Republic of Armenia put on notice of investment dispute for its actions against Samvel Karapetyan and Electrical Networks of Armenia

YEREVAN, July 1. /ARKA/. Samvel Karapetyan, a prominent businessman and a founder of Tashir Group, one of the largest group of companies in Eastern Europe, together with his family, sent a notice of investment dispute to the state officials of the Republic of Armenia.

The notice was sent under the Agreement for the Promotion and Reciprocal Protection of Investments between the Republic of Armenia and Cyprus signed on 18 January 1995.

This Agreement provides for the possibility of investors whose rights are violated by the state to file a claim before the reputable international arbitration to bring the state to responsibility. Such proceedings vividly and negatively influence the investment attractiveness of the country.

The claims of the Karapetyan family arise out of the campaign that the Prime Minister started against Samvel Karapetyan and his business assets in Armenia.

By way of background, in early June 2025, the Prime Minister Nikol Pashinyan accused the Catholicos of All Armenians of moral failings and called for his defrocking. Samvel Karapetyan, as a long-time supporter of the Armenian Apostolic Church, publicly defended the Church in his interview.

The reaction of the Prime Minster to Karapetyan’s words did not take long. Nikol Pashinyan published several threatening Facebook posts aimed at Karapetyan, and immediately after, on 17 June, police raided Karapetyan’s home. Karapetyan was arrested and unlawfully charged with making a public call to overthrow the government. On 18 June, the First Instance Criminal Court of Yerevan ordered two months pre-trial detention of Karapetyan.

The same day, the Prime Minister announced that “Electric Networks of Armenia” CJSC, a company beneficially owned by the Karapetyan family, including through Liormand Holdings Limited (Cyprus), will be nationalized.

Following the Prime Minister’s post, the state machinery including and not limited to various representatives of the ruling faction of the Parliament, was quickly mobilized to pressure ENA and take control over it as soon as possible. In just a couple of days, the draft laws allowing state hostile takeover of ENA were developed and submitted to the National Assembly of RA. Upon direct request-statement of the Prime Minister, an extraordinary session of the National Assembly will take place on 1 July 2025.

The notice of investment dispute serves as a preventive mechanism. In the notice, the Shareholders argue that the actions of the RA state officials are arbitrary, discriminatory, politically motived and aimed at dispossessing the Karapetyan family of ENA. As such, these actions breach several commitments taken by the Republic of Armenia in the Armenia–Cyprus investment treaty of 18 January 1995, which state officials are obliged to respect.

First, the Armenian state officials failed to guarantee fair and equitable treatment as well as full protection and security to the Karapetyan family and their investments in Armenia. Second, in violation of the investment treaty, the RA state officials are taking measures to take over ENA, which would amount to expropriation.

If the responsible state officials of RA proceed with those violations of its obligations under the Agreement and international law, it will face international arbitration proceedings and be ordered to pay full compensation.

Because of similar, however less intensive actions of RA state officials - at present, the Republic of Armenia is already facing three separate investment arbitration lawsuits filed by investors from Cyprus, the United States, Canada and Lebanon. All of these cases stem from the Armenia’s unlawful actions to expel foreign investors and obstruct them from freely exercising their legal rights.

Former head of the Ministry of Finance Vardan Aramyan told the ARKA news agency that the deal to nationalize the Electric Networks of Armenia will break the "backbone" of the country's economy and scare away investors - both domestic and foreign.

According to his estimates, the legal consequences of the planned nationalization are quite severe. Aramyan explained that according to the law, in the event of the nationalization, a foreign investor is compensated for the cost of the nationalized property (today, ENA with all its assets has about 337 billion drams, or $870 million).

Economist Hrant Mikaelyan said that the process of nationalization of ENA is initially compromised from a political point of view. According to him, businesses will begin to "try on" the situation for themselves and if they notice at least some risk that their assets will be taken away, they will think about leaving Armenia.

Doctor of Economics Tatul Manaseryan, commenting on the situation with ENA to the ARKA news agency, noted that there is no law On Nationalization in Armenia, so in such conditions, talking about nationalization is simply elementary illiteracy. Manaseryan added that from the point of view of the functioning of the country's economy, it is difficult to even imagine what consequences the nationalization of such an object as "Electric Networks of Armenia" will have.

Tigran Jrbashyan, Director of Management Consulting at Ameria, believes that with the appropriate legislative framework, as envisaged in Armenia, the government can effectively control infrastructure management by regulating tariffs, setting standards, ensuring quality and transparency.

According to him, in such conditions, a step towards nationalization is an extremely risky decision that could undermine investor confidence and lead to costly international disputes.

Electric Networks of Armenia CJSC is part of the Tashir Group of Companies, operating medium and low voltage distribution networks and serving about 1 million subscribers.

Since 2016, Tashir Group of Companies has been invested about $680 million in the modernization of Elseti Armenia alone, and another $150-200 million was invested in the creation of new capacities. By 2034, it is planned to increase the total volume of investments in the energy system of Armenia to 540 billion drams (almost $1.4 billion). -0-