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U.S. MINING FIRM SUES ARMENIAN GOVERNMENT
By Emil Danielyan and Astghik Bedevian
Radio Liberty, Czech Rep.
March 20 2007
A U.S. company mining gold in Armenia has initiated an international
arbitration of its bitter dispute with Environment Minister Vartan
Ayvazian whom it accuses of corruption and other violations of the law.
A lawyer for Global Gold Corporation said on Tuesday that the
Connecticut-based company has sued the Armenian government over
Ayvazian's controversial decision last year to revoke some of its
operating licenses.
"Global Gold is alleging that the Armenian government, through
the actions of its minister of environment, violated the bilateral
investment treaty between the United States and Armenia in multiple
respects," Ken Fleuriet of the London-based law firm King & Spalding
told RFE/RL by phone.
The dispute will be adjudicated by a panel of three arbiters to be
appointed by the International Center for Settlement of Investment
Disputes (ICSID), a Washington-based body affiliated with the World
Bank. The treaty cited by Fleuriet enables U.S. firms doing business
in Armenia to file lawsuits to ICSID tribunals, instead of going to
Armenian courts.
The row broke out a year ago when Ayvazian's ministry unilaterally
terminated Global Gold's licenses to carry out exploratory work at two
small gold deposits, accusing it of failing to honor its investment
commitments. The company rejected the accusations and argued that the
ministry's action contradicted an Armenian law on mining. An article
of the law stipulates that local and foreign mining companies can be
stripped of their licenses only by a court.
Top Global Gold executives claimed that Ayvazian turned on their
company in retaliation for its refusal to pay a $3 million bribe
allegedly demanded by him. The U.S. embassy in Yerevan expressed
serious concern at the allegations, raising the matter with the
Armenian government. Both Ayvazian and Prime Minister Andranik
Markarian dismissed them as baseless.
Although the Armenian authorities seem to have refrained from enforcing
the Environment Ministry decisions, Global Gold claims to have suffered
considerable losses and is seeking compensatory damages from the
government. "The damages or relief that Global Gold will be seeking
will be determined in the course of the proceedings," said Fleuriet.
"One the principal facts in the case is a request for a bribe that
was made by Mr. Ayvazian to representatives of Global Gold and was
refused by Global Gold," the lawyer said. "That is when a lot of the
various instances of misconduct in relation to the company began.
That includes refusals to grant licenses and exploration permits,
seizures and expropriations of various rights."
"Our understanding is that some of the rights have been lost and
others are in the process of being taken and sold to other companies,"
he added.
Fleuriet also said that Armenia's Ministry of Justice and embassy in
the United States have already been notified of the lawsuit. Ayvazian
confirmed this but refused to comment on possible consequences of the
extraordinary legal action. "I can only regret that they never tried
to use the legislation of the Republic of Armenia," he told RFE/RL.
Incidentally, Ayvazian spoke shortly after a meeting with President
Robert Kocharian. He said they did not speak about the Global Gold
lawsuit and discussed other "current affairs" instead.
By Emil Danielyan and Astghik Bedevian
Radio Liberty, Czech Rep.
March 20 2007
A U.S. company mining gold in Armenia has initiated an international
arbitration of its bitter dispute with Environment Minister Vartan
Ayvazian whom it accuses of corruption and other violations of the law.
A lawyer for Global Gold Corporation said on Tuesday that the
Connecticut-based company has sued the Armenian government over
Ayvazian's controversial decision last year to revoke some of its
operating licenses.
"Global Gold is alleging that the Armenian government, through
the actions of its minister of environment, violated the bilateral
investment treaty between the United States and Armenia in multiple
respects," Ken Fleuriet of the London-based law firm King & Spalding
told RFE/RL by phone.
The dispute will be adjudicated by a panel of three arbiters to be
appointed by the International Center for Settlement of Investment
Disputes (ICSID), a Washington-based body affiliated with the World
Bank. The treaty cited by Fleuriet enables U.S. firms doing business
in Armenia to file lawsuits to ICSID tribunals, instead of going to
Armenian courts.
The row broke out a year ago when Ayvazian's ministry unilaterally
terminated Global Gold's licenses to carry out exploratory work at two
small gold deposits, accusing it of failing to honor its investment
commitments. The company rejected the accusations and argued that the
ministry's action contradicted an Armenian law on mining. An article
of the law stipulates that local and foreign mining companies can be
stripped of their licenses only by a court.
Top Global Gold executives claimed that Ayvazian turned on their
company in retaliation for its refusal to pay a $3 million bribe
allegedly demanded by him. The U.S. embassy in Yerevan expressed
serious concern at the allegations, raising the matter with the
Armenian government. Both Ayvazian and Prime Minister Andranik
Markarian dismissed them as baseless.
Although the Armenian authorities seem to have refrained from enforcing
the Environment Ministry decisions, Global Gold claims to have suffered
considerable losses and is seeking compensatory damages from the
government. "The damages or relief that Global Gold will be seeking
will be determined in the course of the proceedings," said Fleuriet.
"One the principal facts in the case is a request for a bribe that
was made by Mr. Ayvazian to representatives of Global Gold and was
refused by Global Gold," the lawyer said. "That is when a lot of the
various instances of misconduct in relation to the company began.
That includes refusals to grant licenses and exploration permits,
seizures and expropriations of various rights."
"Our understanding is that some of the rights have been lost and
others are in the process of being taken and sold to other companies,"
he added.
Fleuriet also said that Armenia's Ministry of Justice and embassy in
the United States have already been notified of the lawsuit. Ayvazian
confirmed this but refused to comment on possible consequences of the
extraordinary legal action. "I can only regret that they never tried
to use the legislation of the Republic of Armenia," he told RFE/RL.
Incidentally, Ayvazian spoke shortly after a meeting with President
Robert Kocharian. He said they did not speak about the Global Gold
lawsuit and discussed other "current affairs" instead.