Investor–State Dispute Settlement in Central Asia: Choosing the Right Protection Pathway in a Fragmented Treaty System

Central Asia—encompassing Uzbekistan, Kazakhstan, Tajikistan, Kyrgyzstan, and Turkmenistan—is a high-growth, high-stakes region where legal structuring decisions made at the outset can determine whether an investment dispute can be brought, and whether an award can ultimately be enforced.

Foreign investment into the region has expanded rapidly over the past decade, with Kazakhstan alone accounting for nearly 70% of accumulated FDI. At the same time, the legal infrastructure governing investor protection has become increasingly complex and fragmented, spanning:

• legacy post-Soviet and the CIS multilateral and bilateral treaties
• modern regional frameworks such as the Eurasian Economic Union (EAEU) Treaty’s investment chapter
• a rapidly evolving network of bilateral investment treaties (BITs)
• sector-specific instruments such as the Energy Charter Treaty (ECT)

For investors and in-house counsel, the key challenge is to choose the correct protection pathway in a multi-layered system where different instruments may overlap, conflict, or fail at the enforcement stage.

This article provides a structured analysis of the Central Asian investment treaty architecture as of May 2026. It focuses on three practical questions:

• Where can investors bring claims?
• Which instruments are actually effective in practice?
• How should investments be structured to preserve dispute resolution options?

Drawing on publicly reported cases and recent treaty developments, it highlights both emerging opportunities and recurring risk patterns that continue to shape investor–state disputes across the region.

I. The Multilateral Treaty Architecture: A Framework Map

A. The CIS Convention on Protection of Investor Rights (1997)

The Convention on Protection of Investor Rights, signed in Moscow on March 28, 1997 (commonly called the “Moscow Convention” or “CIS Convention”), was one of the first multilateral investment protection frameworks to emerge from the post-Soviet space. It was signed and ratified by six states—of which three are Central Asian: Tajikistan, Kazakhstan, and Kyrgyzstan—alongside Armenia, Belarus, and Moldova, and entered into force on January 21, 1999. Notably, Azerbaijan, Georgia, and Russia have signed but never ratified the CIS Convention, while Uzbekistan and Turkmenistan are not parties.

The CIS Convention was groundbreaking in establishing regional investor protection standards—including national treatment, MFN treatment, and a prohibition on expropriation without compensation—at a time when most of these states were only beginning to build their independent BIT networks. However, it contains a critical ambiguity: Article 11, which establishes investor-state dispute settlement, refers to “international arbitration” without specifying a particular arbitral institution or set of rules. This open-ended drafting has generated substantial jurisprudential controversy.

Known cases under the CIS Convention are few in number but legally significant. All four publicly known cases were brought against the Kyrgyz Republic, making it the only Central Asian state against which publicly known CIS Convention-based investor-state arbitration claims have been invoked. In three of the cases the tribunals issued final awards:

1. Lee John Beck and Central Asian Development Corporation v. Kyrgyz Republic — The investors claimed expropriation of leasehold interests in land plots in Bishkek. The tribunal awarded USD 23 million, finding the government had expropriated the claimants’ investment by terminating lease agreements.
2. OKVV et al. v. Kyrgyz Republic — Seventeen CIS investors claimed expropriation of their interests in the Avrora Green resort and residential complex. The tribunal awarded approximately USD 2.4 million.
3. Stans Energy v. Kyrgyz Republic — The Canadian investor claimed more than USD 117 million in compensation for the alleged expropriation of its interest in a rare earth minerals mining project. The tribunal ruled in favor of the claimant. (A second arbitration (PCA Case No. 2015-32) was subsequently filed after the first award was set aside; the second tribunal awarded USD 15 million, plus interest and costs.)

