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  • Uzbekistan And Kazakhstan International Disputes: The Role Of London-Based Arbitration In 2025

    Uzbekistan And Kazakhstan International Disputes: The Role Of London-Based Arbitration In 2025

    Cross-border commercial disputes involving Uzbekistan and Kazakhstan increasingly call for the strategic use of international arbitration. Both countries have modernised their legal systems to attract investors and offer transparent and efficient dispute resolution options. Yet, many large-scale disputes still look to London as the trusted seat or court for complex, high-value cases.

    In this article, I examine the latest arbitration developments in Uzbekistan and Kazakhstan, common dispute types, and London’s continued place in resolving complex international disputes erupting within Central Asia.

    Arbitration Reform and Institutional Growth in Uzbekistan and Kazakhstan

    Both Uzbekistan and Kazakhstan have made major advances in arbitration reform in recent years, aiming to align with international standards and enhance investor confidence.

    Uzbekistan Arbitration Reforms

    The Astana International Financial Centre (AIFC) is Kazakhstan’s flagship financial centre in Astana, operating under a distinctive legal framework, with English as the primary language. Modelled on the English common law system, with an independent AIFC Court and International Arbitration Centre, the AIFC aims to position Astana as a regional gateway for capital and investment across Central Asia.

    The AIFC Court has produced 205 judgments in its history with 100% enforcement rate.

    The Tashkent International Arbitration Centre (TIAC), established in 2018, has quickly gained international recognition. By early 2025, its caseload had tripled compared to the previous year, with disputes involving parties from Europe, the Middle East, China, and South Asia. TIAC now handles a wide range of cases, including commercial contracts, joint ventures, and technology disputes such as blockchain.

    In addition, the proposed Tashkent International Commercial Court (TICC) will create an opportunity for foreign investors to apply to the courts in Uzbekistan on the basis of international common law.

    Common Disputes in Uzbekistan and Kazakhstan Arbitration

    Arbitration cases in Central Asia are often linked to large-scale energy, mining, and construction projects.

    One of the largest examples is the Kashagan oilfield arbitration, involving KazMunayGas, Eni, Shell, ExxonMobil, TotalEnergies, CNPC, and INPEX. The dispute, seated in Geneva under the Permanent Court of Arbitration (PCA), concerns claims exceeding $150 billion and is expected to continue until 2028. Kazakhstan is also pursuing related domestic proceedings, highlighting the interplay between international arbitration and local enforcement.

    Similarly, the Karachaganak gas-condensate dispute before the Stockholm Chamber of Commerce (SCC) involves Shell, Eni, Chevron, and KazMunayGas. It centres on profit-sharing and cost recovery, illustrating the complexity of Kazakhstan arbitration and the need to coordinate international and domestic legal strategies.

    Why London Remains a Leading Arbitration Seat

    Although Tashkent and Astana arbitration centres are developing rapidly, London continues to often be the preferred choice for arbitration concerning high-value disputes.

    Older contracts often specify London, Geneva, or Stockholm as the seat of arbitration, reflecting long-standing trust in these established jurisdictions. London offers experienced and independent arbitrators and reliable enforcement under the New York Convention. These factors make London particularly attractive for energy and infrastructure disputes involving Uzbek and Kazakh entities.

    The Role of Chinese and Middle Eastern Investors

    The rise of Chinese and Middle Eastern investors in Central Asia is changing regional arbitration preferences. These investors often favour venues such as Dubai (DIAC), Singapore (SIAC), Hong Kong (HKIAC), and the Astana International Arbitration Centre (IAC).

    These arbitration seats frequently blend English law principles with regional rules and offer flexible dispute resolution mechanisms. For projects linked to China’s Belt and Road Initiative, mediation is often integrated into arbitration procedures.

    Wrapping up

    For small and medium international disputes, it is now possible to have them resolved in the region. However, London is still a highly relevant arbitration seat for complex, high-value international commercial disputes, especially those involving Russian sanctions, attempts to enforce Russian jurisdiction under Article 248.1 of the Russian Arbitrazh (Commercial) Procedural Code APC, and corresponding anti-suit injunctions.

    Frequently Asked Questions

    What arbitration institutions are active in Uzbekistan and Kazakhstan?

    Uzbekistan’s main institution is the Tashkent International Arbitration Centre (TIAC), while Kazakhstan’s key bodies are the AIFC Court and the International Arbitration Centre (IAC) in Astana.

    Why is London still the leading arbitration seat for Central Asia disputes?

    London offers neutrality, expert arbitrators, and strong enforcement under the New York Convention, making it ideal for Uzbekistan and Kazakhstan arbitration cases.

    How does the AIFC Court differ from Kazakhstan’s national courts?

    The AIFC Court applies English common law principles and operates entirely independently from Kazakhstan’s domestic judiciary.

    Which sectors generate the most arbitration cases in Central Asia?

    Energy, mining, and construction are the dominant industries, often involving complex, multi-party contracts.

    How do Chinese and Middle Eastern arbitration seats influence Central Asia dispute resolution?

    Venues such as Dubai, Singapore, and Hong Kong combine English law with regional practices, offering greater flexibility for investors and contractors operating across Central Asia.

    To discuss any points raised in this article, please call us on +44 (0) 203972 8469 or email us at mail@eldwicklaw.com.

    This article does not constitute legal advice. For further information, please contact our London office.

  • Can A Company Withhold  Documents From Investors In A Civil Fraud Claim?

