The Arbitration Institute of the Stockholm Chamber of Commerce (SCC), in an expedited decision on July 22, ordered Armenia to refrain from seizing the assets of Electric Networks of Armenia CJSC, thus stymying recent moves by the Armenia government to nationalize the country’s electricity distribution utility.

The SCC, founded in 1917, is one of the world’s leading dispute resolution institutions. 

The Armenian parliament, on July 3, by a vote of 65-27, approved a government-backed bill to nationalize the country’s electricity distribution utility - Electric Networks of Armenia (ENA).

The vote, at the bill’s second parliamentary hearing, gave the green light for the bill to go to the desk of PM Nikol Pashinyan for signing.

ENA is partially owned by the Tashir Group, a holding corporation owned by Samvel Karapetyan who was recently arrested on charges that he made public calls for people to “seize power and to overthrow the country’s constitutional order.”

The Armenian government argues its involvement in ENA is driven by potential energy disruption concerns and is not politically motivated. Many, however, disagree and claim the move to nationalize ENA is in retaliation for Karapetyan’s support of the Armenian Apostolic Church.

Following the Armenian government’s move to seize the ENA, the Karapetyan family, which owns 60.8% of the utility) and Cyprus-registered Liormand Holdings Ltd. filed an arbitration  request with the SCC․

SCC emergency arbitrator Patrik Lindfors demanded that the Republic of Armenia:

• Not to change the members of the governing bodies of the ENA.
• Not to amend the charter of the ENA.
• Not to appoint an interim administrator of the ENA, or if appointed, not to authorize him to act as the executive body of the ENA.
• Not to revoke the licenses of the ENA.
• Not to announce and organize auctions for the sale of ENA shares.
• Not to seize or alienate the assets of ENA.
• Not to restrict the regular activities of the ENA in any other way.

The SCC rejected an appeal by the applicants that the Armenian government release of Samvel Karapetyan from detention.

Armenian Minister of Justice Srpuhie Galyan told reporters today that the SCC decision may conflict with Armenia’s “public order” and hinted that the Armenian government  may choose not to comply with the SCC decision.

Galyan described the decision as “provisional, adding that the Armenian government will present its opinions when the arbitration process formally begins.

Armenia is a signatory to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (commonly known as the New York Convention), which obligates member states to enforce foreign arbitrational awards, except in limited cases such as conflict with public policy or if it is not valid under the governing laws of one of the parties.

Under SCC rules, the expedited decision will remain in effect only if full arbitration is formally initiated within thirty days and passed to a permanent tribunal within ninety days. If these steps are not taken, the interim measures lapse.

Top photo: Samvel Karapetyan, Armenian PM Nikol Pashinyan