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Fair and Equitable Treatment Clauses in Uzbekistan's Investment Treaties: Protecting International Investors' Interests
Fair and Equitable Treatment Clauses in Uzbekistan's Investment Treaties: Protecting International Investors' Interests
Fair and equitable treatment (FET) clauses in Uzbekistan's investment treaties: what function do they play? Can FET clauses in post-Soviet nations like Uzbekistan safeguard the interests of international investors? To preserve reasonable expectations under the FET clauses of bilateral investment treaties (BITs), the author provides an overview of the relevant literature and a synopsis of case law. The author also gives a summary of reasonable expectations found in domestic laws and regulations, emphasizing how the stability of the regulatory legal framework plays a critical role in the post-establishment phase of investment. Using Uzbekistan as a case study, the study looks at how just and equal clauses in regional foreign direct investment (FDI) laws and regulations contribute to reasonable expectations. The chapter attempts to address issues like raising awareness of reasonable, legitimate expectations in the legal system of the host country, figuring out what kind of legitimate expectations work best in Uzbekistan, and comprehending how participants in the investment environment view legitimate expectations.
When evaluating whether an investor may properly create a valid expectation of the immutability of a certain law, legitimate expectations play a critical role in investment arbitration. Tribunals have underscored the need for precise and definite guarantees from authorized authorities in recent judgments, taking into account diverse situations and the policy objectives of the state. General laws and investment treaties are not a protection against modifications to the legal and economic structures of the host state. The limits of indirect legitimate expectations, which might be based on the legal framework of the host state, have been established through the use of indirect legitimate exception frameworks. States in Uzbekistan possess the authority to modify laws and regulations; nevertheless, any modifications must adhere to particular standards about the investment regulatory structure.
Uzbekistan's Investment Law was ratified in December 2019 to enhance the nation's investment environment. The law defines the duties of a corporate ombudsman and creates the Investment Promotion Agency, a one-stop shop for investors. A multi-tiered dispute settlement mechanism for investor-state problems resulting from investments is also established under the statute. A major factor in setting realistic expectations and luring FDI to the host nation is the local investment framework and international investment agreements. Uzbekistan has ratified 54 bilateral investment treaties (BITs) since 1991; richer nations offer somewhat better levels of investment protection than underdeveloped nations. A crucial component of the BIT reform is the Foreign Exchange Trade (FET) standard, which aims to safeguard foreign investors from government malfeasance and promote sound governance in the host countries. However, because fairness and equity are subjective concepts, it is still unclear exactly what FET means.
The investigation focuses on three ideas of reasonable expectations, which are classified, and how investors and government officials in Uzbekistan perceive these ideas. Investors anticipate contractual obligations, stability, and predictability in rules, explicit pledges, and transparency. Since rules and regulations are promptly publicized in local languages, transparency is crucial for investors. Special economic zones (SEZs) usually offer specific commitments in the form of reduced tariffs and taxes. Investors favour local dispute resolution processes because they are less expensive than sending matters to international arbitration. Investors use caution to ensure they do not breach the terms of the principal operating license that they have been issued by the regulator since regulations are anticipated to stay steady and predictable. Contractual obligations are honoured, and investors have to weigh financial risks and acknowledge governmental authority. The focus group talks provided insight into how these ideas function in the host nation's corporate context.
The research addresses the three main categories of expectations that company owners and investors have in a nation: certainty, voluntary, and dependence on promises. According to the findings, investors should rely on promises and assurances from the state, and future BIT models from the host countries have to make mention of international law. The report also argues that a state's obligations need to be codified into law and that government officials ought to be informed about the results of reasonable expectation cases in international investment arbitration forums. The report also recommends that when providing investment possibilities, the state gives precedence to particular industries and creates rules for presenting the investment climate and creating explicit legal expectations. Directly reasonable expectations should be generated based on the outcomes of arbitration disputes.
- FET clauses in BITs aim to safeguard international investors' reasonable expectations.
- Uzbekistan's 2019 Investment Law enhances investor protection and dispute resolution.
- Investors value contractual stability, transparency, and adherence to promises.
