Armenian lawyer tells `price` of failure to comply with arbitration decision on ENA

ArmInfo. In international law,  unlike domestic law, there is no enforcement service, that is, there  is no body that would ensure the execution of a decision if the  defendant refuses to comply with it, and today the Armenian  authorities take advantage of this. This opinion was expressed on her  Facebook page by legal expert Gohar Meloyan in connection with the  Armenian government's ignoring the decision of the Stockholm  Arbitration Court on Electric Networks of Armenia (ENA) CJSC.

In this regard, the legal expert drew attention to the fact that in  the case where the plaintiff applies to the court or arbitration and  simultaneously petitions for the application of measures to secure  the claim, and the court, in turn, satisfies this petition, then this  is positive news for the plaintiff, but negative for the defendant.  As Meloyan explained, this means that the Armenian authorities should  have already taken some action to return control over ENA to the  owner.

"In this context, the most difficult issue remains, which is the  Achilles heel of International Investment Law and International Law  in the current world order and legal order: the execution of  decisions of International Courts and Tribunals," the lawyer  emphasized.

As Meloyan noted, in this case the question is what is the "price" of  non-compliance with the arbitration award. In this regard, she drew  attention to the fact that there are similar precedents in  International Investment Law, and assured that the study of all these  cases shows that states are forced to comply with the decisions of  the Arbitration Court sooner or later if the plaintiff seeks to  restore their violated rights.  "From the analysis of the Civil  Procedure Code of Armenia and the Law of Armenia "On Commercial  Arbitration", it becomes obvious that in very limited cases a  decision may be made not to implement the decision of the Stockholm  Arbitration until the said decision is recognized by the country's  court," Meloyan is sure.

In this vein, she noted that there are already rumors that the  authorities will try to use the provision "on contradiction to public  order" provided for in subparagraph "b" of paragraph 2 of part 1 of  Article 36 of the Law "On Commercial Arbitration", claiming that the  decision of the aforementioned arbitration is contrary to the  sovereignty of Armenia.

However, as Meloyan noted, in the International Investment Law the  provision on "contrary to public order" has always been and will be  interpreted in a narrow sense, since otherwise any state can refuse  to implement unwanted arbitration decisions, referring to a broad,  spatial and manipulative interpretation of this provision.

""Limitation of sovereignty" can never be referred to as "contrary to  public order", since Armenia, having signed the relevant agreement  with Cyprus and having delegated disputes arising from it, has  already assumed obligations to limit its sovereignty in this matter.  That is, by ratifying the Convention "on the Recognition and  Enforcement of Foreign Arbitral Awards", Armenia has given consent to  the execution of international arbitration decisions in disputes  arising with Cypriot investors," the lawyer explained.

In this vein, she noted that in this situation there is no other  solution than restoring the rights of businessman Samvel Karapetyan  and recognizing the actions of the Armenian government as illegal,  despite the attempts of the Armenian authorities to continue their  illegal actions.

Recall that the head of the Tashir Group of Companies Samvel  Karapetyan and his family won the arbitration dispute against the  Armenian government on the nationalization of ENA. The case was heard  at the Arbitration Institute of the Stockholm Chamber of Commerce  (SCC) on the basis of the Agreement between Armenia and Cyprus on the  Promotion and Reciprocal Protection of Investments of January 18,  1995. The court ruled that Armenia is obliged to refrain from  applying the amendments recently adopted by parliament to the laws  "On Energy" and "On the Public Services Regulatory Authority", as  well as from any further steps aimed at seizing ENA assets.

However, the Armenian government stated that the decision of the  Stockholm Arbitration Court will not be implemented. The statement of  the Armenian Cabinet of Ministers, in particular, emphasizes: "While  respecting the interim measures applied by foreign arbitration  decisions, everyone must be guided by the legislation of the Republic  of Armenia and international treaties establishing the rules and  procedures for the recognition and enforcement of arbitration  decisions."