International law specialist Ara Ghazaryan has warned that the Armenian government's refusal to comply with an international arbitration ruling in the Electric Networks of Armenia (ENA) case could significantly impact the final outcome—posing a heavy financial burden on the state budget.
Speaking to Pastinfo, Ghazaryan stated, “Eventually, Armenia will propose a settlement, which will cost the state a substantial sum.”
He noted that disputes like this are not new in Armenia's legal history, referencing cases dating back to 2007, including the European Court’s ruling against Armenia and the 2008 “A1+” verdict. Similar situations have arisen globally, including a provisional ruling by the International Court of Justice against Azerbaijan.
Ghazaryan explained that when a state refuses to comply with a court ruling, it often starts reinterpreting it. “Governments invoke domestic laws or fictitious international principles, claiming they are not obligated to follow the ruling. But the reality is clear—if you’ve accepted the court’s jurisdiction under a treaty, the ruling is binding. No further interpretation is necessary,” he said.
He cited Israel’s disregard of the international court ruling on the Jerusalem wall as an example of political defiance of legal mandates. Yet, he emphasized that while countries may ignore rulings, from a legal standpoint, such decisions are mandatory—whether final, preliminary, or interim.
When asked about Armenia’s ongoing appointments in the HETS case, allegedly based on party affiliation, Ghazaryan stated that the property owner must continue the legal process until a final decision is reached. If the ruling favors the owner and the government does not propose a settlement, it must act according to the tribunal’s decision.
“By refusing to comply with the current ruling, Armenia assumes legal risks. Politically, this may affect foreign investment and the country’s reputation. Courts tend to view defiance unfavorably, which could increase the likelihood of Armenia losing the case,” he added.
According to Ghazaryan, Armenia will eventually propose a costly settlement to resolve the issue. “If property is seized, compensation is necessary. Armenia reportedly plans to transfer ownership while compensating current owners. But it must justify this with public interest grounds—which remain unclear.”
He criticized the government's explanation that power outages warranted changing the operator, arguing that such justification lacked urgency or societal backing. “This should have been a long-standing public debate—not a sudden decision imposed by the executive,” he concluded.
On July 22, the Stockholm Chamber of Commerce's emergency arbitration ordered Armenia to halt implementation of recently adopted legal provisions targeting HETS and suspend any further steps toward expropriation.
The Armenian government responded by saying that “the scope of the dispute differs from the objectives behind appointing a temporary manager,” asserting that Armenian law must also be respected alongside the tribunal's decision.