    Can A Company Withhold  Documents From Investors In A Civil Fraud Claim?

    The High Court has ordered that Standard Chartered, the high-profile global bank, must hand over documents related to communications with US and Singaporean regulators. In doing so, it dismissed the company’s argument that it faced criminal prosecution if it disclosed the information to investors.

    Standard Chartered is currently embroiled in a £1.5 billion claim. Investors accused it of concealing critical information concerning sanctions breaches involving Iran. At issue were crucial regulatory disclosures and whether they were misleading or incomplete.

    Why does this matter? Because clear, accurate disclosure underpins investor rights, market integrity, and confidence in financial markets. Therefore, the ruling in Various Claimants v Standard Chartered PLC ordering disclosure provides clarity for investors in England and Wales who have investments in companies caught up in allegations of breaching UK, US, EU, or UN sanctions.

    Background: The Standard Chartered Sanctions Scandal

    Standard Chartered has made headlines in recent years for breaching Iran sanctions, prompting hefty fines from US and UK regulators. The bank was penalised for processing transactions that violated anti-money-laundering rules tied to Iranian interests. These incidents severely damaged its reputation and triggered internal regulatory overhauls.

    Between 2007 and 2019, StanChart issued investor communications, including prospectuses, that glossed over the real extent of its sanctions exposures. Those documents formed the backbone of investor expectations and are now the basis of legal claims.

    The Claimants and Their Allegations

    The claimants represent a coalition of more than 200 institutional investors, totalling around 1,400 funds. Their case is straightforward but far-reaching: they allege that Standard Chartered issued prospectuses and other disclosures that were untrue or misleading, failing to disclose regulatory breaches and thereby distorting investor understanding.

    The essence of the claim is based on “common reliance” or “fraud on the market” theory. In short, this doctrine provides that if a company makes a false or misleading statement that affects its share price, investors who bought or sold shares during that time can bring a civil claim against the company. Critically, the investors do not have to have read the documents containing the misleading statement themselves to claim reliance. What matters is that the misleading statement influenced the share value.

    Standard Chartered’s legal arguments

    Standard Chartered resisted disclosure at every turn, arguing that giving up certain documents would breach confidentiality duties and expose it to prosecution in the US and Singapore. Among the most sensitive materials were internal regulatory reports and communications with foreign authorities.

    The Civil Procedure Rules, Part 31, however, sets a firm test for disclosure. Documents are disclosable if they are relevant, in the party’s control, and not protected by privilege or confidentiality, such that non-disclosure would be just. The question for the court was – did legitimate privilege exist, or was this a shield against presenting inconvenient evidence?

    Judge Green’s Analysis and Ruling

    Judge Green delivered a firm answer. The asserted risk of prosecution abroad was found exaggerated, and there was no credible threat in the US or Singapore that could justify non-disclosure. The judge concluded that public policy favours disclosure in the interest of justice and the effective conduct of civil litigation.

    Ultimately, the court ordered full disclosure of the documents at issue, rejecting confidentiality claims in this context. The ruling underscores that confidentiality cannot be used to avoid presenting documents if, under the Civil Procedure Rules, transparency is clearly warranted.

    What does the decision in Various Claimants v Standard Chartered PLC mean in practice?

    This case marks a critical moment for common reliance or fraud on the market claims in England and Wales. Unlike the US, where such claims are well established, English courts have traditionally been cautious. The StanChart ruling gives new credibility to such claims, making them more viable and reinforcing investor protection.

    Previously, StanChart unsuccessfully attempted to strike out nearly half the claimants’ cases, which the court rejected. That decision showed the English courts’ willingness to allow such group claims to proceed.

    The potential liability for Standard Chartered is enormous, as a £1.5 billion claim is not merely symbolic. Prior fines and reputational damage leave the bank in a highly precarious position.

    The ruling sends a clear message to regulators and boards: transparency matters, and failure to secure it can result in both financial cost and erosion of market trust.

    What Happens Next?

    With disclosure ordered, the case moves into a crucial phase: reviewing the revealed documents, testing their impact, and preparing for trial. Standard Chartered may still seek an appeal, though its narrow window of confidentiality exception has been severely curtailed.

    Conclusion

    This case is a powerful reminder that transparency and accountability are not optional. The courts have taken a firm stand that excuses cannot justify withholding critical information in a civil fraud claim. For investors, it offers renewed hope that legal recourse remains alive where misstatements or omissions occur.

    FAQs

    What is a “common reliance” or “fraud on the market” claim?

    A legal theory where investors sue on the grounds they relied on public statements that were misleading. They need not prove personal reliance if the statements inflated the market as a whole.

    Why did Standard Chartered want to withhold documents?

    The bank claimed confidentiality and risk of foreign prosecution, particularly in the US and Singapore, as reasons not to disclose internal and regulatory materials.

    What did Judge Green decide about confidentiality?

    He ruled that the alleged prosecution risk was exaggerated and that confidentiality did not outweigh the importance of disclosure in civil justice.

    What does this mean for future investor litigation in England and Wales?

    It strengthens the standing of group investor claims, particularly those based on omissions or misleading disclosures, opening a door for broader securities litigation.

    How should financial institutions respond?

    They should review and enhance disclosure controls, ensuring investor communications are accurate, complete, and defensible, especially in multi-jurisdictional claims.

    To discuss any points raised in this article, please call us on +44 (0) 203972 8469 or email us at mail@eldwicklaw.com.

    Note: This article does not constitute legal advice. For further information, please contact our London office.

