THE AUTHORS:
Margot Lamare, LL.M. Graduate at Lausanne University
Vincent Alm, LL.M. Candidate at Stockholm University
Where industry thrives, trade and arbitration follow. Fuelled by major infrastructure development, growing energy projects, and sustained foreign investment, the Caucasus and Central Asia are entering a new industrial landscape, where dispute resolution is becoming increasingly important. As competition among arbitral seats intensifies, two questions remain central: how should parties approach the choice of arbitration seat and institution, and how may regional legal developments affect arbitration and the prospects for enforcement?
To discuss these issues, the Caucasus and Central Asia Arbitration Series and the SCC Arbitration Institute (“SCC”) co-organised an event on 11 September 2026 hosted by Mannheimer Swartling in Stockholm alongside the Swedish Arbitration Days. The discussion featured speakers Ardak Idayatova, Partner at Kinstellar in Kazakhstan; Feruza Bobokulova, Partner at MY LAWYER in Uzbekistan; Elchin Mammadov, Solicitor, Lawyer and Arbitrator in Azerbaijan; George Svanadze, Senior Partner at Andersen in Georgia; Kristine Khanazadyan, Partner at Equity Law Partners in Armenia; Fredrik Ringquist, Partner at Mannheimer Swartling; and Jake Lowther, Specialist Counsel at the SCC.
The event was moderated by co-founders of the Caucasus and Central Asia Arbitration Series: Ketevan Betaneli, Betaneli Arbitration, and Shirin Gurdova, International Arbitration Practitioner, both based in Paris.
The Choice of the Arbitration Seat
The choice of an arbitration seat involves several interconnected considerations. The speakers first considered (i) the factors that shape this choice, before turning to (ii) Stockholm’s established regional connection and the SCC’s role. They then examined (iii) the legal implications of the seat, before concluding with (iv) the recognition and enforcement of arbitral awards.
Factors Influencing the Choice of Arbitration Seat
The choice of seat is primarily shaped by the nature of the project, the parties involved, and, increasingly, the cost. For large-scale infrastructure and energy projects, particularly those involving international financial institutions, established international seats and institutions remain common across the region.
In Kazakhstan, Idayatova identified Stockholm, London and Paris as common choices, while noting the growing use of the Astana International Financial Centre (“AIFC”). In Uzbekistan, Bobokulova followed up by pointing to similar patterns with Paris and Vienna for major internationally financed projects, noting that Chinese counterparties may favour seats in Asia.
The panel then highlighted the growing role of regional alternatives. Svanadze referred to the increasing use of the Georgian International Arbitration Centre (“GIAC”), particularly in infrastructure projects. Khanazadyan then described a developing domestic arbitration market in Armenia, although established seats such as Paris, Vienna, and Stockholm remain frequently used. Turning to Azerbaijan, Mammadov recalled Stockholm’s historical connection with the region and the continued importance of the London Court of International Arbitration (“LCIA”), alongside more recent use of the Singapore International Arbitration Centre (“SIAC”), and the International Chamber of Commerce (“ICC”). He underlined that cost was becoming an increasingly relevant consideration, particularly for lower-value disputes, as companies increasingly seek less expensive arbitral institutions.
Stockholm and the SCC: An Established Regional Connection
Given its prominent and longstanding role as a ‘bridge between East and West’, it is no surprise that Stockholm emerged throughout the discussion as a seat with longstanding ties to the Caucasus and Central Asia. Lowther shared SCC statistics demonstrating that Stockholm remains a preferred seat among SCC cases involving parties from the region.
Between 2015 and 2025, the SCC administered 79 cases involving at least one party from the Caucasus or Central Asia, approximately 89% of which were seated in Stockholm. In 2025, the SCC registered 213 cases involving parties of 50 nationalities, with a total amount in dispute of approximately EUR 4.6 billion.
Lowther further noted that choosing Stockholm does not necessarily mean choosing Swedish law, and vice versa. Among the SCC’s Caucasus and Central Asia cases, Swedish substantive law applied in only around 11% of cases, compared with 39.5% for English law, alongside Kazakh, Georgian, Uzbek and other laws accounting for 36.9%. English was the language of approximately 96% of proceedings, with the remaining cases conducted in Russian.
Following this overview, Lowther also outlined the procedural flexibility offered by the SCC Rules, including standard and expedited proceedings and the Emergency Arbitrator mechanism. Of the region’s cases, 75 were conducted under the SCC Arbitration Rules, while three were Emergency Arbitrator proceedings. Given the region’s cost concerns, Lowther set out the time limits for rendering the final award. The SCC Arbitration Rules provide for a six-month time limit, while the SCC Rules for Expedited Arbitration provide for a three-month limit. The time limit for the Emergency Arbitrator’s decision is five days.
The Legal Implications of the Seat
The choice of seat determines the legal framework within which an arbitration is conducted and supervised, including the lex arbitri governing the proceedings, and the extent to which the courts at the seat may intervene.
