Prime Minister Nikol Pashinian pledged to “quickly” nationalize the national power distribution network, Electric Networks of Armenia (ENA), on June 18 hours after Karapetian was arrested following his strong criticism of the premier’s campaign against the Armenian Apostolic Church. Karapetian’s Tashir Group launched arbitration proceedings in Stockholm later in July as the government began enforcing a hastily enacted law allowing it to take over ENA’s management before nationalizing the electric utility.
Pashinian’s cabinet decided on August 21 to hire the U.S. law firm Arnold & Porter to represent it during the Stockholm tribunal’s consideration of the ENA case. It cited the firm’s strong record of winning international arbitration rulings in favor of governments.
Following a weekly session in Yerevan, Pashinian’s cabinet said that because of a “conflict of interest” it will sign the $3.2 million contract with another American firm, Foley Hoag, for the ongoing arbitration proceedings in the Swedish capital. A government statement on the meeting did not elaborate. Foley Hoag has already represented in Armenia in some of its lawsuits against Azerbaijan brought before the International Court of Justice.
The Armenian Ministry of Justice declined to comment on the unexpected decision, saying that the matter is beyond its scope of responsibility. Pashinian’s critics are bound to speculate that Arnold & Porter may have told the government that its chances of winning the arbitration battle are slim.
In an interim win for Karapetian, the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) ordered the Armenian authorities in July to refrain from confiscating ENA from Tashir, changing ENA’s top management or revoking its parent company’s operating license pending a verdict in the case. The authorities ignored the order, refusing to reverse their decisions to replace the top company executives.
The chief government lawyer representing Armenia in international courts, Liparit Drmeyan, was sacked last week after it emerged that he warned the authorities in Yerevan to comply with the SCC order.
“I am the government ... no one can have a position that contradicts my position,” Pashinian said the day before Drmeyan’s sacking.
Karapetian’s representatives say Pashinian’s statement only increased Tashir’s chances of winning the arbitration case. The tycoon’s conglomerate headquartered in Moscow is seeking $500 million in damages for what it calls an illegal “expropriation” of its biggest asset in Armenia.
Tashir has dismissed government allegations that it has mismanaged Armenia’s electricity distribution network, saying that they are part of Pashinian’s politically motivated crackdown on Karapetian. The latter pledged to set up a new opposition group and fight for regime change following his arrest.