Government and Karapetyan family diverge on meaning of arbitration decision

By Lia Avagyan

The Armenian government and the family of billionaire Samvel Karapetyan are offering starkly contrasting interpretations of an August 4 decision issued by the emergency arbitrator of the Arbitration Institute of the Stockholm Chamber of Commerce. While government officials say the arbitrator rejected new motions filed by the owners of the Electricity Networks of Armenia (ENA), the Karapetyans argue that the arbitrator reaffirmed the binding nature of an earlier ruling.

On July 29, the Karapetyan family and Cyprus-based Liormand Holdings Limited submitted a request asking the arbitrator to clarify the Armenian government’s obligations under the emergency decision issued on July 22. They also called for the restoration of the status quo as of the date of their initial application and for an obligation to report on the steps taken to comply with the ruling.

According to the government’s August 3 statement, the arbitrator “fully rejected the claimants’ request on the grounds that it introduced new demands and that the requested provisional measures fell outside the arbitrator’s jurisdiction and authority.”

However, in a statement published the same day by the Karapetyan family, their legal team stressed that the arbitrator had not amended or supplemented the July 22 decision—precisely because, in the arbitrator’s view, the existing order was already sufficiently clear and remains binding and immediately enforceable for the Armenian government.

“The emergency arbitrator decided not to entertain the request for clarification or supplementation, thereby reaffirming that the July 22 order is already mandatory and must be implemented without delay by the Republic of Armenia,” the family said in the August 4 statement.

Karapetyan’s representatives also accused the government of continuing to defy the arbitration ruling, including by removing senior staff from ENA in what they called a breach of the arbitrator’s ban on interference with the company’s management.

Background

The ENA dispute erupted in mid-June after Karapetyan publicly defended the Armenian Apostolic Church and Catholicos Karekin II, whom Prime Minister Nikol Pashinyan wants to unseat. Days after his statement, Karapetyan was arrested on charges of making public calls for the unconstitutional seizure of power.

Shortly thereafter, the government launched a legislative push towards nationalization of ENA and moved to take over its operations. On July 22, the Stockholm emergency arbitrator issued an order barring the Armenian government from proceeding with the takeover. The ruling prohibited any changes to the utility’s management, the appointment of new administrators, or other forms of interference.

Despite the arbitration ruling, Armenian officials, including Prime Minister Pashinyan, have continued to claim that the state’s actions are aimed at improving the quality and reliability of electricity supply. Pashinyan has also suggested that ENA’s management could eventually be transferred to a private operator, similar to arrangements made in the water sector.