All three of the final awards were subsequently challenged before Russian courts (the seat of arbitration was Moscow under the CIS Economic Court framework). The CIS Economic Court itself issued an opinion disagreeing with the tribunals’ jurisdictional interpretation, holding that Article 11’s open reference to “international arbitration” cannot form a sufficient basis for jurisdiction without a more specific agreement between the parties as to the arbitral institution. Russian courts, taking the CIS Economic Court’s advisory opinion into account, set aside all three awards—a dramatic illustration of the Convention’s enforcement vulnerability and the dangers of ambiguous arbitration clauses in multilateral investment treaties.

In the fourth publicly known case, Consolidated Exploration Holdings v. Kyrgyz Republic, the parties settled a dispute over the alleged expropriation of the claimant’s interest in a major gold deposit in Kyrgyzstan. The claim was filed under several legal instruments, including the CIS Convention.

Status and relationship with EAEU instruments: The CIS Convention has not been formally terminated or replaced. In practice, however, the 2014 EAEU Treaty’s investment chapter (Annex 16) is the main multilateral framework for the five EAEU member states that are also CIS Convention signatories: Belarus, Kazakhstan, Russia, Armenia, and Kyrgyzstan. The CIS Convention still has residual relevance for Tajikistan and Moldova, which remain parties to it but are not EAEU members. That relevance is narrowing, however, with Moldova recently deciding to leave the CIS.

B. Agreement on Promotion and Reciprocal Protection of Investments in the Member States of the Eurasian Economic Community (2008)

The Eurasian Economic Community (EurAsEC) was established by the Treaty of October 10, 2000, signed by Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. The Community served as the primary vehicle for post-Soviet economic integration in the early 2000s. The Agreement on Promotion and Reciprocal Protection of Investments in the Member States of the Eurasian Economic Community, signed in Moscow on December 12, 2008 (the “2008 Eurasian Investment Agreement”), emerged from the EurAsEC integration framework and was signed by all five EurAsEC member states at the time. Its entry into force was completed on January 11, 2016. Uzbekistan participated intermittently in EurAsEC (joining in 2006, suspending in 2008) and was not a signatory to the 2008 Eurasian Investment Agreement.

The Treaty on the Eurasian Economic Union (EAEU Treaty) was signed on May 29, 2014, in Astana by Belarus, Kazakhstan, and Russia, entering into force on January 1, 2015. Armenia acceded on January 2, 2015, and Kyrgyzstan on August 6, 2015. At a meeting of the EurAsEC Interstate Council in Minsk in October 2014, a decision was taken to dissolve EurAsEC into the EAEU from January 1, 2015. The depositary function for EurAsEC treaties was transferred to the Russian Federation Foreign Ministry.
The 2008 Eurasian Investment Agreement is a compact, self-contained investment treaty consisting of 14 articles. Its structure mirrors a classic BIT model, translated to a multilateral regional format. The temporal scope of the 2008 Agreement in Article 12 covers investments made since January 1, 1992. The 2008 Eurasian Investment Agreement also contains a ten-year post-termination survival clause under Article 14(3).

Critically for investors and counsel, the dissolution of the EurAsEC did not automatically terminate the 2008 Eurasian Investment Agreement. The 2008 Agreement therefore remains operative between the parties that ratified it (Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia), while Annex 16 of the EAEU Treaty governs intra-EAEU investment among all five current members. Tajikistan remains a party to the 2008 Eurasian Investment Agreement but has not joined the EAEU; it thus retains rights and obligations under the 2008 instrument without access to Annex 16.

C. The EAEU Treaty Investment Chapter (2014, Annex 16)

The EAEU Treaty signed on May 29, 2014, and its investment-specific Annex 16 (“Protocol on Trade in Services, Establishment, Activities and Investments”) represents the most legally sophisticated multilateral investment framework in the post-Soviet space. It applies to the five EAEU member states—of which two are Central Asian states: Kazakhstan and Kyrgyzstan—alongside Belarus, Russia, and Armenia.
Annex 16 provides for:

• Fair and equitable treatment of qualified investments and investors
• National and MFN treatment
• Protection from unlawful expropriation, both direct and indirect
• Free transfer of funds related to investments
• Investor-state dispute settlement under multiple dispute settlement forums, including ICSID, ICSID Additional Facility, and UNCITRAL arbitration and other arbitral institution or rules agreed by the parties.

