institutions and arbitrators; (d) holding training, workshops and courses in the area of arbitration in collaboration of law firms, law universities and arbitral institutes; (e) framing, reviewing and updating norms to ensure satisfactory level of arbitration and conciliation. Though the government has to take steps to implement the New Delhi Indian Arbitration Centre Act, 2019, and the aforesaid amendments, they show the intent of the government to bring in institutional arbitration in India in a big way.
The proximity and consequently, the time difference between India and Uzbekistan is only of 30 minutes, which will enable the Indian parties as well as lawyers to travel, to hold virtual hearings and to coordinate with TIAC.
Despite the several advantages of TIAC as mentioned above, an issue which comes up is the different systems of law being followed in India and Uzbekistan. India follows common law while Uzbekistan follows civil law. Indians are not accustomed with civil law and this creates apprehension regarding issues such as interference of courts in arbitration, their approach towards arbitration and handling of arbitration related matters, and enforcement of awards.
Arbitral institutions around the world are playing an important role in assisting parties in getting their disputes resolved effectively through arbitration and it is clear that both India and Uzbekistan are on the right path.
The article has been published in ET Insights.
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