Uzbekistan's New Bilateral Investment Treaty Standpoint: In Case of Uzbekistan-Turkey bit (2018) by F. Muminov and J. Górski About tdm tdm

like circumstances is still unclear. The 
application of non-discrimination standards requires “abstract legal reasoning and involve a 
measure of subjective assessment”. For this reason, the comparison process in the context of a 
non-discrimination clause contains a degree of uncertainty which in turn creates policy space 
for the host country.
14
 
It is noteworthy that the scope of the MFN also extends to investor-state dispute settlement 
clause (ISDS) set forth in art 4(3) of the Uzbekistan –Turkey BIT. That means that higher 
protection standards found in BITs concluded with third states, including some ISDS elements, 
could be applied to disputes arising under the Uzbekistan –Turkey BIT. It is often debated in 
practice of international investment arbitration whether the MFN can be applicable to 
procedural rights or not. The MFN even happens to be considered a Trojan horse because of 
its uncertain scope of application.
15
It is therefore of no surprise that that although investment 
tribunals in a few cases transplanted procedural rights based on MFN,
16
 most of the tribunals 
subjected the possibility of such MFN-transplants to strict requirements. 
Furthermore, Uzbekistan has separate laws for local and foreign investors.
17
Separate laws 
often carry some level of discrimination. However, it is clear that current Uzbek laws provide 
more favorable conditions for foreign investors than for domestic ones. By way of digression, 
one could strongly argue that investment law should not create such different standards of 
treatment for foreign and domestic investors. It is true that host countries often elaborate 
protection of foreign investment by adopting clear legislative guarantees. However, such 
14
Orellena Marcos, ‘Investment Agreement and Sustainable Development: The Non-discrimination Standards’, 
11 Sustainable Development Law and Policy 3 (2011), 3.
15
Yannik Radi, ‘The Application of Most Favored Nation Clause to the Dispute Settlement Provision of Bilateral 
ınvestment Treaties: Domesticating the “Trojan Horse” (2007) 18 European Journal of International Law 757-
774, 758. 
16
For example, Emilio Agustín Maffezini v. The Kingdom of Spain, ICSID Case No. ARB/97/7 and 
Siemens A.G. v. The Argentine Republic, ICSID Case No. ARB/02/8. 
17
Domestic investors are regulated by The Law of the Republic of Uzbekistan Guarantees of Freedom of 
Entrepreneurship (2 May 2000) as amended by Law No. 328 of the year 2012 
 accessed 5 April 2018. 

---

6 
additional guarantees do not yet mean that host countries are culpable of reverse discrimination 
against domestic investors.
18
The non-discrimination clause, in particular the NT, can be seen as a sensible solution to the 
risk of ever-expanding administrative controls of foreign investment by host countries over 
time. The non-discrimination clause is meant to provide predictable and transparent FDI regime 
to foreign investors. However, non-discrimination clauses may also repulse the foreign investor 
where the domestic standards themselves are not predictable. With unstable domestic standard 
in place, the host country could well take tough measures against domestic investors, and this 
may be extended to foreign investors in the case that the non-discrimination clause should 
contain other treatment of standards (such as fair and equitable treatment).
19
2.3. Protection of the Foreign Investor from Expropriation 
Protection of foreign investment against expropriation is an indispensable part of modern 
investment treaties. A prevalent standard in investment treaties is that the host country will not 
expropriate investors except for public purposes and on a non-discriminatory basis, in 
accordance with the law and procedure, and provided the state guarantees payment of adequate 
and effective compensations.
20
To this end, art 6(1) of the Uzbekistan-Turkey BIT states that: 
“investments shall not be expropriated, nationalized or subject, directly or indirectly to 
measures of similar effects except for a public purpose, in a non-discriminatory manner, 
upon payment of prompt adequate and effective compensation, and in accordance with 
due process of law and the general principles of treatment provided for in Article 3 of 
this Agreement.” 
The Uzbekistan-Turkey BIT encompasses direct and indirect expropriation. It also includes 
basic principles of expropriation, in particular, public purpose, non-discrimination, adequate 
and effective compensation, and