Yan Kalish, counsel at Dispute Resolution Practice at Rybalkin, Gortsunyan, Dyakin and Partners (RGD), commented on an order of the Supreme Court of Uzbekistan which has enforced a Russian Arbitration Centre (RAC) award favoring pipeline manufacturer Zagorsk Pipe Plant. His comments were published in an article by Global Arbitration Review.

Zagorsk Pipe Plant won the RAC award against Uzbekneftegaz (UNG), a holding company for Uzbekistan’s energy industry, in October 2022. The Russian company was awarded 13 million US dollars over debts due under an assignment agreement, plus interest and costs. According to UNG, Zagorsk requested payment of the award via Gazprombank – an affiliate of Russia’s majority state-owned energy company Gazprom and one of the main channels for payments for Russian oil and gas. Because of sanctions, the bank stopped processing US dollar transactions after JPMorgan Chase Bank and Bank of New York Mellon terminated their accounts.

The top Uzbek court upheld and enforced the arbitration award in favor of Zagorsk Pipe Plant and ordered UNG to pay costs.

Yan Kalish, who is on the reserve panel of arbitrators at the Tashkent International Arbitration Centre, said the Supreme Court’s reasoning is indicative of the Uzbek courts’ “lack of sympathy towards ill-founded public policy defenses.” He said the decision exemplifies an “arbitration-friendly approach” developed in Uzbekistan in the last few years.

Gazprom has defended multiple arbitrations over its demands that European importers pay for gas in rubles via special accounts at Gazprombank.

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