Stockholm arbitrator halts Armenia’s government takeover of Karapetyan-owned electricity grid

By Elen Muradyan

A Stockholm emergency arbitration tribunal has ordered the Armenian government to refrain from taking further steps to nationalize the country’s electricity grid from a company owned by jailed billionaire Samvel Karapetyan. The ruling, issued on July 22 by the Arbitration Institute of the Stockholm Chamber of Commerce (SCC), marks a major interim victory for Karapetyan’s legal team but does not resolve the underlying dispute.

The tribunal found that Armenia’s recent legislative and administrative moves against the Electricity Networks of Armenia (ENA), including the threat of expropriation, raise “serious doubts” as to whether the state is complying with its obligations under a 1995 bilateral investment treaty with Cyprus. ENA is majority-owned by Karapetyan’s Tashir Group, while a minority stake is held through Cyprus-registered Liormand Holdings.

The arbitrator imposed urgent interim measures, instructing the Armenian government to halt implementation of recently passed laws targeting ENA and to cease any steps that could result in the seizure or transfer of the company’s assets or licenses. “Absent such urgent relief,” the tribunal noted, “claimants could suffer irreparable harm.”

Karapetyan’s defense council welcomed the ruling as a “clear win,” asserting that the government is now barred from expropriating ENA, altering its management structure, or revoking its licenses. Narek Karapetyan, chairman of ENA’s board and vice president of the Tashir Group, said the ruling safeguards the company’s “normal business operations” and prevents further political interference.

The Armenian government issued a measured response, downplaying the tribunal’s decision as an “interim procedural measure” that does not affect the legality of appointing a temporary administrator to the utility. In its statement, the government claimed its actions were aimed at averting an energy crisis and safeguarding public order and national security. It did not say whether it would comply with the tribunal’s order.

A procedural win with legal implications

Under SCC rules, such emergency decisions are binding but temporary, and they lapse unless the full arbitration proceedings are formally launched within 30 days and handed over to a permanent tribunal within 90 days. The CivilNet fact-checking team confirmed with SCC officials that they could not confirm or deny the case due to confidentiality, in line with their regulations.

Legal expert Taron Simonyan cautioned that Armenia risks damaging its reputation if it disregards the order. “It sends the message that the country does not honor international rulings protecting investors, which could deter future investment and harm Armenia’s standing with institutions like the World Bank,” Simonyan told CivilNet.

The underlying arbitration claim, if initiated, would test whether Armenia’s actions constitute unlawful expropriation under the Armenia-Cyprus bilateral investment treaty and other international instruments such as the Energy Charter Treaty.

Tensions rise after Karapetyan’s defense of Church

The dispute traces back to a public political standoff between Karapetyan and Prime Minister Nikol Pashinyan. On June 17, Karapetyan issued a strongly worded defense of the Armenian Apostolic Church amid government calls for Catholicos Karekin II to resign. The following day, Armenian authorities raided Karapetyan’s Yerevan residence and arrested him on charges of making public calls to seize power.

Just weeks later, Armenia’s parliament passed controversial amendments enabling the state to install government-appointed administrators to ENA without a court order. A close ally of Pashinyan, Romanos Petrosyan, was soon appointed temporary administrator of ENA, prompting widespread concern from opposition lawmakers, economists, and legal scholars who argued the move was politically motivated and likely to trigger international arbitration.

Critics point to the timing of Karapetyan’s arrest and ENA’s takeover as evidence of retaliation. The government denies any link, maintaining that the measures are necessary for energy sector stability following alleged mismanagement by ENA—claims that the company firmly denies.