  • How Russian Sanctions Can Affect Commercial Transactions

    How Russian Sanctions Can Affect Commercial Transactions

    VTB Capital PLC v Continental Capital Markets Ltd

    The yet to be decided case of VTB Capital PLC v Continental Capital Markets Ltd (case number LM-2025-000237), which concerns settling securities trades for a sanctioned Russian company, illustrates how sanctions can result in costly legal disputes concerning contractual non-performance.

    The decision in VTB Capital PLC v Continental Capital Markets Ltd will provide strong indications about how the High Court will interpret the ongoing obligations of contractual parties when one party and their affairs are affected by international sanctions. This is incredibly important for businesses, which require certainty when it comes to entering into cross-border contracts.

    Background of the Case

    VTB Capital PLC (VTB) is the UK arm of VTB Bank, one of Russia’s largest financial institutions. Continental Capital Markets Ltd (CCM) was a London-based brokerage firm specialising in settlement services for securities transactions.

    The two parties had entered into a contract in which CCM was to perform trades in Russian securities. The contract was entered into before Russian sanctions were put in place. However, trades were due for settlement after the UK, EU, and US tightened restrictions on Russian banks. VTB claims CCM owes around $3.4 million for the trades that were left unsettled.

    The timeline leading up to the dispute is as follows:

    • Pre February 2022 – Trades executed without controversy.
    • February 2022 onwards – Invasion of Ukraine prompts coordinated sanctions.
    • Post-sanctions – VTB’s UK operations restricted, accounts frozen, and financial institutions forced to reassess obligations.
    • VTB brings a claim against CCM, alleging breach of contract.

    The Impact of Sanctions

    Although financial sanctions are designed to injure the country or persons connected with a particular State, they can and do cause considerable commercial upheaval and uncertainty.

    For VTB, the sanctions meant its accounts were frozen. The bank was barred from receiving payments or settling trades without UK government authorisation. Similar restrictions applied across Europe and the United States, creating uncertainty for contractual parties such as CCM.

    In practical terms, trades lawfully executed before Russia invaded Ukraine and sanctions imposed could not be settled afterwards. The result was millions of dollars in suspended transactions, leaving brokers and banks exposed to financial and legal risk.

    This is a textbook example of how international sanctions can affect investment bankers, forcing them to weigh contractual obligations against compliance with sanctions law.

    What are both parties’ legal arguments?

    There are three interlocking concepts: illegality, frustration, and sanctions licences.

    VTB position:

    • CCM owes $3.4 million under trades executed before the sanctions.
    • Performance was still possible under an OFSI general licence granted in  February 2022, which permitted certain wind-down activities.
    • VTB expressed a “clear intention” to fulfil its obligations under the contract and argued that sanctions did not extinguish CCM’s duty to perform the trades in question.

    CCM’s defence:

    • Performance of the trades was illegal under UK sanctions law without specific licences that were not available at the time.
    • The contracts were frustrated, meaning events outside the parties’ control made performance impossible.
    • Even where licences existed, they were limited and temporary, designed for winding down positions rather than creating new obligations.
    • Any payment would result in an overall loss rather than profit, since the resale of securities linked to VTB was effectively blocked.

    What are the implications of the High Court’s decision in VTB Capital PLC v Continental Capital Markets Ltd?

    The case before the High Court will hopefully clarify the following questions:

    • Can UK sanctions imposed under the Sanctions and Anti-Money Laundering Act 2018, frustrate contracts or simply suspend them until licences permit performance?
    • To what extent should the court prioritise commercial certainty when governments impose sanctions?

    To mitigate the risks of contract disputes developing, due diligence needs to be undertaken when entering into commercial contracts where one party is based, or is a subsidiary of a company based in a volatile region. An experienced Commercial and Sanctions Law Solicitor can assess the risks, including whether the scope of existing OFSI licences will allow ongoing performance. In addition, they can draft effective force majeure and frustration of contract clauses to protect their client’s interests.

    Wrapping up

    The High Court’s decision in VTB Capital PLC v Continental Capital Markets Ltd is highly anticipated. However, given the sums involved, certainty may remain elusive whilst the inevitable appeals proceed.

    We will keep you updated as more information comes to light.

    FAQs

    What is the VTB Capital v Continental Capital Markets case about?

    It concerns unsettled Russian securities trades worth around $3.4 million. VTB sued CCM for payment, but CCM argued the contracts were frustrated and illegal due to sanctions.

    What does “frustration” mean in English contract law?

    A contract may be discharged on the ground of frustration when something happens which makes it physically, legally, or commercially impossible to fulfil, or changes the obligations so radically that they are completely different to what was originally agreed.

    How do UK, US, and EU sanctions implemented after the Ukraine invasion affect investment bankers?

    They may prevent payments to and from sanctioned Russian banks, freezing transactions, and making settlement of specific trades highly uncertain.

    What is an OFSI general licence?

    It is an authorisation issued by the Office of Financial Sanctions Implementation allowing limited activities that would otherwise breach sanctions, such as winding down existing trades.

    Why does this case matter beyond the two parties?

    The decision may offer some commercial certainty about how the courts will handle claims brought on the grounds that contractual obligations disrupted by sanctions resulted in breach of contract.

    To discuss any points raised in this article, please call us on +44 (0) 203972 8469 or email us at mail@eldwicklaw.com.

    Note: This article does not constitute legal advice. For further information, please contact our London office.

