Measures blocking ENA transfer remain in force

PanARMENIAN.Net - Lawyers representing Liormand Holdings Limited, a shareholder of Electric Networks of Armenia (ENA), have stated that measures prohibiting the transfer of ENA remain in force and that “any new unlawful action by the Armenian government will entail liability.”

The statement notes that the decision to split the proceedings does not predetermine the outcome of the current stage and cannot be viewed as confirmation of the state’s legal position.

It also states that the arbitration proceedings concerning the transfer of Electric Networks of Armenia are moving to the stage of reviewing Armenia’s jurisdictional objections.

According to the statement, on June 16, 2026, the arbitral tribunal examining the investment dispute related to ENA’s transfer issued a procedural decision to divide the proceedings into two separate phases.

“In the first phase, the tribunal will examine the jurisdictional objections submitted by the Armenian government. Upon completion of this phase, the tribunal will proceed to consider the merits of the dispute, including the legality of the state’s actions and issues related to liability for the expropriation of investments.

The division of proceedings into phases is a common practice in international investment disputes that involve a large number of contested issues. At the same time, the decision adopted is purely procedural in nature and does not indicate that the tribunal has found Armenia’s arguments justified or subject to approval.

On the contrary, in its June 16, 2026 decision, the arbitrators explicitly stated that, for the purposes of this decision, the tribunal was not required to make a substantive determination regarding those objections. Moreover, had it done so, the tribunal would have been subject to justified criticism for allegedly undertaking an improper and premature assessment of the merits of those objections.

Accordingly, the question of whether the Armenian government’s jurisdictional objections are well-founded remains open and will be addressed separately. The decision to divide the proceedings does not predetermine the outcome of this phase and cannot be interpreted as confirmation of the state’s legal position.

Furthermore, the division of proceedings initiated at the request of the Armenian government may significantly increase both the duration and cost of the arbitration. If the tribunal rejects all jurisdictional objections and ultimately upholds the investor’s claims on the merits, the additional costs resulting from the two-stage process may be imposed on Armenia.

The investors continue to pursue full protection of their rights in international arbitration and remain confident in the validity of their claims concerning investments that have allegedly been expropriated or devalued.

The interim measures adopted in July last year, which prohibit Armenia from taking any action aimed at transferring ENA, remain in force. Accordingly, any new unlawful action by the Armenian government against ENA and its shareholders, including nationalization of the company, would violate those measures and give rise to Armenia’s international legal responsibility,” the statement says.

On June 17, the government announced that the Stockholm arbitration tribunal had granted Armenia’s request to bifurcate the proceedings in the claim filed by Liormand Holdings Limited and the Karapetyan family.

During the preliminary phase, the tribunal will separately examine Armenia’s jurisdictional objections, including the government’s argument that the claimants do not meet the “investor” status requirements established by the relevant international agreement.