Armenia on Collision Course with Court Over Energy Nationalization

The Armenian government, led by Prime Minister Nikol Pashinyan, is signaling its intent to defy an international arbitration ruling, escalating a high-stakes conflict over the planned nationalization of the country’s main power utility, Electric Networks of Armenia (ENA). The move pits Yerevan against the company’s owner, tycoon Samvel Karapetyan, and risks significant legal and financial fallout for the nation.

The dispute intensified after an emergency arbitrator from the Arbitration Institute of the Stockholm Chamber of Commerce issued a temporary injunction, ordering the Armenian government to halt any steps toward seizing ENA. The ruling stems from recently passed laws on energy and public services regulation that pave the way for the nationalization. While the measure is a temporary stopgap, not a final verdict, Karapetyan’s camp has framed it as a major victory.

In a sharply worded statement, the oligarch’s son, Karen Karapetyan, derided the government’s pro-Western foreign policy pivot. “I hope you are still enjoying the taste of Brussels sprouts and Parisian croissants,” he said, adding, “Our own Constitution… obliges Armenia to comply with the decisions of international courts.” Narek Karapetyan, the tycoon’s nephew and Chairman of the ENA board, urged the authorities to “be guided by European values and implement the lawful court decision as soon as possible.”

However, the government in Yerevan appears undeterred. A statement from the Cabinet of Ministers indicated that while it respects foreign arbitration decisions, all parties must be guided by Armenian legislation. Justice Minister Srbui Galyan further clarified that Yerevan could refuse to enforce the ruling if it is deemed to contradict the country’s “public order,” a legal loophole that could render the Stockholm decision ineffective within Armenia.

The situation is further complicated by the government’s conflicting demands. Mesrop Mesropyan, Chairman of the Public Services Regulatory Commission, stated that ENA is still obligated to fulfill its long-term investment program, which runs until 2034. This effectively means the government expects Karapetyan to continue pouring money into a company it is actively trying to expropriate.

According to political analyst Tigran Kocharyan, Prime Minister Pashinyan has staked his political future on the nationalization effort and cannot afford to retreat. “Pashinyan has gone all-in. He is not looking at the law or the possible consequences,” Kocharyan noted. He warned that if the government backs down now, it will disappoint its core supporters, but defying the international court will ultimately harm the country, which may be forced to pay substantial damages for the seizure of ENA.