Known cases under the EAEU Treaty are limited but growing. The Annex 16 ISDS mechanism was largely dormant in its first years, but recent data confirms that EAEU-based investment arbitration is expanding faster than commonly reported.

1. OOO Manolium Processing v. Republic of Belarus (PCA Case No. 2018-06) — This is the best-documented EAEU Treaty arbitration on record. A Russian investor claimed expropriation of its investment in a luxury hotel development project in Minsk, where the government had terminated a 2003 investment agreement and subsequently imposed a USD 20 million “tax debt” used to seize the claimant's relocated facilities. The PCA-administered tribunal, applying UNCITRAL Rules 2013 and Annex 16 of the EAEU Treaty, decided in favor of the investor, awarding USD 20.4 million in damages plus EUR 402,424.88 in arbitration costs and USD 1,438,405.46 (75% of legal fees). Manolium is notable as the first publicly available EAEU Treaty arbitration award on record and established the viability of the Annex 16 mechanism as a functional ISDS pathway.
2. RusHydro v. Kyrgyzstan (PCA, 2018)—Russia’s state-owned hydroelectric giant claimed USD 37 million following the Kyrgyz government's termination of an intergovernmental agreement for the construction of the Upper-Naryn hydroelectric power plants. The tribunal partially decided in favor of the investor in July 2022.
3. GRAND EXPRESS Non-Public Joint Stock Company v. Republic of Belarus (ICSID Case No. ARB(AF)/18/1) — A Russian joint stock company challenged Belarus’s conduct in connection with a joint venture to develop railcar manufacturing capacity in Belarus. The tribunal declared the claims inadmissible after finding that the claimant had defrauded its Belarusian partner and submitted falsified documents to the Eurasian Development Bank.

These cases, while few in number, establish a critical precedent: the EAEU Treaty’s Annex 16 is a live ISDS mechanism capable of generating enforceable awards. Practitioners representing investors in EAEU member states should structure their investment vehicles with Annex 16 eligibility in mind as a treaty-of-last-resort or complement to BIT protections—particularly where the investor is itself an EAEU-domiciled entity or person.

D. The CIS Agreement on Free Trade in Services, Establishment, Activities and Investment (2023)

The CIS Agreement on Free Trade in Services, Establishment, Activities and Investment (the “2023 CIS Agreement”), signed on June 8, 2023, in Sochi, is the most significant new multilateral investment instrument in the post-Soviet space since the 2014 EAEU Treaty. It was signed by four Central Asian states, Kyrgyzstan, Kazakhstan, Tajikistan, and Uzbekistan, alongside Russia, Armenia, and Belarus. Entry into force has been staggered: Belarus, Kyrgyzstan, and Tajikistan from June 5, 2024; Russia from July 24, 2024; Armenia from November 13, 2024; Kazakhstan from June 11, 2025; and Uzbekistan has not yet ratified the instrument. Turkmenistan is not a signatory and remains outside this framework, further deepening its isolation from the regional multilateral investment architecture.

The 2023 CIS Agreement’s strategic significance for Central Asia lies in its purpose of extending investment protection standards to Uzbekistan and Tajikistan—neither of which is an EAEU member—by incorporating several EAEU Treaty-like provisions into a CIS-wide framework. From an investor-state arbitration perspective, the 2023 CIS Agreement’s most consequential provisions are found in Chapter V (Investment). Substantive protections include full protections and security, national treatment, MFN treatment, protection against direct and indirect expropriation with prompt, adequate, and effective compensation, and guarantees of free transfer of investment-related payments. The treaty contains a number of exceptions and exclusions. Critically for dispute resolution practitioners, Article 36 establishes a multi-tier ISDS mechanism: disputes must first be pursued through negotiations; if unresolved within six months, the investor may submit the claim to the host state’s domestic courts, arbitration court of the host state, ad hoc arbitration under UNCITRAL Rules, or any other permanent international arbitral institution agreed by the parties. Notably, the Agreement imposes a three-year limitation period running from the date the investor received information regarding the alleged treaty breach or reasonably should have received such information—a strict deadline that practitioners must calendar carefully. The contracting parties may also agree to negotiate the treaty’s interpretation. Arbitration proceedings must be suspended while those negotiations are ongoing. Kazakhstan has further entered a reservation requiring that investment claims against it be heard exclusively before the Astana International Financial Center (AIFC) Court rather than domestic arbitration tribunals. Sector-specific carve-outs in the individual schedules may affect the scope of investment protection on a country-by-country basis and warrant careful review in each mandate.