  • Current trends – Arbitration in Central Asia

    Current trends – Arbitration in Central Asia

    Rashid and Charles discussed the dispute-resolution landscape in Central Asia, from differences in jurisdiction and enforcement between states to the rise of construction and renewable-energy claims, and the overlap between commercial and investor-state cases. They also touched on headline matters around the Kashagan and Karachaganak oil fields, using them to illustrate recurring themes such as delay and cost-overrun claims on megaprojects, and the practicalities of enforcing against state-linked counterparties.

    Rashid also shared insights from his career as a dual-qualified UK and Kazakh practitioner and spoke about the growth of the AIFC (Astana International Financial Centre) as a credible regional forum offering English law-based dispute resolution for foreign investors.

    As a London dispute-resolution boutique focused on cross-border matters, Eldwick Law is proud to contribute to thoughtful discussion in this area and to support the legal community’s engagement with a fast-evolving region.

  • Orders against third parties in arbitration

    Orders against third parties in arbitration

    A commentary on s.44 of the Arbitration Act 2025

    Confusing, unsatisfactory, inconsistent. These are some of the words that could be used to describe Section 44 of the Arbitration Act 1996 (“s.44”) just last year. With the Arbitration Act 2025 coming into force in August 2025, reforms have been introduced which aim to enhance efficiency and maintain England and Wales as a leading arbitration destination.

    S.44 Powers Pre-Arbitration Act 2025

    Confusion regarding s.44 stemmed from the fact that s.44(1) did not clarify how far the powers of the court extended. Three major cases relating to s.44 only served to further muddy the waters. The first case, Cruz City v Unitech [2014] EWHC 3704 (Comms), revolved around whether the court could grant an interim injunction against a third party under s.44(2)(e). The High Court concluded that the power did not extend to non-parties and denied the injunction. Similar attempts to apply s.44(2)(b) were equally unsuccessful in DTEK Trading SA v Morozon [2017] EWHC 1704.

    However, in the Court of Appeal case of A and B v C, D and E [2020] EWCA Civ 409, the Court held that s.44(2)(a) – the taking of the evidence of witnesses – was applicable to third parties. The reasoning of Flaux LJ was partially influenced by the fact that it is often rare for a witness to be a party to the arbitration.

    Changes to s.44

    S.44 seeks to clarify any uncertainty with a concise amendment, specifically to s.44(1): “whether in relation to a party or any other person”. The inclusion of ‘any other person’ clarifies that the court now has the power to make orders against uninvolved third parties in support of an arbitral award.

    As regards what orders the court may make, s.44(2) lists them as: 44(2)(a), Taking of the evidence of witnesses

    • 44(2)(b), Preservation of evidence
    • 44(2)(c)(i), Inspection, photographing, preservation, custody or detention of property subject of the proceedings
    • 44(2)(c)(ii), Samples, observation or experiment of property subject of the proceedings
    • 44(2)(d), Sale of any goods subject of the proceedings
    • 44(2)(e), Granting of an interim injunction or appointment of a receiver

    The court’s power to make interim injunction orders against non-parties should serve as a warning to those connected to any arbitral dispute.

    Future Development of s.44

    The Arbitration Act 2025 provides useful clarification on s.44. The conditions in which the court might make orders against third parties are yet to be determined and could likely come down to a case-by-case basis. Third parties’ retention of the full right of appeal under s.44(7) will also likely result in increased litigation as non-parties seek to prevent courts from imposing costly orders upon them. The door has now been opened for direct parties of arbitral proceedings to access orders and evidence previously denied. The dynamic between direct and indirect parties is likely to shift to a more adversarial one as direct parties seek evidence (inter alia) from indirect parties.

    Conclusion

    While the full consequences of s.44 reforms are yet to be seen, this is undoubtedly the beginning of a new era of court involvement in arbitral proceedings. Courts now have the authority to grant a wide variety of orders against third parties. However, the willingness and situations where the courts will grant these orders are yet to be seen and will be an area for case law development.

    Therefore, when arbitral proceedings are being commenced, parties both directly and indirectly involved should be attentive to the rights and obligations that they may have. Swift, decisive action will be vital in protecting their interests and ensuring a favourable outcome.

  • How to Remove a Company Director for Mismanagement

    How to Remove a Company Director for Mismanagement

    Can a company remove a director for mismanagement in the UK?

    Yes. Under UK company law, you can remove a company director for mismanagement but doing so requires a strategic, well-documented approach to minimise risk and ensure compliance with the Companies Act 2006.

    Director mismanagement may include:

    • Breaching statutory directors’ duties.
    • Failure to manage commercial and regulatory risks.
    • Lack of strategic leadership or competence.
    • Breach of fiduciary obligations.
    • Poor financial oversight or misuse of company funds.

    In my experience, once the relationship between a director and other board members deteriorates, trust is difficult to rebuild. Many companies wait too long to seek legal advice, increasing the chance of reputational and operational harm. If legal advice is sought early, non-litigious routes like negotiation or mediation may preserve company value and reduce tension.

    When trust is lost entirely, the business may have no option but to proceed with formal removal, especially if shareholders are concerned about corporate governance, investor confidence, or regulatory scrutiny.

    What are the legal grounds for removing a director in England and Wales?

    Removal by ordinary resolution (section 168 Companies Act 2006)

    Shareholders can remove a director by passing an ordinary resolution with a simple majority (51%). To begin the process, members must serve a Special Notice at least 28 days before the shareholder meeting.

