Large international investors filed lawsuits against the RA government. The citizen will have to pay hundreds of millions of dollars for political corruption
Armenia's ranking among international investors continues its consistent decline, in which the current authorities of Armenia have made targeted efforts. Today, a number of large companies have already submitted claims to the international arbitration court against the RA government, "Pastinfo" wrote.
Among them are "Sanitech International Group" company, "Amulsar Investor Venture" LLC, one of the shareholders of "Lydian International LLC", and the Swiss company Walnort Finance Limited LLC, which is a 12.5-% shareholder of ZPMK.
The sectoral interests of the mentioned companies are different, from garbage collection to gold, molybdenum, and copper mining, but all of them dispute the legality or criminal inaction of the RA government's actions after Nikol Pashinyan came to power, as a result of which international investors suffered major losses, but the bureaucrats' "smell" of incompetence we, the citizens, will pay for it.
"Sanitek" against the RA government
"Sanitech International Group" was the first company to announce its intention to file an investment lawsuit against the RA government.
On March 29, 2021, it was officially announced that Sanitek and all its shareholders, who are foreign investors, completed the next stage of their claim against the Republic of Armenia to the International Arbitration Court. "Foreign investors have already submitted their claim to the international arbitration court in accordance with Article 9 of the Agreement "On Promotion and Mutual Protection of Investments between the Government of the Republic of Armenia and the Government of the Republic of Lebanon" ("Lebanon-Armenia Investment Protection Agreement"), "Government of the Republic of Armenia and Article 13 of the Agreement between the Government of Canada on the Promotion and Protection of Investments (the "Canada-Armenia Investment Protection Agreement") and Article 36 of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, 2021 in the message released by the company on March 29, with which the Yerevan Municipality announced the termination of the contract in October 2019.
The investment arbitration claim was submitted to the International Center for Settlement of Investment Disputes (ICSID), a part of the World Bank Group, located in Washington. The claim was registered on April 6, 2021, and the hearings began on September 27 of the same year.
The company claims that the dispute stems from the discriminatory and expropriation actions of the Government of the Republic of Armenia, namely, the Municipality of Yerevan failed to fulfill its obligations under the contract and eventually removed Sanitek before the expiration of the concession contracts, replacing it with a state-owned garbage collection company. with company. "This approach was politically motivated, with the aim of making Sanitek a scapegoat to gain political advantage, accusing the municipality of strategic lapses in the management of the garbage collection sector and control over Sanitek," the international investors claim, noting that the state garbage collection company operates under much more favorable conditions than those provided to Sanitek; which once again shows that the attitude of the Armenian government towards foreign investors is arbitrary and discriminatory.
The arbitration process is coming to an end. The last hearings were held in December 2023. "Sanitech" has presented facts at the international court that as a result of the actions of the relevant authorities of the Republic of Armenia, the company has suffered major losses, and according to the estimation of various experts, it may be about 40 million dollars in compensation. The RA government has engaged lawyers, who, according to our sources, have already been paid 900,000 US dollars, but the positions of the official Yerevan are assessed quite weakly and the probability of success of "Sanitek" is high. The publication of the decision is expected this year. Of course, the government can appeal the defeat in the instance called "Appeals Committee", but its effectiveness reaches zero. In fact, we have a situation that is very similar to the processes related to Lydian and Zangezur, when some people increased their property in Armenia by several million dollars, and in return, as a result of court disputes, tens of millions of dollars will go from the taxpayers' pockets.
"Amulsar Investor Venture" against the RA government
At the end of January, the Permanent Chamber of the Arbitration Court (PCA) informed the Armenian side about the lawsuit filed by "Amulsar Investor Venture" LLC against the RA government. It was entered in 2023 and, in fact, is in the preparatory stage. This company disputes the actions of the RA government, or rather the inaction, that it did not fulfill its positive duty and did not prevent the steps aimed at obstructing the works of "Lydian International LTD".
"Lydian International EL TD" until 2020. In July, it became the parent company of the Lidian group of companies and owned 100 percent of the shares of "Lidian Armenia" CJSC. However, in July 2020, he was deprived of all shares of the Company.
As is known, it was this company that acquired and currently holds the mineral extraction permit (subsoil use right) in the gold-bearing quartzite mine of Amulsar, Vayots Dzor region. Moreover, to ensure the extraction, he made an investment of several hundred million US dollars, taking all the actions that depended on him for the operation of the mine.
After Nikol Pashinyan came to power, since June 2018, the roads to the gold-bearing quartzite mine in Amulsar have been blocked by activists, depriving the Company of all opportunities to exploit the mine. And in July of the same year, the RA CC announced that it had initiated a criminal case regarding the apparent incident of allegedly deliberately hiding information about environmental pollution by the officials of the RA Ministry of Nature Protection, and in 2021 it was announced that the initiated criminal case would be terminated. That said, the investigation of the criminal case initiated on fictitious grounds continued for 3 years, parallel to which the Police ignored the demands to remove the closure of the roads leading to the gold-bearing quartzite mine of Amulsar and to ensure the unhindered use of the roads by the company.
