Law 18:11 24/02/2024 Armenia

Armenia Hires U.S. Law Firm in Amulsar Arbitration Case; Government Refuses to Reveal Contract Price

The United Nations Commission on International Trade Law (UNCITRAL) panel has begun hearing a U.S. investor’s treaty claim against Armenia over the controversial Amulsar gold mining project that has been blocked for years by environmental protesters.

Armenia has hired the services of the prestigious U.S. law firm Foley Hoag, but Pashinyan’s administration refuses to reveal what it’s paying to the firm, arguing “case confidentiality.”

The contract doesn’t appear on ARMEPS, the Armenian government’s online procurement’s ystem.

Hasmik Samvelyan, Press Secretary of Armenia’s Office of the Representative for International Legal Affairs, told Hetq that the Foley Hoag contract has not been published in the Armeps system since the case is being conducted under conditions of confidentiality. When asked to reveal the contract price, she argued this too is confidential.

The Permanent Court of Arbitration (PAC) is providing administrative support in the case “Amulsar Investor Ventures LLC v Republic of Armenia”.

In March 2019, Lydian International, the company that fully owned the mine then, informed the Armenian government that it was launching an arbitration claim for losses incurred due to the “illegal closure” of roads leading to the mine by environmentalists. (The mine site that straddles the Vayots Dzor-Syunik provincial border in southern Armenia.)

The mine has stood idle for years because of conflicting environmental impact studies and public protests. The Pashinyan administration, which came to power in 2018, originally opposed mining at Amulsar A year later, in an about-face, announced that the mine would not harm the environment and ordered police to remove the demonstrators.

Armenian Minister of Economy Vahan Kerobyan, last February, announced that the government has signed a $250 million deal with Lydian Armenia CJSC to restart operations at the controversial Amulsar gold mine.

The deal, a memorandum of understanding signed between the Armenian government Armenia, the Eurasian Development Bank and Lydia Armenia, will pump US$250 million into the Amulsar project to complete construction work and purchase mining equipment. The Armenian government will get a 12.5% stake in Lydian Armenia in return for allowing the mine to reopen.

In 2021, Lydian International was dissolved since its subsidiary, Lydian Armenia, wasn’t meeting its contractual obligations to its senior lenders, funding partners and equipment suppliers. The mine was idle, no money was coming in.

Lydian Canada Ventures, which took over Lydian Armenia, is owned by the U.S. firm Orion Mine Finance, and the Canadian company Osisko Gold Royalties.  

Much isn’t known about Amulsar Investor Ventures LLC, the plaintiff in the arbitration case. The company was registered in 2022 in the state of Delaware (U.S.) USA. The demands of the claimant in this case from the Republic of Armenia have not yet been published.

In addition to Foley Hoag, Armenia’s Office on International Legal Matters is also representing the government in Yerevan.

Foley Hoag has represented Armenia in the past in arbitration cases. In 2021, Armenia paid the legal firm US$1.5 million in an arbitration case against the Lebanese company Sanitek over a contractual dispute. The Yerevan Municipality had awarded Sanitek the contract for garbage disposal in the Armenian capital. Sanitek accused the municipality of non-payment and the municipality accused the company of doing a poor job and not fulfilling its obligations.

Photo: Hetq

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