As Svanadze illustrated through a case study from his practice involving Swedish, English, and Georgian procedural law, the interaction between different procedural regimes can add complexity to an arbitration. The courts at the seat may intervene both during the proceedings, and after an award has been rendered. Challenges to arbitrators, for example, may require consideration of the applicable standards of independence and impartiality.
Idayatova then illustrated how the law and practice of the seat can shape the treatment of such issues through a case from Kazakhstan. In AIFC Court Case No. 33 of 2023, the Court considered a challenge to an arbitrator based on a prior professional relationship with counsel. The challenge was ultimately rejected, in a decision that Idayatova noted was broadly endorsed by the local and international arbitration community. This underlines the importance of selecting an independent, respected, and neutral seat and framework for dispute resolution.
Betaneli added a further illustration from recent case law. The Swedish Supreme Court has recently confirmed in Zaza Okuashvili v. Georgia (Case No. T 9380-24), which concerns a Stockholm-seated SCC case, that a most-favoured-nation (“MFN”) clause can in principle found a host state’s consent to arbitration in a forum drawn from another treaty. The decision reinforces both the significance of the choice of seat and the region’s continued trust in Stockholm and the SCC as a forum for resolving such disputes.
The assessment should not, however, be limited to the legal environment at the time of contracting. Ringquist stressed the importance of considering how that environment may develop over the life of a project. Of course, it was also noted that the relevant horizon differs between contracts lasting five or ten years and shorter-term arrangements. For long-term projects, the stability and future development of the seat’s legal and judicial environment may therefore be as relevant as its position at the time of contracting.
Khanazadyan traced how Armenian case law on the validity of arbitration agreements and arbitrability has evolved since the Law on Commercial Arbitration was adopted in 2006. She illustrated this with two judgments of the Court of Cassation. In 2014, in Civil Case No. EKD/1910/02/13 (18 July 2014), despite a clause covering “all disputes” and expressly excluding the ordinary courts, the Court held that a claim to invalidate a transaction belonged exclusively to the courts. The judgment was widely criticised and led to amendments to the Civil Procedure Code. In 2023, by contrast, the Court of Cassation, in Case No. t7/23193/02/20, upheld a Court of Arbitration for Sport (“CAS“) arbitration clause in a dispute involving a professional football player, even though the player, as an employee, could have been treated as the weaker party. In the same decision, the Court confirmed that arbitration is itself a legitimate form of protecting rights. The pendulum has clearly swung towards a more arbitration-friendly approach. But, as she pointed out, being arbitration-friendly is not the same as being predictable. The next chapter for Armenian courts is consistency: parties should be able to trust that “all disputes” will not mean “all disputes, unless the court later decides otherwise“.
Recognition and Enforcement
The relevance of the seat does not end once an award is rendered. Betaneli explained that the procedure for recognition and enforcement may depend on whether an award is treated as domestic or foreign in the jurisdiction where enforcement is sought.
In Georgia, applications concerning domestic awards are brought before lower courts, while recognition and enforcement of foreign awards fall within the jurisdiction of higher courts. These courts have different competences and approaches, meaning that the classification of an award as domestic or foreign, depending on the choice of the seat, may also affect its prospects of enforcement.
Bobokulova then emphasised the importance of the courts’ approach to arbitration agreements. In her experience, Uzbek courts generally recognise interim measures granted in support of foreign-seated arbitrations and may stay proceedings brought in breach of an arbitration agreement.
The Regional Legal Landscape
Having considered the choice of arbitration seat and its legal implications, the focus moved to a more specific regional issue: the so-called ‘Lugovoy Law’ and its implications for arbitration in Central Asia.
Gurdova moved the discussion to Federal Law No. 171-FZ of 8 June 2020 (“the Lugovoy Law”), which introduced Articles 248.1 and 248.2 into the Russian Arbitrazh Procedural Code. She described these provisions as a response to foreign restrictive measures, designed, among other things, to protect Russian individuals and companies affected by such measures.
Three principal effects emerged. First, the provisions may protect sanctioned Russian parties who, according to the Russian authorities, may face difficulties accessing justice abroad. Secondly, they can confer exclusive jurisdiction on the Russian commercial courts even where the parties have previously agreed to resolve their disputes through foreign arbitration or before a foreign court. Thirdly, the Russian courts may issue anti-suit or anti-arbitration injunctions ordering parties not to commence or continue proceedings abroad, backed by potentially significant monetary sanctions.
The discussion of the Lugovoy Law proceeded in three stages, through an interview with Idayatova, beginning with (i) its implications for Kazakhstan, followed by (ii) the enforcement of foreign arbitral awards, and concluding with (iii) the practical considerations for foreign investors.
The Lugovoy Law and Beyond: The Kazakh Perspective
The discussion of the Lugovoy Law raised the broader question of whether the Russian approach could affect other jurisdictions, with a focus on Kazakhstan.
