On July 12, 2013 the President of the Republic of Belarus has signed a new law of the Republic of Belarus “On Investments” (hereinafter – the “Law”) most of the provisions whereof shall be effective in 6 months after its official publication.
The Law has successfully resolved the conflict of laws having existed in the Belarusian legislation with respect to determination of competent body for settlement of investment disputes. Prior to adoption of the Law, foreign investors could refer disputes to international arbitration only provided such arbitration was determined as a competent judicial body in the respective Bilateral Investment Treaty, while the possibility to file a complaint with the International Centre for Settlement of Investment Disputes (hereinafter – the ‘ICSID’) was precluded by incorrect wording of the Belarusian laws.
The new Law explicitly confers foreign investors with the right to submit investment disputes between investors and the Republic of Belarus to the ICSID or ad hoc arbitration to be formed pursuant to the UNCITRAL Arbitration Rules.
The Law demonstrates flexibility in choice of procedures for investment disputes settlement. In particular, foreign investors are entitled to use other mechanisms for legal protection in case such are stipulated in the respective Bilateral Investment Agreement or set forth directly in the investment agreement between the investor and the Republic of Belarus.
In our view, vesting foreign investors with the right to apply for protection of the violated rights to international courts, including ICSID which is the worldwide leading authority in investment disputes settlement proves that the Republic of Belarus aspires to pari passu unbiased and fair settlement, of legal conflicts with private investors.
We expect the new Law to become a positive step in the legal governance of investment activity in the Republic of Belarus as well as a trigger for improvement of the investment climate in the country!