Could Armenia face a treaty claim for targeting electric utility?

By Toby Fisher

The article was originally published on Globalarbitrationreview.com

25 June 2025 - Commentators have warned that Armenia could face international arbitration if it proceeds with a plan to nationalise an electric utility owned by an embattled Russian-Armenian billionaire – who is already pursuing a separate ICSID (International Centre for Settlement of Investment Disputes) case against France over the seizure of his assets.

Armenian Prime Minister Nikol Pashinyan announced yesterday that the state is “ready” to bring Electric Networks of Armenia (ENA), the country’s main electricity distribution company, into public ownership.

While Pashinyan said the nationalisation would take place in accordance with Armenian law, the plan has prompted speculation that it could expose the state to an investment treaty claim.

Russian-Armenian billionaire Samvel Karapetyan holds a 70% stake in ENA, while the remaining 30% interest is held by Cyprus-registered Liormand Holdings – which press reports have linked to Karapetyan’s Tashir Group.

While Karapetyan’s Armenian nationality would presumably be an obstacle to him bringing a treaty claim against the state in his own right, commentators cited in local press reports have pointed out that Liormand could bring a claim under the Cyprus-Armenia bilateral investment treaty. The BIT has been in force since 1998 and provides for disputes to be referred to ICSID, ICC or SCC arbitration. Armenia and Cyprus are also parties to the Energy Charter Treaty.

Pashinyan has accused ENA of causing a “near energy crisis” in Armenia following major power cuts last year, which the company has denied.

However, sceptics say the planned expropriation is politically motivated. On the same day Karapetyan was charged in Armenia with "making public calls to overthrow the government,” Pashinyan announced plans to “quickly” nationalise his company.

Armenian diplomat and politician Edmon Marukyan has accused the government of attempting to “legitimise” the “unlawful seizure of private property as a public policy initiative,” arguing that it is impossible to nationalise ENA in compliance with Armenian law and its international obligations.

Karapetyan’s arrest came amid a battle between Pashinyan’s liberal government and the conservative Armenian Apostolic Church, which have been at odds for years over the state's handling of the Nagorno-Karabakh conflict with Azerbaijan.

This month, Pashinyan called for the head of the church to resign, claiming to possess evidence that he had fathered a child despite his vow of celibacy. The church has not responded to the accusation but claims Pashinyan is attempting to “silence” it.

Karapetyan publicly put his weight behind the church last week, saying he would be willing to “intervene" in the government’s “campaign” against the institution. That led the prime minister to issue what was widely interpreted as a coded warning to Karapetyan, who was arrested the next day on charges of making public calls to overthrow the government.

Karapetyan denies wrongdoing and is appealing his arrest. He is also preparing to bring a claim before the European Court of Human Rights over alleged “illegal interference” in the criminal proceedings, according to his lawyer Armen Ferroyan.

The billionaire is already pursuing a treaty claim against France that was registered by ICSID earlier this month after his real estate assets were seized as part of a money laundering investigation. He has accused French authorities of a "politically motivated" campaign to seize and confiscate assets of businessmen associated with Russia. The claim is brought under the Armenia-France BIT.

He is represented in that ICSID case by Pinna Goldberg, which declined to comment for this report. Armenia’s justice ministry and ENA were contacted.