A key example was the case of RusChemAlliance (RCA) v. Linde. In that case, RCA sought recognition and enforcement in Kazakhstan of a Russian court judgment. The application was rejected on a threshold procedural ground, as the judgment debtors were not registered in Kazakhstan. The court did not decide whether the judgment was contrary to Kazakh public policy or Kazakhstan’s obligations under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (“New York Convention”). As Idayatova explained, although Kazakhstan has refused an attempt to enforce a Lugovoy judgment, it has not yet decided whether Lugovoy judgments are substantively enforceable in Kazakhstan. She further noted that in the absence of reported cases, there remains uncertainty, and not an absence of risk.
This uncertainty is particularly relevant given Kazakhstan’s participation in the Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Matters (2002) (“Chisinau Convention”), which provides a framework for the recognition and enforcement of judgments between participating CIS states, while Kazakhstan and Russia are also parties to the New York Convention.
Idayatova subsequently drew attention to the distinction between these two regimes. The New York Convention concerns arbitration agreements and arbitral awards, and it does not establish a general regime applicable to foreign state court judgments. Accordingly, where the judgment is a Russian state court judgment, the relevant framework for recognition and enforcement may be the Chisinau Convention rather than the New York Convention.
The Chisinau Convention itself, however, may provide an additional ground for refusing enforcement of Lugovoy judgments, beyond the public policy exception. Article 59 of the Convention permits refusal where there is no document confirming the parties’ forum selection agreement. As jurisdiction under the Lugovoy Law arises by operation of Russian law rather than by agreement of the parties, this could potentially provide Kazakh courts with a separate basis for refusing recognition and enforcement of such judgments.
Enforcement of Foreign Arbitral Awards
The analysis then moved from the enforcement of Russian court judgments to the separate, but closely related issue of enforcing foreign arbitral awards in Kazakhstan. Idayatova referred to the proceedings in National Joint Stock Company Naftogaz of Ukraine v. Gazprom PJSC. In that case, Naftogaz sought recognition and enforcement in Kazakhstan of an ICC arbitral award. At first instance, the AIFC Court granted the application and ordered enforcement of the award on an ex parte basis. However, following the jurisdictional objections, the Court subsequently concluded that it lacked jurisdiction to recognise and enforce the foreign-seated award. The case illustrates both the potential and the limits of the AIFC Court as a route for enforcing foreign arbitral awards in Kazakhstan.
The issue is not confined to Naftogaz’s case. Idayatova also drew on her own practice of attempting to enforce an ICC award against a state-owned company in Kazakhstan. The state court refused enforcement on the basis that there was no evidence that the award had been notified to the defendant, a ground which, according to her, was not expressly provided for under the New York Convention. As in the Naftogaz case, the foreign company sought to enforce the ICC award through the AIFC Court but was refused on similar grounds. The case is now due to be heard on appeal, and the legal community is closely following its outcome.
Practical Implications for Foreign Investors
Gurdova concluded by raising the practical question: how should foreign companies approach enforcement where the Lugovoy Law or similar measures may affect a dispute?
Idayatova responded by underlining the importance of anticipating enforcement issues before a dispute arises. She explained that foreign investors should assess where the counterparty’s assets are located, which entities within the corporate structure own those assets, and in which jurisdictions enforcement may ultimately be possible. In short, foreign investors should consider their possible enforcement strategy even before a dispute arises, including the mapping of assets.
In this context, the location of assets may be as important as the choice of arbitration seat or arbitral institution. A carefully drafted arbitration agreement may provide an effective dispute resolution mechanism, but its practical value ultimately depends on the availability of assets against which an award or judgment can be enforced. Enforcement considerations should therefore form part of the initial arbitration strategy.
Key Takeaways
The discussion yielded several practical takeaways. The choice of arbitration seat remains shaped by the nature of the project and the parties involved, but cost is an increasingly important factor, and regional alternatives such as the AIFC and the GIAC are gaining traction alongside established international seats. Stockholm’s position in the region remains well established, with approximately 89% of the SCC’s Caucasus and Central Asia cases over 2015–2025 seated there. Moreover, choosing Stockholm does not necessarily mean choosing Swedish law, with English law governing nearly 40% of cases.
The panel also emphasised that the choice of seat should be forward-looking: for long-term projects, the stability of the seat’s legal and judicial environment may be as relevant as its current framework. On enforcement, the Lugovoy Law introduces a layer of complexity, and while Kazakhstan has so far refused enforcement of a Lugovoy judgment, the substantive enforceability of such judgments remains untested. The speakers agreed that enforcement considerations, including the mapping of the counterparty’s assets, should form part of arbitration planning from the outset.
Against this background, the SCC’s longstanding ties to the region and continued involvement in cross-border disputes underline its role as an established and accessible forum for the resolution of commercial disputes in the Caucasus and Central Asia.