    The director:

    • Must be given formal notice.
    • Can submit written representations in support of their position.
    • Has the right to speak at the meeting.

    The company is also required to file Form TM01 with Companies House once the director is removed.

    Court-ordered removal

    If the company has evidence of unfair prejudice under section 994 Companies Act 2006, the shareholders may apply to court for relief. If successful, the court can order the removal of the director. However, the courts rarely grant this remedy unless the Claimant’s can show serious misconduct or abuse of power.

    Voluntary resignation

    Provided the company’s Articles of Association, Shareholders’ Agreement, and the Director’s Service Agreement allow it, a director may resign voluntarily. No notice period is typically required, although contractual obligations may still apply.

    The process: how to remove a director for mismanagement

    To remove a company director for mismanagement, follow these steps:

    1. Review company documents
      Examine the Articles of Association, Shareholders’ Agreement, and Directors’ Service Agreement. These may specify grounds and procedures for removal.
    2. Serve Special Notice (28 days)
      Give the company at least 28 days’ notice before the shareholder meeting. The notice must detail the proposed removal and be formally delivered to the company.
    3. Inform the director and consider their submissions
      The director has a right to submit written arguments and attend the meeting. Their representations should be read out if they cannot be circulated.
    4. Pass an ordinary resolution
      If more than 50% of shareholders vote in favour of removal, the resolution passes.
    5. File Form TM01 with Companies House which removes the director from the official register.

    Risks of improperly removing a director

    Removing a director for mismanagement is not without legal and reputational risk.

    Employment law consequences

    If the director is also an employee, dismissal may trigger an unfair dismissal claim. To avoid liability, the removal must fall within one of the five fair reasons for dismissal:

    • Capability or qualifications.
    • Conduct.
    • Redundancy.
    • Illegality (continued employment breaches the law).
    • Some other substantial reason (SOSR).

    A formal process with clear documentation is essential.

    Reputational damage and investor concern

    Poorly handled removals can raise alarm bells for:

    • Customers
    • Partners
    • Staff
    • Investors

    To minimise fallout, document:

    • Financial mismanagement or breaches of fiduciary duty.
    • Internal complaints or whistleblowing.
    • Shareholder concerns.
    • Correspondence between the director and board.

    Taking early legal advice and keeping a full paper trail will protect the company’s legal position and public image.

    FAQs

    Can a company director be removed without their consent in the UK?

    Yes. Under section 168 of the Companies Act 2006, shareholders can remove a director via ordinary resolution, even if the director does not agree.

    Is mismanagement a valid reason to remove a director in the UK?

    Yes. Mismanagement may constitute a breach of statutory duties or fiduciary obligations. It may also amount to a fair reason for dismissal if the director is also an employee.

    Can a director bring a claim after being removed?

    Yes. If the director is an employee, they may bring a claim for unfair dismissal or breach of contract. Shareholder-directors may also claim unfair prejudice if removal was part of broader exclusion tactics.

    What documents do I need to remove a director properly?

    Key documents include:

    • Articles of Association
    • Shareholders’ Agreement
    • Director’s Service Agreement
    • Board minutes
    • Form TM01 for Companies House
    Is legal advice necessary to remove a director in the UK?

    Strongly recommended. Removal has legal, commercial, and reputational consequences. A solicitor can guide you through the correct process and reduce risk.

    Getting Legal Help

    To find out more about how our Company Law Solicitors can help you with removing a director or any other company law matter, please call us on +44 (0) 203972 8469 or email us at mail@eldwicklaw.com.

    Note: This article does not constitute legal advice. For further information, please contact our London office.

  • ISDS Readiness: How States Can Take Control Early in Investor Disputes

    ISDS Readiness: How States Can Take Control Early in Investor Disputes

    Lead Agency & External Counsel

    Host states can improve their internal dispute-management processes by designating lead agencies that are competent and technically capable of handling investor claims and liaising with the relevant state organs. This internal team or lead agency should have sufficient capacity to coordinate all parts of the dispute process, including the identification and engagement of external counsel. At the outset, it is advisable that the lead agency obtain an independent, third-party assessment early on. This should cover the merits of (i) a jurisdictional challenge, (ii) the prospects of success of any defence, and (iii) potential settlement options.

    For states facing multiple claims across sectors as wide-ranging as mining, energy, construction, and hospitality, and disputes that involve anything from alleged breaches of agreements to regulatory actions impacting particular investments, a centralised body is necessary. This ensures that incoming disputes, often many at once, are handled harmoniously and with sufficient coordination among state organs, local governments, and various political actors. Unlike companies, the size and bureaucratic makeup of a state make it far more costly and time-consuming to coordinate common steps in the dispute resolution process, such as identifying and preparing fact witnesses and experts, devising case theory, and handling media issues.

    Similar challenges arise when engaging external counsel, as law firms often need to liaise with multiple branches of government at both the state and local levels. Lead agencies can serve as effective liaisons between different state entities and external counsel.

    A ‘Whole-of-government’ approach

    A key part of internal preparation for ISDS is ensuring the involvement of relevant state entities and individuals with sufficient decision-making authority and capacity to support the state’s defence. This requires what is often referred to as a ‘whole-of-government’ approach, meaning a coordinated, unified response across various arms of government when handling disputes brought by foreign investors. Over the past decade, this approach has gained traction as states face increasingly complex and costly disputes and seek to protect their regulatory space while minimising potential liability under investment treaties. Consistent communication and cooperation between state entities and departments can help to identify potential claims before they arise, thus allowing states more time to prepare and gather necessary resources.

