BILATERAL INVESTMENT TREATIES AND INVESTOR-STATE DISPUTE SETTLEMENT IN AZERBAIJAN AND CENTRAL ASIA

Abstract:

This thesis critically examines the evolution and contemporary practices of Bilateral Investment Treaties (BITs) and Investor-State Dispute Settlement (ISDS) mechanisms in Azerbaijan and five Central Asian republics: Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, and Turkmenistan. Following independence from the Soviet Union, these states utilized BITs to attract foreign direct investment (FDI), particularly in extractive and strategic industries. Early treaty practice emphasized investor protections such as Fair and Equitable Treatment (FET), Most-Favoured-Nation (MFN) clauses, and access to international arbitration. However, the practical deployment of ISDS has revealed substantive and procedural shortcomings, including vague treaty drafting, limited regulatory space, and imbalanced commitments. This article maps convergences and divergences in treaty formulation across the region using comparative legal analysis and evaluates current reform efforts influenced by UNCITRAL Working Group III and Environmental, Social, and Governance (ESG) considerations. The study concludes with targeted policy recommendations aimed at modernizing the regional investment law framework to ensure alignment with contemporary international standards and sustainable development imperatives.