Since June 2018, the company has been deprived of the opportunity to exercise its right to subsoil use in that mine. In the permanent chamber of the arbitration court, the actions of the government itself are being contested today, as a result of which, according to the investor, he suffered significant losses.
As a result of the impossibility of exploiting the Amulsar gold-bearing quartzite mine, the company Lydian International LTD (Lydian International LTD) went bankrupt and in September 2020, by the decision of the Jersey court, the liquidation process began, as a result of which the company was dissolved.
As a result of all this, the shareholders of the first business listed on the international stock exchange in the history of Armenia (individuals and legal entities from Armenia and other countries), who had invested about 150 million US dollars, were deprived of their shares, in popular parlance, they were "thrown away". As a result, the RA government became a 12.5% shareholder of the Company, which was announced in January 2024. At the same time, it was mentioned in the government session that the operation was allowed.
The episodes of Prime Minister Pashinyan's statements are available on the Internet, when the latter sarcastically declares that the operation of the mine was not possible before, but now it is already possible. The prime minister does not stop proudly announcing that they are not taking away the stakes of the mining enterprises, but their owners are returning them to the people in the form of the government. The question arises whether it matters to the shareholders who have invested huge sums of money in this business and who lost them, to whom they will go as a result of the money they invested disappearing into the air. After the RA government received the Company's shares as a gift, everyone had reasonable suspicions that the whole purpose of delisting the company from the Canadian stock exchange, liquidating it and dispossessing the shareholders was to receive a share in Armenia in exchange for it, and that suspicion seems very real. Considering all this , according to the assessment of various experts, the probability of satisfying both domestic and international claims against the Government is extremely high. "Walnorth Finance Limited LLC" against the Government of the Republic of Armenia
The third large company, in relation to which a lawsuit will be filed against the RA government in international courts, is ZPMK.
In this case, one of the shareholders of the Zangezur copper-molybdenum combine, "Walnort Finance Limited LLC", which is a 12.5% shareholder, raised the issue of regular violation of rights.
2021 on September 30, it became known that ZPMK has a new shareholder in the form of Roman Trotsenko, a pro-Kremlin Russian billionaire. It turned out that the latter's company, "Industrial Company" joint-stock company, acquired 60% of the shares of the number one taxpayer of Armenia, Zangezur Copper-Molybdenum Combine (ZPMK), and hurried to donate 15% of the total capital to the RA government. The reason and conditions are not known to this day, at least no official explanation has been given as to why the new owner of the number one taxpayer of RA donated shares to Pashinyan's government.
The owner of 12.5 percent of the shares of ZPMK was previously the "Zangezur Mining" company, which in August 2021 submitted a claim to the court to give it preference to acquire the shares of ZPMK. In other words, if one of the shareholders decides to sell his shares, then his right to acquire them first must be respected. Perhaps Pashinyan's statements during the pre-election campaign for the extraordinary parliamentary elections of 2021 caused the shareholder reasonable and reasonable suspicion that the government would try to intervene, which later became a reality.
"Zangezur Mining" 2021 The court not only accepted the claim submitted on August 2, but also applied a means of securing the claim, putting 75% of the total shares of the Zangezur copper-molybdenum combine under a lien. However, on September 30, the court of general jurisdiction of Syunik marz convened a session in a few hours, and hours later, after the end of working hours, it became known that the shares have a new owner, in the form of "Industrial Company", a subsidiary of "Geopromining" LLC owned by Roman Trotsenko. JSC. And the latter donated 15% to the RA government late at night. Let's note that the deals were formalized at night, which became one of the reasons why this deal was called suspicious and the result of political corruption.
It should also be noted that at the time of formalizing the transaction, the decision of the court to remove the shares from the lien had not yet been officially published. It is true that later the appellate court considered the decision of the first instance court illegal and annulled it, but the deal was already formalized.
The current shareholder of 12.5% of ZPMK is the Swiss company Walnort Finance Limited LLC, which on October 17, 2023 notified the RA government about the decision to apply for international arbitration against Armenia. According to experts, there is a very high probability that Armenia will also lose to Walnort Finance Limited LLC in this case, which will cause a payment obligation of several hundred million dollars from the budget.
Although the cases listed above are different, they are also identical: the rights of the business owner were violated, the investor was deprived of his property as a result of illegal actions, in popular language, Pashinyan's government became a shareholder as a result of state racketeering. What kind of manager the government is was shown in the scandal related to ANIF. As we have already reported, the state control service revealed that the state funds were used inefficiently and were wasted, on the basis of which criminal proceedings were initiated.
In case of losing in the mentioned three cases, it will be about the compensation of millions of dollars. It turns out that the citizen pays for the officials to receive bonuses in order to cheat, deceive, bankrupt people, and take away business. Now you will say that the government has become a shareholder in large companies and will make a profit. They get profit, but not the state budget. In any case, at this moment, no income has been received from the shares acquired as a result of suspected corruption transactions, no profit has been redistributed. Instead, the circles close to the government have become suppliers-partners in these very profitable companies, they have acquired lucrative positions, for which the RA citizen will pay the penalty and fine of millions of dollars.