    Canada offers a clear example of the benefits of a whole-of-government approach through its experience with NAFTA Chapter 11 claims. In response to several ISDS cases, Canada established a centralised legal defence system led by its Trade Law Bureau, which coordinates across federal departments and provincial governments. This model has enabled consistent legal strategy, effective inter-agency communication, and active treaty management, positioning Canada as a leader in implementing the whole-of-government approach within investor-state arbitration.

    Document Collection

    Document preservation and collection are essential for investor-state arbitration. Gaps in a state’s document collecting system can lead to the permanent loss of valuable evidence, evidence which could have been relied upon to build a legal strategy. This loss of key documents can induce the tribunal to make adverse inferences against the state because the missing content would have supported the opposition’s claims.

    Collecting documents early and systematically helps states get a clear picture of the dispute, understand how likely it is to escalate, and stay ahead of key deadlines. It also makes it easier to follow the steps required under investment treaties, contracts, or local laws. Without a proper system, states can be unprepared when arbitral proceedings are launched.

    However, document collection is rarely straightforward. In most cases, relevant documents are dispersed across government departments and agencies, each with its filing systems, document retention policies, and levels of institutional memory. Some possess intact, well-ordered archives, while others have partial records or no standardised preservation procedures. This fragmented landscape significantly adds to the challenge of piecing together a coherent and comprehensive record of evidence.

    Recognising these challenges, some governments have taken proactive steps to strengthen their institutional frameworks for document management. While soon to be abandoned, the Energy Charter Treaty provides a guide that emphasises the importance of preparedness and transparency when addressing investment disputes. Reflecting these principles, Saudi Arabia has established the Committee for the Settlement of Disputes with Foreign Investors, established under the Foreign Investment Act. This committee is responsible for document collecting for arbitration proceedings. These responsibilities include coordination with relevant government ministries and state agencies, centralisation of information to form a unified and coherent response, gathering of documents to assist legal teams (whether internal or external), and conducting due diligence to verify the authenticity and relevance of documents being submitted in arbitration.

    These examples show just how valuable it is to invest in strong systems for collecting and managing documents. When states build these practices into their processes, they not only strengthen their position in arbitration but also send a clear message to foreign investors: they take transparency, legal certainty, and the rule of law seriously.

    Counterclaim

    States often prefer to systematically object to jurisdiction as an initial tactic, viewing it as a means to delay proceedings and, at times, to shift responsibility onto a subsequent government. However, this approach can blind the state to other potential remedies down the line—one of the most powerful being the counterclaim.

    While the availability of counterclaims will depend on the wording and scope of the treaty’s dispute resolution provision under which the tribunal’s jurisdiction is established, counterclaims can significantly level the playing field. They help address the asymmetry inherent in the state’s constant position as respondent in ISDS proceedings and can provide valuable settlement leverage. Counterclaims also serve as an effective tool to ensure that multiple proceedings relating to the same facts are not resolved in different forums, reducing the risk of inconsistent outcomes.

    Although states may pursue claims against investors in separate proceedings before local courts, where possible and relevant, counterclaims in the ISDS proceedings themselves should be treated as a primary recourse to promote procedural equality. Accordingly, states should consider the potential for counterclaims as early as upon receiving the notice of arbitration, ensuring they can be effectively integrated into the broader defence strategy.

    Funding

    As a preventative measure, states should allocate a portion of their national or ministerial budgets not only for legal costs but also for potential settlements of ongoing or foreseeable investor-state disputes. While attractive in theory, budget allocation for ISDS remains a complex and often politically sensitive process, particularly in states facing internal party divisions or oversight from supranational bodies. The recommendation to retain legal counsel early, combined with the reality of escalating legal costs in large and complex arbitrations, makes this even more challenging. Unexpected expenses may arise during arbitration, particularly if counterclaims are brought, further complicating the funding landscape for states.

    Given these challenges, time becomes the most valuable resource for states that expect potential ISDS claims or have received a notice of dispute. Delays in securing funds can hinder a state’s ability to retain experienced counsel, engage experts, and develop a coherent case strategy from the outset. Proactive financial planning also enhances the state’s ability to engage in the appointment of arbitrations and early settlement discussions when appropriate. Requesting and securing funding early can be the difference between mounting an effective defence and being caught unprepared.

    Conclusion

    As ISDS evolves, so too must the attitude of states, taking a more proactive and modern approach. The myth that states are inherently disadvantaged overlooks how early preparation, institutional coordination, and effective planning can affect outcomes. By embracing a whole-of-government approach, improving document systems, preparing for counterclaims, and securing early funding, states not only minimise legal risk but also reinforce investor confidence in their government.

  • ICC, LCIA and HKIAC – Governing Law, Seat Selection, Efficiency

    ICC, LCIA and HKIAC – Governing Law, Seat Selection, Efficiency

    Choice of Governing law

    The data from the ICC over the past three years confirms the preference for English and Welsh governing law in international arbitration. A steady and consistent use of English law has been reported, with 125 cases governed by it in 2024, maintaining its primary position. In contrast, the use of U.S. law has seen a gradual decrease, from 81 cases in 2023 to 69 in 2024 and Swiss law, which featured prominently in 2023 with 83 cases, fell from the top ranks in 2024 after recording 53 cases in 2022. This comparative trend reflects a global appeal of the English legal system’s respect for party autonomy, especially for parties that seek predictability in decisions. Party autonomy refers to the freedom of contracting parties to determine the terms of their agreement, which is fostered by an objective interpretation of contracts by the English courts. By giving priority to the express terms of the contract and avoiding reliance on extrinsic evidence, the choice of English and Welsh governing law is more attractive to international parties for its legal certainty and protection of agreed terms.

