PROTECTING SINGAPOREAN INVESTMENTS IN UZBEKISTAN
- Elijah Putilin
- Jan 27
- 4 min read

With the new Investment Law on the horizon and the plans of Indorama Corporation to expand its investment portfolio in Uzbekistan this year, it is high time we revisited how Singaporean investors and their investments in that state are protected under the Bilateral Investment Treaty (BIT).
PROTECTED INVESTMENTS
Being a so-called old-generation investment treaty, the Singapore-Uzbekistan BIT follows an 'asset-based' approach to defining protected investments. To wit, BIT seeks to protect 'every kind of asset ... including ... movable and immovable property rights ... shares, stocks, debentures ... claims to money or to any performance conferred by law or under contract ... intellectual property rights [and] business concessions conferred by law, under contract or by administrative act of an authorized body' (BIT, Art. 1(1)).
However, similar to other investment treaties of the city-state, only investments that were 'specifically approved in writing by the competent body designated by the Contracting Party ... and upon such conditions as [the host-State] shall deem fit' could enjoy the treaty protection (BIT, Art. 2(1)).
Although this provision may mitigate a dispute as to whether a certain asset possesses the characteristics of an investment: duration, assumption of risk, commitment of capital, to be covered by the treaty (see e.g. Romak v. Uzbekistan (UNCITRAL, PCA Case No. AA280), it might lead to other jurisdictional hurdles an investor should be prepared to overcome when bringing a claim against a host-State:
Was a host-State's authority approving the investment a 'competent' and a 'designated' body within the meaning of the BIT, as the treaty does not specify one?
If indeed it was, did such body grant the approval in accordance with the host-State's laws, including, inter alia, whether a particular person within such body was authorized to grant permission?
Assuming it did/he was, did the investor comply with all the conditions for granting the approval? Did the investor have to comply with such conditions if such conditions were arbitrary and/or discriminatory?
Is approval of the competent and designated body of a host-State required for investments made prior to the BIT's entering into force? Although the BIT does apply to investments made before it entered into force (i.e., 23 November 2003) (Art. 2(2)), the BIT does not address this issue, unlike the Singapore-Indonesia BIT that contains the same approval requirement.
Finally, can investors bypass the in-writing approval requirement altogether by relying on the most-favoured nation clause found in the BIT, Art. 4?
As the old Roman saying goes: 'if you want peace, prepare for war'.
What can/should a Singaporean investor do to ensure its investments in Uzbekistan are protected?
It depends, but at the very least:
conduct due diligence to ascertain the authority of an approving body and a person acting on its behalf, as well as compliance of the approval process as such with the requirements of Uzbek law;
should the approval be conditional - preserve all evidence related to the completion of such conditions;
for investments made in the territory of Uzbekistan before 23 November 2003, it may be advisable to seek a post-admission approval and/or investment-specific commitments from the host-State.
PROTECTED INVESTORS
The personal scope of the BIT includes citizens of either State or companies 'incorporated or constituted under the law in force of either of the Contracting Parties'. Unlike some modern investment treaties, the BIT does not address any issues related to investors' dual nationals, permanent residents, and/or foreign companies that are controlled by nationals of a host State. This seems to be a perfect recipe for disputes as to the tribunal's jurisdiction ratione personae (see e.g., Tokios Tokelės v. Ukraine (ICSID Case ARB/02/18)).
PROTECTIONS GUARANTEED
Fair & Equitable Treatment (FET)
The protected investments shall enjoy 'fair and equitable treatment [FET] and protection'. In contrast to modern bilateral investment treaties (see e.g., Uzbekistan-Turkey BIT), the FET clause in the BIT is not qualified, granting tribunals wide discretion in defining the standard's meaning.
No National Treatment
The treaty does not guarantee national treatment to investors and their investments, but Uzbekistan's investment legislation does. According to BIT, Art. 15, the domestic legislation in that part shall arguably prevail over the treaty provisions.
Most-Favoured-Nation (MFN) Treatment
The BIT, Art. 4 requires the Contracting Parties to provide 'treatment no less favorable' than that they accord to investors and investments from any third State, subject to the standard exceptions. The MFN clause is silent as to whether it applies to substantive protections only or covers the ISDS provisions too, again leaving this issue to arbitrators (see e.g., Maffezini v Spain (ICSID Case ARB/97/7)).
The MFN standard also applies as regards 'restitution, indemnification, compensation or other settlement', should the foreign investments in the territory of a Contracting Party suffer from war, armed conflict, a state of national emergency, revolt, insurrection or riot (BIT, Art. 7).
Guarantees Against Expropriation
The treaty protects Singaporean investors and their assets in Uzbekistan against expropriation or 'measures having effect equivalent to' expropriation (i.e., indirect expropriation) requiring a host-State to not take such measures unless they are for legitimate purposes, non-discriminatory and 'against compensation', being 'the value immediately before expropriation' (Art. 6).
Non-Precluded Measures
When assessing the claim's prospects, investors should be mindful of the BIT's article 11 safeguarding the Contracting Parties' right to regulate and carving out measures 'directed to the protection of ... essential security interests ... public health or prevention of diseases and pests in animals or plants' from the BIT's scope.
INVESTOR-STATE DISPUTE SETTLEMENT (ISDS)
The BIT's ISDS provisions are fairly standard: they neither contain a 'fork-in-the-road' clause nor require an investor to exhaust local remedies. Note, however, that the treaty expressly bars claims 'with respect to any act or fact that took place or any situation that ceases to exist' before the BIT entered into force.
According to the BIT, any dispute 'in connection with investment' shall, as far as possible, be settled through negotiations. If the dispute cannot be resolved within 6 months from the date any party gave a notice of intention to negotiate, any party may request the dispute to be submitted to conciliation or arbitration under the ICSID Convention which Uzbekistan and Singapore are parties to.