Practice of Commercial Arbitration and Recognition and Enforcement of Foreign Arbitral Awards Concerning Disputes in Uzbekistan: A Comparison with Germany A Thesis Submitted in Fulfilment of the Requirements for the Degree of Doctor of Law (Dr. iur.), submitted by Zebiniso Khalilova Bremen 2020 Diese Veröffentlichung lag dem Promotionsausschuss Dr. iur. der Universität Bremen als Dissertation vor. 1. Gutachter: Prof. Dr. Josef Falke 2. Gutachter: Prof. Dr. Christoph Schmid Das Kolloquium fand am 09.07.2020 statt. ii Abstract The successful development of International Commercial Arbitration and its institutional significance in the system of International Economic Relations show that the role of the International Commercial Arbitration is increasing steadily in the era of globalization. In recent years, leading international arbitration institutions acknowledge the rapid growth of arbitration cases involving the countries of the former Soviet Union including the Republic of Uzbekistan. The Uzbek legal framework has significantly improved because of the new legal reforms in the sphere of arbitration. In order to develop a more arbitration-friendly climate in the country, Uzbekistan should initiate more cooperation and communications in the field of International Commercial Arbitration with European countries, since these countries are known with the widest range of sophistication and experience of arbitration. Taking this into account, the author of this dissertation tries to make a comparison of the arbitration regimes of Uzbekistan and Germany, while Germany as Europe’s leading economy, has a long-standing tradition as an arbitration-friendly jurisdiction providing for modern and internationally accepted rules. It should also be noted that the German courts, in contrast with the Uzbek courts recognize and enforce foreign arbitral awards and protect the principle of finality of the arbitral award. In this regard this thesis aims at analysing the hurdles and difficulties relating to recognition and enforcement of foreign arbitral awards in the Republic of Uzbekistan and evaluating the effectiveness of the country’s legal framework concerning this procedure. Today most countries of the world recognize the final and binding force of international arbitral awards, and the recognition and enforcement of these awards is a central element for successful arbitration. This study explores the conflicts of legal cultures and systems apparent during enforcement proceedings of foreign arbitral awards in both countries. The New York Convention of 1958, the most significant reason for the success of International Commercial Arbitration, applies to the recognition and enforcement of foreign arbitral awards in more than 150 states in the world. Despite the fact that the New York Convention has facilitated enforcement of arbitral awards, it has not resolved all the issues, which create difficulties for the domestic courts of the signatories of the Convention in recognizing and enforcing of foreign arbitral awards. Therefore, some countries like Germany adopted some rules that are not contained in the New York Convention, e.g. the NYC leaves some space for review of foreign arbitral awards on the grounds of public policy of the state. These issues will be analysed in this study as well. iii Acknowledgements First of all I would like to thank God for providing me the opportunity to complete my doctoral dissertation. I am very grateful to my supervisor Professor Dr. Josef Falke for his invaluable encouragement, advice and assistance throughout my long Ph.D. journey. Without his support the accomplishment of this dissertation would not have been possible. He taught me a lot. Great thanks go to the staff of the Faculty of Law of Bremen University. I am fully indebted to my sister Mehriniso and my parents who supported me during my Ph.D. studies in Germany. My special thanks go to the staff of the Library of Max-Planck Institute for Comparative and International Private Law and the Department “Russia and other CIS countries” for useful sources gathered for my doctoral thesis. I am sincerely thankful to my professors from the University of World Economy and Diplomacy in Tashkent (Uzbekistan) and all my friends who studied there. Further, I am particularly grateful to the Konrad Adenauer Foundation for the financial support for my Ph.D project. I also take this opportunity to thank the arbitrator of the Chamber of Commerce and Industry of Uzbekistan (Bukhara Department) Mr. Isaakov and the arbitrators of the Association of Arbitration Courts of Uzbekistan (Bukhara Department) Mr. Makhmudov and Mr. Shavkat Ashrapovich for sparing time for the interviews held in 2014-2016. I wish to say thanks to the judge of Bukhara Civil