    Seat Choice

    There has also been a slight shift in seat selection within ICC arbitrations in favour of the United Kingdom. In 2024, the UK overtook France as the most selected seat, with 96 cases compared to France’s 91. This is a reversal of the previous year where France led with 99 cases against the UK’s 85. This upward trajectory continues from 2022, when the UK was selected in 74 cases. Since the introduction of the Arbitration Act 1996, the UK has established a reputation for judicial non-interference. English judges generally refrain from intervening in the conduct of arbitral proceedings and are supportive in enforcing final awards, creating a legal environment that reinforces the finality and integrity of arbitration.

    Lengths and delays of Proceedings

    The average duration of ICC arbitration proceedings has remained relatively stable over the past three years, typically concluding within 26 to 27 months. In 2024, the average duration was 26 months, consistent with 2022 and slightly improved from 27 months in 2023. However, data on procedural delays indicates some growing inefficiencies. In 2024, 75 cases experienced delays exceeding two months, compared to 49 cases in 2023 and 29 cases in 2022, showing an upward trend in longer delays despite the stable overall duration.

    Despite the rising number of delays there has been reform enacted to streamline the arbitral process. This is exhibited by the ICC’s 2021 Rules, which introduced stricter time limits for arbitrators to render awards, including financial penalties such as reduced fees if deadlines are not adhered to. While these measures aim to encourage efficiency and meet procedural deadlines, they appear to have limited de facto impact.

    A key factor that could be contributing to the worsening of delays, despite the changes in promoting efficiency, is the phenomenon of due process paranoia. This occurs when tribunals adopt an overly cautious approach to avoid challenges to final awards based on procedural unfairness. This has led to arbitrators granting repeated procedural requests from parties, particularly at late stages, which undermines both efficiency and equal treatment. As seen in cases like Jaguar Energy and Anwar Siraj, courts generally support tribunals’ procedural decisions and reject weak due process challenges. However, the inflated perception of risk continues to affect case management, enabling actions that prolong proceedings and increase delay.

    Changes in Asian regional distribution

    The ICC data also reveals subtle changes in the regional distribution of parties involved in arbitrations, including a gradual decline in participation from Central and West Asia. In 2022, parties from this region accounted for 11% of the caseload, rising to 12.7% in 2023 before falling to 10% in 2024. This downward trend may reflect the development and appeal of regional arbitration centres, such as the Dubai International Arbitration Centre (“DIAC”) and the Qatar International Court and Dispute Resolution Centre, which offer geographically closer and often more cost-effective alternatives. Conversely, North and West European parties continued to dominate, rising from 28.8% in 2023 to 30.2% in 2024. These figures suggest a rebalancing of global arbitration activity, with European parties consolidating their presence and some Asian and Middle Eastern parties exploring arbitration locally.

    Future changes

    Looking to the future, English law will continue to dominate arbitration proceedings. As for seat preference, the recent enactment of the Arbitration Act 2025 introduces a series of targeted reforms that modernise and enhance the efficiency of the arbitration process in England. Tribunals have been given new powers to summarily dispose of claims; the Act has provided clarification of court authority over third parties, codification of emergency arbitrator enforcement, and stricter procedures for challenging awards. These reforms, in combination with England’s commercial jurisprudence and pro-arbitration judiciary will likely further increase the appeal of English law and London as the seat of arbitration.

    Comparative Analysis

    HKIAC

    The 2024 statistics reveal that the ICC maintains a broader global presence compared to HKIAC. Parties to ICC arbitrations came from 145 countries, whereas HKIAC involved parties from 34 jurisdictions, primarily from Asia and offshore hubs such as Mainland China, Hong Kong, and the Cayman Islands. While both institutions conduct most arbitrations in English, HKIAC maintains a significant portion in Chinese (15.9%) or bilingually (4.3%), reflecting its regional orientation.

    The choice of governing law further illustrates the difference between the HKIAC’s more local appeal in comparison to the global attractiveness of the ICC. In 2024, ICC arbitrations involved over 100 different legal systems, with English law as the dominant choice. HKIAC cases, while involving 15 governing laws, primarily applied Hong Kong law, followed by English and Chinese law, reinforcing its alignment with the Greater China commercial bubble. Overall, the ICC shows greater international diversity, whereas HKIAC displays its appeal for tackling Asia-based party disputes.

    LCIA

    English and Welsh law continues to dominate as the governing law in both LCIA and ICC arbitrations. However, recent statistical reports suggest that there has been a decline in its choice. At the LCIA, the choice of English law has gradually declined: from 85% of arbitrations in 2022 to 83% in 2023, and down to 78% in 2024. Likewise, English law was chosen in 125 (15%) new cases for ICC proceedings in 2024, this represents a decline from 131 cases in 2023. This drop may indicate that while London remains a preferred seat, parties are increasingly opting for other governing law provisions.

    Conclusion

    The 2024 data confirms that English law and London remain central to international arbitration, despite minor declines in usage. Their continued dominance stems from the legal consistency, party autonomy, and enforcement-friendly environment they offer. The Arbitration Act 2025 is expected to strengthen this position further by modernising English arbitration and improving procedural efficiency.