E. The Energy Charter Treaty (ECT) in Central Asia

The ECT, adopted in 1994 and entered into force in 1998, applies to all five Central Asia states—Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. Other countries of the broader region are also parties, includingArmenia, Azerbaijan, Georgia, Mongolia, and Turkey. The ECT has been widely used as an ISDS basis in energy-sector disputes across Central Asia and remains relevant given the region’s extractive FDI profile. However, the ECT’s future is under review following the withdrawal of several EU member states and the failure of the 2022 modernization effort to gain consensus. None of the Central Asian states have withdrawn from the treaty as of May 2026. The ongoing global rise in resource disputes—with oil, gas, and mining cases comprising 45% of new cases registered at ICSID in 2025—makes the ECT’s continuing relevance a live question for energy investors in Central Asia specifically.

As of September 3, 2025, the modernized ECT has entered into force among those contracting parties that ratified it and thus opened a new chapter in the treaty’s history. This creates a three-tier ECT regime—(1) withdrawing states still subject to sunset clauses, (2) parties that adopted the 2024 amendments, and (3) parties applying the original 1994 text. The modernized ECT applies provisionally to all five Central Asian States as of 3 September 2025, which means that between these states the modernized ECT applies provisionally. The version of the ECT applied in relation to the Central Asian states with other ECT parties is more complex and must be verified before any decisions are made.

Read more about ECT and the protections it offers.

II. Bilateral Investment Treaties: The Expanding Network

As of May 2026, the Central Asian states collectively participate in well over 220 BITs. The most active treaty signatories remain Kazakhstan and Uzbekistan. Across the region, UNCITRAL Rules and ICSID arbitration remain the two predominant ISDS mechanisms invoked, with the Stockholm Chamber of Commerce (SCC) remaining a popular venue particularly for intra-CIS disputes.

New BITs: 2024–2026
A wave of third-generation BIT activity has reshaped the landscape:

• Kazakhstan-Kyrgyzstan BIT (2024): Signed April 19, 2024 and ratified by Kazakhstan in early 2025. This replaces a 1997 agreement and is widely regarded as the most advanced intra-regional investment treaty in Central Asian history.
• India-Uzbekistan BIT (2024): Signed September 2024, in force since May 15, 2025. Follows India's post-2016 model treaty.
• Italy-Uzbekistan BIT (2025): Signed in May 2025 and awaiting entry into force.
• China-Tajikistan BIT (2024): Entered into force August 20, 2025. Reflects the deepening of China's Belt and Road partnership with Tajikistan.
• Japan-Tajikistan BIT (2025): Signed in Tokyo on December 19, 2025, not yet in force.
• China-Kazakhstan BIT (2025): Signed June 2025, not yet in force. The Kazakh Parliament adopted the ratification law on May 6, 2026, and the law is now pending approval by the Senate and promulgation by the Kazakh President.
• Jordan-Uzbekistan BIT (2025): Signed in August 2025 and awaiting entry into force.

