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PARTY AUTONOMY AND JURISDICTION IN INVESTMENT DISPUTES: A
COMPARATIVE STUDY OF THE EUROPEAN UNION AND THE REPUBLIC OF
UZBEKISTAN
Madina Eseniyazova
PhD researcher at Tashkent State University of Law
Lawyer at “Custodio” Law firm
Abstract
: This article explores the scope and limitations of party autonomy in investment
disputes through the lens of private international law (PIL). It offers a comparative analysis of the
European Union and the Republic of Uzbekistan, examining how each jurisdiction conceptualizes
international jurisdiction in investor–State arbitration. While the EU has increasingly restricted
arbitral autonomy through the Achmea and Komstroy rulings, Uzbekistan maintains a more
liberal and investor-friendly approach. The article evaluates the legal, institutional, and policy
implications of these divergent models, proposing a balanced framework that reconciles investor
expectations with national legal sovereignty under PIL principles.
Keywords
: Party Autonomy, investment arbitration, private international law, jurisdiction,
European Union, Uzbekistan, Achmea, Enforcement of Awards, Forum selection.
The evolution of transnational investment law has placed increasing pressure on traditional
jurisdictional concepts rooted in private international law (PIL). At the heart of this tension lies
the principle of party autonomy, which under PIL allows parties to select the competent forum for
resolving disputes. While this principle is a cornerstone of commercial arbitration, its application
in the context of investment disputes governed by a network of bilateral and multilateral treaties is
far from straightforward.
In the European Union, recent jurisprudence has significantly curtailed party autonomy in
investment arbitration, particularly through the landmark Achmea and Komstroy decisions, which
declared intra-EU investor–State arbitration incompatible with EU law. By contrast, the Republic
of Uzbekistan continues to expand and rely on broad jurisdictional clauses in its BITs, offering
foreign investors flexible pathways to arbitration. However, this openness is tempered by a lack of
clear domestic PIL doctrine and inconsistent judicial practices.
This article undertakes a comparative analysis of the treatment of party autonomy in investment
disputes in the EU and Uzbekistan. It examines how international jurisdiction is conceptualized
and constrained within each legal system and what implications this holds for legal certainty,
investor confidence, and systemic coherence.
1. Theoretical Background: Investment Arbitration in the PIL Framework
Investment arbitration operates at the intersection of public and private law. While investment
treaties (such as BITs or multilateral agreements like the Energy Charter Treaty) are instruments
of public international law, they create rights that are invoked by private actors—investors—
against sovereign states. The procedural vehicle for enforcing these rights often resembles private
arbitration.
Private international law becomes relevant in several ways: first, through determining the
applicable procedural law (lex arbitri), second, in recognizing and enforcing foreign arbitral
awards, and third, in defining the scope of party autonomy in jurisdictional matters.
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In theory, party autonomy enables parties to choose between domestic courts and arbitration,
designate arbitral institutions or ad hoc mechanisms, and select seats of arbitration. However, in
practice, this autonomy is subject to mandatory rules, public policy exceptions (order public), and,
increasingly, political considerations.
2. Party Autonomy and Jurisdiction in the EU: Post-Achmea Constraints
The EU's legal system presents a unique supranational dimension that heavily influences
jurisdictional doctrine. The Court of Justice of the European Union (CJEU) in Slovak Republic v.
Achmea BV (Case C-284/16) held that arbitration clauses in intra-EU BITs are incompatible with
the autonomy of EU law. This position was reinforced in Komstroy v. Moldova (Case C-741/19),
where the CJEU extended the prohibition to intra-EU disputes under the Energy Charter Treaty.
The rationale behind these decisions lies in the EU’s insistence on the exclusive jurisdiction of its
judicial system to interpret and apply EU law. Investment arbitration, viewed as an external
mechanism, is seen as a threat to this legal autonomy. As a result, party autonomy is significantly
restricted: even if two parties wish to arbitrate under a treaty, the EU legal framework may
override their consent.
These developments have created legal uncertainty for investors and Member States alike. While
arbitral tribunals may continue to accept jurisdiction, national courts in the EU are increasingly
refusing to enforce awards rendered under intra-EU BITs. This raises profound questions about
the future role of PIL in investment disputes within the EU.
3. The Uzbek Approach: Expansive Autonomy Amid Institutional Weakness
Uzbekistan offers a stark contrast. As a country undergoing legal and economic transformation, it
maintains a network of over 50 BITs, most of which contain broad and investor-friendly dispute
resolution clauses, including consent to ICSID and UNCITRAL arbitration. The state’s legal
framework does not currently restrict party autonomy in the same way as the EU does.
Moreover, Uzbekistan is not part of a supranational legal system that could limit arbitral
jurisdiction. The Civil Procedure Code and Investment Law permit foreign investors to settle
disputes through arbitration, both institutional and ad hoc. In practice, however, enforcement of
arbitral awards remains inconsistent due to underdeveloped judicial capacity, limited
understanding of PIL principles, and occasional political interference.
Uzbek courts tend to apply the New York Convention relatively favorably, but challenges persist
in recognizing foreign arbitral awards where public policy or procedural irregularities are alleged.
The lack of a coherent domestic doctrine on order public international makes judicial outcomes
unpredictable.
While the Uzbek model appears more respectful of party autonomy, its effectiveness is
undermined by the absence of a robust legal infrastructure to support investor confidence and
ensure consistent enforcement of arbitral decisions.
4. Comparative Reflections and Future Prospects
The juxtaposition of the EU’s restrictive and Uzbekistan’s permissive approaches reveals a deeper
divergence in how jurisdiction is conceptualized within investment disputes. The EU prioritizes
systemic coherence and judicial control, often at the expense of investor flexibility. Uzbekistan,
meanwhile, promotes openness and investor autonomy but lacks institutional maturity to
guarantee legal certainty.
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From a PIL perspective, neither model is entirely satisfactory. The EU’s approach risks
undermining core principles of party autonomy and predictability in cross-border dispute
resolution. Uzbekistan’s approach, while formally supportive of autonomy, struggles with
practical implementation. A functional synthesis is needed—one that upholds the integrity of
national legal systems while maintaining the flexibility and neutrality of arbitration.
As investment law evolves toward multilateral reform (e.g., discussions around a Multilateral
Investment Court), the interaction with PIL must be reconsidered. Jurisdictional doctrines,
enforcement mechanisms, and party autonomy should be aligned not only with treaty objectives
but also with broader transnational legal principles.
Investment arbitration sits uneasily between the domains of public international law and private
international law. The comparative analysis of the EU and Uzbekistan demonstrates that the
treatment of party autonomy in investment disputes is deeply shaped by institutional frameworks,
legal culture, and judicial philosophy.
For Uzbekistan, aligning its domestic legal regime with PIL principles and enhancing judicial
capacity could improve the credibility and predictability of its dispute resolution system. For the
EU, rethinking the rigidity of its jurisdictional doctrine may be necessary to accommodate
legitimate expectations of foreign investors.
Ultimately, the future of party autonomy in investment disputes will depend on a delicate balance
between legal certainty, investor protection, and the sovereignty of national legal orders an
inherently private international law question.
References
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Schill, Stephan W.
The Multilateralization of International Investment Law
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Principles of International Investment Law
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CJEU,
Slowakische Republik v. Achmea BV
, Case C- 284/16, Judgment of 6 March 2018,
ECLI:EU:C:2018:158.
4.
CJEU,
Republic of Moldova v. Komstroy
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ECLI:EU:C:2021:655.
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