UZBEKISTAN Law and Practice Contributed by: Nodir Yuldashev, GRATA International law firm
• there is no contradiction as Article 240 of the Economic Procedural Code does not list corporate disputes as a type of dispute which is subject to resolution exclusively by Uzbek economic courts and, therefore, this kind of dispute can be resolved outside of Uzbekistan, including by arbitration courts. In the course of preparing this publication, the author has addressed the Supreme Court of Uzbekistan on provision of any information on judicial precedents or interpretation of the mentioned articles. The Supreme Court of Uzbekistan has informed the author that the matter has been accepted for analysis and legal review proposals to amend current legislation may be initiated. Currently, the majority of Uzbekistan lawyers recom - mend: • to indicate Uzbekistan economic courts generally as the dispute resolution authority and Uzbekistan law as the governing law in corporate agreements; or • provide a solution in the form of a hybrid provision indicating that all matters which constitute a corpo - rate dispute shall be passed to Uzbekistan eco - nomic courts under Uzbekistan law and matters constituting commercial disputes can be resolved elsewhere under any foreign law. Shareholders of LLCs and JSCs may decide to get their JV managed by a sole executive body, for exam - ple, a director, a president, or collegial executive body such as a board of directors. In addition to executive bodies, shareholders may also establish and appoint a supervisory board. The difference between the board of directors and the supervisory board is that the members of the board of directors are employed by the JV and are treated as employees of the JV. Mem - bers of the supervisory board are not employed by the JV but are appointed by shareholders to supervise activities of the JV from time to time and approve or make specific transactions and decisions, for exam - 7. The JV Board 7.1 Board Structure
ple, large-scale transactions or deals with affiliated persons. Therefore, members of the supervisory board are not treated as employees of the JV. Supervisory boards are usually appointed when there are several shareholders. Any foreign national may be appointed as a director, member of the executive board, or member of the supervisory board. If a for - eign national is appointed, a work permit is required to be received by each foreign employee. No work permit is required for foreign nationals appointed as members of the supervisory board as these persons are not treated as employees of a JV. Both in the board of directors (executive branch) and the supervisory board, members of the boards vote equally, each member having one vote. In the event of equal voting, the chairperson’s vote shall be decisive. 7.2 Duties and Functions of JV Boards and Directors Day-to-day management of a JV is conducted by either a sole executive body – ie, a director or presi - dent – or collegial executive body – ie, a board of directors. Shareholders are free to choose either option at their own discretion. If a sole executive body is appointed, the JV is managed by this individual who can act on behalf of the company without any power of attorney, manage all bank accounts and property of the com - pany, and execute deals and transactions on behalf of the company. A director’s rights can be limited by corresponding internal policies, an employment con - tract, provisions of the articles of association, JVA and other corporate documentation. Laws regulating the operation of LLCs and JSCs also contain limita - tions to directors’ powers in cases of agreements with affiliated transactions or large-scale agreements being signed. In these cases, the director will have to receive preliminary approval of the supervisory board or the approval of shareholders before this kind of deal can be executed. When a collegial executive body is created, share - holders establish the board of directors, where pow - ers and competence of each director are described and approved in internal corporate documentation;
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