III. Country-Level Profiles: ISDS Exposure and Reform

A. Kazakhstan

Kazakhstan is party to more than 50 BITs in addition to the investment agreements discussed in this article. The country also signed and ratified the Singapore Convention on Mediation on May 23, 2022, which entered into force on November 23, 2022. Kazakhstan’s ISDS exposure is the most significant of any Central Asian state: it has faced over 20 investor-state claims, with the oil, gas, and mining sectors dominating its docket. Key known disputes have involved companies such as Alhambra Resources, World Wide Minerals and Aktau Petrol. I represented investors under Kazakh BITs and its foreign investment law in five publicly reported disputes. The ICSID caseload as of December 31, 2025 totaled 1,085 cases globally, with energy and natural resources disputes hitting a 10-year high; Kazakhstan’s prominence in extractive FDI places it squarely in this trend. Kazakhstan’s new BIT with China, concluded in June 2025, contains a number of novel provisions, including a narrow scope of the fair and equitable treatment limited to denial of justice, material breaches of due process, and outright arbitrariness. Kazakhstan’s arbitration-friendly stance has, however, suffered a significant blow in May 2006 when Kazakhstan’s Ministry of Justice refused to implement the AIFC court’s order recognizing and permitting enforcement of Naftogaz’s USD 1.4 billion award against Gazprom. The Ministry of Justice’s response marks a notable shift from an earlier portrayal of the AIFC as an autonomous, investor-friendly enforcement hub. Although the AIFC Court authorized enforcement in line with prior assurances that its judgments would be enforceable nationwide like national court decisions, on May 27, 2006, the justice minister stated that Kazakhstan would not serve as a “transit venue” for awards lacking a sufficient legal nexus and described the order as non-final and non-binding in practice. This suggests that political and jurisdictional considerations may override prior pro-enforcement assurances. Investors should therefore reassess Kazakhstan as an enforcement venue, particularly in geopolitically sensitive cases.

B. Kyrgyzstan

Kyrgyzstan has the most unusual ISDS profile in Central Asia. It signed at least 40 BITs in addition to the ECT, the CIS Convention and the EAEU Treaty. Together with Kazakhstan, Kyrgyzstan represents the only two countries in Central Asia that signed and ratified the Singapore Convention on Mediation. The Convention will enter into force for Kyrgyzstan on June 1, 2026. It has faced at least 18 known investor-state claims—a striking number for an economy of its size—and has been the sole respondent in all three CIS Convention-based arbitration claims with final dispositive awards on record. The most important structural development is the adoption of Law on Investments No. 198 (August 12, 2025), which introduces a mandatory multi-tier ISDS mechanism requiring investors to exhaust negotiations, mediation, and domestic proceedings before accessing international arbitration. This is a significant restriction on investors’ previously broad direct access to international arbitration. Without comprehensive renegotiation of existing BITs—many of which allow more direct ICSID or UNCITRAL recourse—the domestic law reform alone cannot, however, override treaty-level ISDS rights. In April 2026, President Japarov signed further amendments to the law clarifying that investor property may only be confiscated by court order in criminal proceedings, addressing a recurring vulnerability in prior disputes.

C. Uzbekistan

Uzbekistan is party to at least 59 BITs, the ECT and the 2023 CIS Agreement (not yet ratified). Its ISDS record has historically been limited, but the Tashkent International Arbitration Centre tripled its caseload between January 2024 and January 2025, signaling a more active dispute resolution environment. The new India-Uzbekistan BIT (2024) is notable for its “counterclaims” provision allowing host states to bring claims against investors for breaches of the treaty, including compliance with host state law, anti-corruption norms, and in certain instances potentially corporate social responsibility principles—a structural innovation absent from most of Uzbekistan’s earlier treaty network.

D. Tajikistan

Tajikistan is party to at least 45 BITs, the CIS Convention, the 2008 Eurasian Investment Agreement, and the ECT. Tajikistan is the only Central Asian state that is both a CIS Convention party and a non-EAEU member, making it a jurisdiction where the Convention retains direct, non-superseded relevance. Notably, Tajikistan is the only Central Asian country that is not party to the ICSID Convention. In May 2025, the country adopted a new Law “On Capital and Promotion of Investment Activity” (No. 2173, May 14, 2025), replacing its 2016 investment statute and establishing updated guarantees for foreign investors.

