Armenia ignoring Arbitration decision on ENA to increase national;  debt - expert 

ArmInfo.  The worst-case scenario if Armenia ignores the Stockholm Arbitration Court's decision will be the obligation to pay the full amount of the claim with interest,  which corresponds to the size of the country's annual healthcare  expenditures and will increase the level of public debt by at least  2.5-3 percentage points. This is what political scientist Suren  Surenyants writes in connection with the consideration of the  investment dispute around the Electric Networks of Armenia (ENA) by  the Stockholm Arbitration Court. In this vein, he cited several  examples of similar disputes that ended in the country's favor. 

Thus, in the case of "Yukos Oil Company v. Russia", the International  Arbitration Court ruled against the Russian Federation for more than  $50 billion for breach of contractual and legal obligations.  Occidental Petroleum v. Ecuador - the state was obliged to pay $1.77  billion for unilateral termination of the investment contract. And in  the case between Canadian mining company Gabriel Resources and  Romania, the company demanded $4.4 billion to stop a gold mining  project. And although the case is still ongoing, it is already  causing a serious blow to the country's investment reputation,"  Sureniants noted.

Touching on the scenarios that await Armenia, the political scientist  noted that they could be less damaging to the country. The best  scenario, according to him, would be reaching a compromise, as a  result of which the amount would be reduced to 100-150 million  dollars. "This is, of course, a big burden, but it can be handled,"  the political scientist believes.

A less favorable scenario, but also possible, Sureniants called the  arbitration court's decision to oblige Armenia to pay about half of  the claim in the amount of 250 million dollars. "This will amount to  about 3% of the state budget expenditures and, possibly, will lead to  a reduction in funding for state projects or the attraction of new  debt," the political scientist noted.

However, Sureniants noted that in any case, Armenia will already face  a new financial and image crisis, which will become a serious test  for the government.

Recall that the head of the group of companies "Tashir" Samvel  Karapetyan, who was jailed for his support of the Armenian Apostolic  Church, and his family have won an arbitration case against the  Armenian government over the nationalization of ENA. The case was  heard by the Arbitration Institute of the Stockholm Chamber of  Commerce (SCC) on the basis of the Agreement between Armenia and  Cyprus on the Promotion and Reciprocal Protection of Investments of  January 18, 1995. The court ruled that Armenia must refrain from  implementing the amendments recently adopted by parliament to the  laws "On Energy" and "On the Public Utilities Regulatory Authority",  as well as from any further steps aimed at seizing ENA assets.

However, the Armenian government has stated that the Stockholm  arbitration ruling will not be implemented. Meanwhile, there is an  opinion that such a decision will cause irreparable damage to the  country's image and make it less attractive for foreign investment.