Court Mr. Norov for giving me precious information regarding my Ph.D. thesis. I very appreciate his knowledge. I also wish to thank Mrs. Mustafayeva and other lawyers of State Notary Office No 3 in Bukhara. I should also express my sincere gratitude to German specialists in the field of arbitration, particularly, to Dr. Lars Figura and Dr. Karsten, members of the staff of PricewaterhouseCoopers GmbH in Bremen. Finally, I would also to thank all my friends for their love. Especially , I owe special thanks to my friend Martin from Germany who has provided me countless inspiration and motivation in the final phase of my Ph.D. journey. This is the list of gratitude which is endless but thank you all who were there for me. iv Table of Contents Abstract iii Acknowledgements iv Table of Contents v List of Tables x Abbreviations xi Introduction 1 1. Foreword 1 2. Scope of the dissertation 3 3. Structure of the thesis 4 4. Research questions 5 5. Methodology of the research 6 6. Data collection 7 7. Originality of the research and its contribution to the existing literature 7 CHAPTER I: HISTORICAL DEVELOPMENT OF ARBITRATION 9 § 1 Historical development of arbitration in Uzbekistan 9 1.1. “Avesta” as an historical root of arbitration 9 1.2. Arbitration in the pre-Islamic period 11 1.3. Arbitration under Islamic Jurisprudence and the four Schools of Sharia 12 1.3.1. The Hanafi School 15 1.3.2. The Shafi School 16 1.3.3. The Hanbali School 16 1.3.4. The Maliki School 17 1.4. Islam and Islamic Law after the Arab invasion of Central Asia 17 1.5. Central Asian Customary Law and Islamic Sharia 19 1.5.1. “Hiylah” (legal rule) – as an alternate form of reasoning 20 1.5.2. Central Asian Muslim leaders’ role in the resolution of disputes 21 1.6. Development of commercial arbitration in the USSR 24 1.6.1. Statutes on arbitration (1920s – 1980s) 25 1.6.2. Treaties under the Soviet regime 28 1.7. Arbitration after the independence of Uzbekistan 29 § 2 The role of Uzbek Arbitration Institutions in the development of Arbitration in Uzbekistan 31 2.1. Center for the Study of Legal Problems 31 2.2. Arbitration Courts 32 2.3. Arbitration Courts at the Chamber of Commerce and Industry of the Republic of Uzbekistan 33 2.4. Association of Arbitration Courts 35 2.5. International Commercial Arbitration Court (ICAC) at the Chamber of Commerce and Industry of Uzbekistan 39 2.5.1. The creation of the ICAC 39 2.5.2. The ICAC presidium 41 2.5.3. The chairman of the ICAC 41 2.5.4. The arbitrators of the ICAC 42 v 2.5.5. The secretariat of the ICAC 42 2.5.6. The costs of arbitration 42 2.5.7. Need for a Special Law on International Commercial Arbitration 43 2.6. Tashkent International Arbitration Center 43 2.7. The TIAC Court of Arbitration 44 § 3 Perspectives of the Rule of Law in Uzbekistan 44 3.1. Reforms in the judicial system 45 3.2. Developments in the Human Rights Dialogue 51 3.3. Implementation of international legal standards 54 § 4 Historical development of arbitration in Germany 55 4.1. Historical background of arbitration 55 4.2. German Arbitration Institutions 60 4.2.1. German Institution of Arbitration (Deutsche Institution für Schiedsgerichtsbarkeit – “DIS”) 61 4.2.2. Frankfurt International Arbitration Centre 65 4.2.3. Other German Arbitration Organizations 66 4.2.3.1. Arbitration Court of the Hamburg Chamber of Commerce 66 4.2.3.2. German Maritime Arbitration Association (GMAA) 66 § 5 Summary 67 CHAPTER II: GENERAL PRINCIPLES AND THE LEGAL FRAMEWORK FOR THE RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS 71 § 1 General principles concerning recognition and enforcement of foreign arbitral awards 71 1.1. Definition of the terms “recognition” and “enforcement” 71 1.1.1. Definition of the terms “recognition” and “enforcement” in German Law 71 1.1.2. Definition of the terms “recognition” and “enforcement” in Uzbek Law 73 1.2. Definition of “foreign award” 74 1.2.1. Definition of “foreign award” in German Law 74 1.2.2. Definition of “foreign award” in Uzbek Law 75 1.3. Types of awards 76 1.3.1. Interim award 76 1.3.2. Partial award 77 1.3.3. Final award 77 1.4. A comparison between the German and the Uzbek legal terminology concerning commercial arbitration 78 § 2 International Conventions 80 2.1. The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention from 1958) 80 2.1.1. Germany as a signatory to the New York Convention 80 2.1.2. Uzbekistan as a signatory to the New York Convention 82 2.2. UNCITRAL Model Law on International Commercial Arbitration of 1985 82 2.2.1. German provisions and the Model Law 83 2.2.2. Uzbek Law and the Model Law 84 2.3. Other International Arbitration Conventions 84 vi 2.3.1. European Convention on International Commercial Arbitration of 1961 85 2.3.2. ICSID Convention of 1965 85 2.3.3.