E. Turkmenistan

Turkmenistan is party to at least 31 BITs and the ECT. It is not party to the CIS Convention, the EAEU Treaty, or the 2023 CIS Agreement, thus largely staying outside of the regional instruments. The most significant ISDS development in the 2024–2026 period was the Arbitration Court of Turkmenistan’s first known application under the New York Convention for the recognition and enforcement of a foreign arbitral award (July 2025)—which the court denied, holding that the dispute did not qualify as “commercial” under Turkmenistan’s domestic legislation. This decision starkly illustrates the practical gap between Turkmenistan’s formal treaty commitments and domestic enforcement realities, and represents a significant deterrent for prospective claimants seeking to enforce awards against Turkmen state entities in Turkmenistan.

Below is a summary of the Central Asian ISDS map:

IV. Practitioner Guidance

For investors entering or expanding operations in Central Asia, dispute resolution strategy should be considered at the transaction structuring stage—not after a dispute arises. The region’s treaty landscape offers multiple avenues for protection, but also significant hidden constraints.

Based on current treaty practice and case experience, the following considerations are critical:

1. For most foreign investors, BITs remain the most reliable and flexible ISDS framework. Structuring through a jurisdiction with a modern BIT in force and access to ICSID or UNCITRAL arbitration continues to be the cornerstone of investment protection planning. Nationality planning is therefore not a formality—it is the single most important legal decision affecting downstream dispute options.
2. The EAEU Treaty’s Annex 16 is an emerging secondary pathway for Russian, Kazakh, Kyrgyz, Belarusian, and Armenian investors operating within the EAEU. EAEU eligibility should be assessed alongside BIT coverage in transaction planning, particularly where investment structures involve regional entities.
3. The CIS Convention should not be relied upon as a standalone ISDS mechanism. Its three known awards were all set aside by Russian courts following the CIS Economic Court's advisory opinion against jurisdictional validity. It coexists with other instruments but provides no reliable dispute resolution guarantee in practice.
4. Kyrgyzstan requires particular attention in light of the new multi-tier ISDS domestic law (August 2025). Investors in Kyrgyzstan should assess whether their investment vehicle qualifies under an existing BIT (which may override the domestic law requirement to exhaust lower tiers) and ensure their legal strategy addresses the legal mismatch between the new domestic law and existing treaties.
5. Tajikistan’s investment environment is improving rapidly but the residual reliance on the CIS Convention is one of the vulnerabilities that require transaction-level mitigation.
6. Enforcement against Turkmenistan in the country remains the hardest scenario in the region. The July 2025 New York Convention enforcement denial reinforces the recommendation that investors seeking enforceable protection against Turkmenistan rely on project-specific presidential decree commitments rather than treaty frameworks alone. Kazakhstan’s recent refusal to enforce the Gazprom-Naftogaz award and the decision of its own AIFC Court is likewise a warning sign that geopolitical considerations may override enforcement efforts in the region.

Conclusion

Central Asia’s investment protection architecture has entered a third-generation phase, characterized by more balanced and sophisticated BITs, a validated (if narrow) EAEU Treaty and 2023 CIS Agreement ISDS pathway, and growing regional arbitration capacity. The CIS Convention—once a pioneering multilateral instrument—has been effectively eclipsed by the EAEU Treaty and the 2023 CIS Agreement for its members and remains unreliable as an ISDS vehicle given the CIS Economic Court’s adverse advisory opinion and the judicial setting-aside of all three known awards. The region’s growing FDI flows demonstrate investor confidence in the improving framework, but the 10-year high in global resource disputes, domestic law reforms that restrict international arbitration access, and persistent enforcement gaps in Turkmenistan ensure that treaty structuring and dispute management remain high-stakes disciplines for any practitioner or investor active in this market.

Author: Anastasiya Ugale