A step toward an important reform to advance alternative dispute resolution in New Uzbekistan

On April 21, 2026, the Law “On introducing amendments and addenda to certain legislative acts of the Republic of Uzbekistan in connection with improving the activities of arbitration courts and strengthening budget discipline” was adopted.

We spoke with Foziljon Otakhonov, a Doctor of Law, Professor, and Arbitrator, about the essence and significance of the law.

– In New Uzbekistan, the development of alternative dispute resolution mechanisms has become one of the key areas of the state’s legal policy.

Arbitration courts are emerging as an important tool for the prompt and effective protection of the rights of citizens and business entities.

The legal basis of this institution is enshrined in our Constitution, under which everyone has the right to protect their rights by any means not prohibited by law.

– Which law established the legal basis for arbitration courts?

– The Law “On arbitration courts”, adopted in 2006, established the legal basis for this institution. It clearly defines the status of arbitration courts, the principles of their operation, the procedure for arbitration proceedings, arbitration agreements, and the requirements for arbitrators. This law played an important role in shaping arbitration courts as a non-state institution and in introducing a mechanism for the alternative resolution of economic disputes.

– What problems have been observed in this area in recent years?

– Analyses of practice have shown that, in some cases, the powers of arbitration courts were used in a manner contrary to the law. In particular, cases were identified in which arbitration courts considered disputes involving organizations with state participation and disputes over public procurement contracts.

This had a negative impact on taxpayers’ interests. In addition, there was a significant increase in cases in which competent courts annulled arbitral awards. For example, economic courts annulled 7 arbitral awards in 2020, and by 2024, this figure had risen to 391.

– So, the new law was enacted to address these problems, right?

– The new law is intended to eliminate these problems. Its purpose is to align the activities of arbitration courts with international standards, protect state interests, and strengthen budget discipline.

The law supplemented the Code of Administrative Liability by adding Article 175-9. Under this article, officials are subject to a fine ranging from five to ten times the base calculation amount for unlawful establishment of arbitration courts, participation of state bodies, organizations and institutions, enterprises with state participation, and civil society institutions as parties to arbitration agreements, and unlawful voluntary enforcement of arbitral awards by these entities.

If these offenses are committed repeatedly within one year of an administrative penalty being imposed, officials will be subject to a fine ranging from 10 to 15 times the base calculation amount.

This provision is an important legal safeguard that strengthens the legality and discipline of arbitration courts’ activities, ensures reliable protection of state interests, and prevents offenses.

– What specific amendments were introduced to the Law “On arbitration courts”?

– First, the legal status of arbitration courts was clarified in the legislation. In particular, the statute of a permanent arbitration court was defined as a local act approved by the non-governmental, nonprofit organization that established it.

At the same time, the term “legal entity” in the law was replaced with “non-governmental non-profit organization”, and the term “non-state body” was replaced with “non-state structure”.

These amendments further clarify the institutional status of arbitration courts.

It was established that state bodies, organizations and institutions, enterprises with state participation, and civil society institutions may not establish arbitration courts or be parties to arbitration agreements.

This provision is intended to keep arbitration proceedings primarily within the framework of private-law relations and to protect state interests.

Another important innovation is that the procedure for establishing permanent arbitration courts has been clarified. Such courts may now be established only by non-governmental, nonprofit organizations.

In this regard, a requirement has been introduced to approve the arbitration court’s rules and a list of at least three arbitrators, and an obligation has been established to submit documents establishing the court to the relevant justice body.

The law also introduced important restrictions on the jurisdiction of arbitration courts. In particular, it was established that disputes arising from administrative, family, and labor relations, land-related cases, disputes concerning the determination of ownership rights to buildings and structures, and cases related to the recovery of budget system funds may not be considered by arbitration courts.

In addition, special attention was paid to the professional training of arbitrators. They are now required to complete training courses through a special program approved by the Ministry of Justice and to improve their qualifications regularly. This will help ensure the quality of arbitration proceedings and the stability of arbitral awards.

The law was also supplemented with important provisions to prevent conflicts of interest. In particular, it was established that a person who served as an arbitrator in a specific arbitration proceeding may not subsequently act as a representative of the parties in the same case.

The procedure for appealing arbitral awards has also been expanded. Persons whose rights and obligations were determined by an award, but who were not parties to the case, may now apply to a competent court to seek the annulment of the arbitral award. This strengthens procedural fairness and judicial protections.

A provision was also introduced prohibiting state bodies, organizations and institutions, enterprises with state participation, and civil society institutions from voluntarily enforcing arbitral awards. This is an important safeguard that provides additional legal protection for state funds and interests.

– What measures have been implemented to strengthen budget discipline?

– The amendments to the Budget Code are intended to protect the state’s financial interests. From now on, authorized finance and treasury bodies will be required to participate in court cases involving the recovery of budget funds. In addition, the acceptance of goods and services under contracts not registered with the treasury has been prohibited.

An important change has also been made in the field of public procurement. The requirement to register public procurement contracts with the relevant treasury departments has been further strengthened.

– How do you assess the amendments to the procedural codes and, in general, the reforms in this area?

– The amendments to the Civil and Economic Procedural Codes strengthen guarantees of judicial protection. For example, the provision that a judge who participated in arbitration proceedings may not subsequently act as a representative in the same case helps prevent conflicts of interest.

Persons who did not participate in the case but whose rights and obligations were affected were also granted the right to appeal arbitral awards. This is important for ensuring procedural fairness.

This law has become an important step in developing the arbitration court system and adapting it to modern requirements.

The law will, in practice, ensure the legal guarantees enshrined in the Constitution, protect the rights of citizens and business entities, and strengthen the state’s financial interests. In this regard, the law can be assessed as an important reform aimed at developing the alternative dispute resolution system in New Uzbekistan.

We remind readers that this law will take effect on July 24, 2026.

Interviewed by Norgul Abduraimova, UzA