Armenian Investors of Hydro Power Plants Under Azerbaijani Control Initiate Proceedings Against Baku

Following the 44-day war, Armenian investors of small hydro power plants (HPPs) that came under Azerbaijani control are set to initiate international arbitration proceedings against Azerbaijan, claiming that Baku has seized and expropriated their property due to military actions in 2020. This was reported by Global Arbitration Review, a leading specialized site tracking international arbitration.

The notice was submitted on December 5 on behalf of 19 Armenian owners of small HPPs. According to the site, the interests of the Armenian investors are represented by the prestigious New York law firm Willkie Farr & Gallagher.

Among the legal team of the plaintiffs in Yerevan are attorneys from the law office of former Minister of Justice David Harutyunyan and independent lawyer Norayr Babajanyan from Yerevan.

According to Global Arbitration Review, the claim concerns 18 small HPPs located in the Martakert, Lachin, and Kelbajar regions, which the owners believe Azerbaijan has expropriated in violation of several provisions of the European Energy Charter. The document, signed in 1991, also provides for mechanisms to resolve international disputes in the energy sector, either through the Stockholm Arbitration Institute or a special arbitration body established for a particular claim. It is still unclear which option will be chosen in Azerbaijan's case.

According to the reporter from Global Arbitration Review, a three-month period will follow the notice, after which the official start of arbitration proceedings may only be initiated.

Sources from the site indicate that the compensation claim presented to Azerbaijan by the plaintiffs amounts to several hundred million dollars. Global Arbitration Review also reports that the small HPPs in question are currently included in the state company AzEnergy.

The site recalls, "Before 2020, the regions under the control of Artsakh witnessed significant infrastructural investments, particularly in the renewable energy sector. The region was energy self-sufficient and began exporting electricity to Armenia in 2018."