Armenian Government to Pay $3.2 Million to U.S. Law Firm Over Case Against Businessman Samvel Karapetyan

The Armenian government will pay $3.2 million to a U.S. law firm to defend itself in an international legal case over the national electric company. The company, Electric Networks of Armenia (ENA), is owned by Samvel Karapetyan, a jailed businessman and critic of Prime Minister Nikol Pashinyan.

Pashinyan promised to “quickly” nationalize ENA on June 18, just hours after Karapetyan was arrested. Karapetyan had criticized Pashinyan’s campaign against the Armenian Apostolic Church. On July 2, the Armenian parliament approved a law allowing the government to take temporary control of ENA before fully nationalizing it or changing its owner.

Later in July, Karapetyan’s company, Tashir Group, started international arbitration in Stockholm. The company says the government’s actions are illegal and is seeking up to $500 million in compensation. Tashir denies government claims that it mismanaged the electricity network, saying the accusations are part of a political attack on Karapetyan.

The Arbitration Institute of the Stockholm Chamber of Commerce (SCC) ordered the Armenian government to stop taking ENA from Tashir, changing the company’s top management, or canceling its license until the case is decided. Despite this, the government replaced ENA’s top executives with members of Pashinyan’s Civil Contract party and other government allies.

The Armenian cabinet later announced that it hired Arnold & Porter, a U.S. law firm specializing in international arbitration, to represent the government in the Stockholm case. The firm will be paid $3.2 million.

Infrastructure Minister Davit Khudatyan said the government is confident it will win. Some legal experts in Armenia, however, believe Tashir is more likely to succeed. They say the government’s refusal to follow the SCC injunction may increase Tashir’s chances.

Tashir is asking for money equal to 5.5 percent of Armenia’s yearly budget. Experts say taking ENA could harm Armenia’s business reputation and push away foreign investors.

Tashir says it has invested at least $700 million in ENA since buying it from Russia’s RAO UES in 2015. The company also says it has reduced losses and kept electricity prices steady since the purchase.

Karapetyan, who has mostly lived in Russia since the 1990s, was first charged with calling for a violent overthrow of Pashinyan’s government. He also faces charges of tax evasion, fraud, and money laundering. Karapetyan denies these charges and has stated he wants to fight for regime change in Armenia. 

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