Major Investment Dispute Against Armenia: Company Suffers $38 Million Loss

On October 6, 2021, a notification was sent to the Government of the Republic of Armenia by foreign investors from the Russian Federation and the Federal Republic of Germany, representing the company "Ansiur Invest" LLC, expressing their intention to appeal to an international arbitration court in accordance with several agreements on the promotion and mutual protection of investments. This was detailed by the company, according to media reports.

The investment dispute arises from the fact that, despite Armenia's international obligations to guarantee the legal protection and security of foreign investments, these investments have been subjected to indirect unlawful expropriation, resulting in approximately $38 million in damages to the investors.

Foreign citizens made significant investments aimed at conducting construction works in the center of Yerevan, particularly near the "Cascade" area on Forest Street. However, since 2008, it has become apparent that foreign investors have been deceived by their local partners, who have embezzled substantial amounts in millions of dollars that had been invested in the joint business. Moreover, Armenia, through its law enforcement agencies and judicial system, has failed to make sufficient efforts to ensure the legal protection and security of these investments, as well as to restore the violated rights of foreign investors.

Furthermore, upon learning that the auction services intended to present the disputed property located at 1081, 108/2, 116, 116/3, and 112/2 Forest Street in Yerevan for compulsory electronic auction, the foreign investors appealed to the Government of the Republic of Armenia on December 17, 2021, requesting a suspension of the public auction. They argued that this property is the subject of the dispute, and its realization would inevitably create problems for both the investors and buyers, as the land is included in the claim of the foreign investors and will be subject to confiscation, regardless of who holds possession of it at the time.

However, there has been no response from the government regarding both the prior notification and the request to suspend the auction. As a result, the rights of foreign investors continue to be violated and remain unremedied by Armenia. The Government of the Republic of Armenia continues to pursue a "closed-door" policy towards investments, which does not encourage the establishment of a favorable investment and business environment.

Auroranews.am contacted the government’s press office for clarification. They requested that a written inquiry be submitted.