    While institutions like HKIAC and DIAC are increasing in popularity regionally, the ICC maintains a broader international presence, accommodating a wider range of legal systems and parties. The LCIA’s gradual diversification in governing law choices signals growing openness but still reflects the appeal of English law.

    Overall, the trends indicate that jurisdictions offering legal clarity, efficient procedures, and judicial support will remain at the forefront of global arbitration. England’s proactive legal reforms and arbitration-friendly stance ensure it continues to lead in this evolving landscape.

  • Recognition for Rashid Gaissin in Lexology Index Energy 2025

    Recognition for Rashid Gaissin in Lexology Index Energy 2025

    Link to Rashid’s Lexology page: https://www.lexology.com/firms/eldwick-law/rashid_gaissin

  • Can Shareholders Claim For Unfair Prejudice?

    Can Shareholders Claim For Unfair Prejudice?

    By involving a solicitor early on, there is a greater chance of resolving matters through mediation, negotiation, or other non-court dispute resolution methods.

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    What Is Unfair Prejudice?

    Under section 994 of the Companies Act 2006, company members can bring a claim of unfair prejudice if they can prove:

    • That the company is being run, or has been run, in a way that unfairly harms the interest of its members (including the person making the complaint); and/or
    • That something the company has done, plans to do, or has failed to do is, or would be, unfairly harmful to those interests.

    It is crucial to note that the petitioner must prove, on the balance of probabilities, that there was prejudice and that it was unfair.

    In Loveridge v Loveridge [2020] EWCA Civ 1104, the Court of Appeal ruled a minority shareholder cannot normally complain of conduct which falls within the company’s constitution unless they can show certain rules under the constitution have been breached or those rules have been used in a way contrary to good faith.

    What are some examples of unfair prejudice to minority shareholders?

    Unfair prejudice to minority shareholders can include:

    • Not distributing dividends.
    • Creating more shares in the company (share dilution) without a shareholder resolution.
    • Inappropriately removing the auditor of the company.
    • Mis-valuing a particular class of members’ shares.
    • Prioritising a director’s personal interests over the company’s success.
    • Non-compliance with the company’s articles of association.
    • Directors inappropriately dealing with company assets.
    • Withholding information, especially company accounts and reports.

    Unfair prejudice was held not to exist where:

    • The majority shareholders refusing to buy shares in the company from the minority, or sell shares to the minority.
    • Commercial mistakes or management incompetence or a dispute regarding the commercial direction of the company.
    • Good faith amendments to the company’s Articles to include drag along provisions which could force the sale of the minority’s shares.

    Can an unfair prejudice petition relate to future conduct by majority shareholders?

    This is one of the most common questions clients ask us, and fortunately, the answer is yes.

    For example, if the directors propose a change in the company’s share structure or changing the composition of the board, it is often easier and more effective to make a petition under section 994 seeking an injunction than trying to deal with the event after it happens.

    What relief can the Court provide if my unfair prejudice claim succeeds?

    Under section 996 of the Companies Act 2006, if you can prove unfair prejudice, the Court has the power to grant the following relief:

    • Grant an injunction to refrain the company from doing the act complained of or to do something the petitioner wants done (based on the petition).
    • Allow civil proceedings to be brought in the name and on behalf of the company.
    • Prohibit any alterations to the company’s Articles without the leave of the Court.
    • Order the compulsory purchase of the minority’s shares by the majority at a price set by the Court. This is the most common remedy sought by petitioners.

    The Courts will refuse to make a compulsory purchase order if doing so would be disproportionate to the prejudice you have suffered. Your petition may also be struck out if remedies are available via the Articles or Shareholders’ Agreement and there is evidence you tried to bypass those remedies by bringing a section 994 petition.

    How does the Court calculate the share price if it orders compulsory purchase?

    In most cases, our clients will seek an order for the purchase of shares at a price based pro rata on the value of the company on the valuation date. This is different to the market or commercial valuation of the petitioner’s shares, which will usually involve applying a substantial ‘full’ minority discount to the pro rata figure. For obvious reasons, the majority shareholders ordered to purchase the shares will want the valuation based on market value.

    The method of valuation is decided on a case-by-case basis and depends on the nature and extent of the unfair prejudice. The Court can use other valuation methods aside from the pro-rata valuation or valuation subject to minority discount.

    The Court will also determine the valuation date. As a starting point, the date of the share purchase order will be applied. In some cases, it is in our clients’ best interests to argue for a different date, for example if majority shareholders have diverted business or assets from the company to reduce its value. It may also be advantageous to argue, in cases where our clients were part of the initial investors in the company, that a quasi-partnership existed. This means our clients had an expectation of participating in the management and profits of the company. If the Court finds a quasi-partnership exists, they will not apply a minority discount to the shares if a majority buy-out is ordered.

     

    Final words

    Believing you have been unfairly prejudiced by the acts or omissions of majority shareholders can be frustrating and infuriating, especially if you helped build the company from the beginning. Getting legal advice sooner rather than later can help to resolve the dispute via non-court methods such as mediation and negotiation. In our experience it is extremely rare for unfair prejudice disputes to reach court. In most cases, most people are keen to resolve matters as quickly, cost-effectively, and stress-freely as possible. Getting early legal advice is the best way to achieve this.

    To discuss any points raised in this article, please call us on +44 (0) 203972 8469 or email us at mail@eldwicklaw.com.

    Note – This article does not constitute legal advice. For further information, please contact our London office.