Azerbaijan “sued” Armenia: Possible Consequences, Deadlines, Compensation

Azerbaijan initiated an interstate arbitration process against Armenia in the Permanent Court of Arbitration on the basis of the Energy Charter Treaty, by which it demands financial compensation from Armenia, in their wording, “for the illegal exploitation of energy resources in Nagorno-Karabakh and Eastern Zangezur”.

It is about the “illegal exploitation of the hydropower resources of Azerbaijan” by Armenia during the period of “occupation” of “Azerbaijan territories” in the period from 1991 to 2020.

According to the official Baku, Armenia illegally operated the Tartar HPP located on the Sarsang reservoir, built 37 small hydroelectric power plants in the “occupied” territories, in which the produced electricity was exported to Armenia. Baku also claims that Armenia illegally operated the Chardaghli coal mine, as well as dismantled the Evlakh-Nakhijevan gas pipeline, as a result of which the gas supply to the autonomous republic was stopped.

On 18 January, 2023, the Republic of Armenia was notified by the Republic of Azerbaijan regarding the initiation of arbitration proceedings against the Republic of Armenia within the framework of the Bern Convention “On the Protection of European Wildlife and Natural Environment” (Bern Convention).

Office of the Representative on international legal matters expressed its regret regarding the mentioned proceedings, adding that Azerbaijan has decided to initiate a legal process on the basis of such a document, the main purpose of which is to “promote…”cooperation” between states aimed at “conserving wild flora and fauna and their natural habitats”.

Davit Khachatryan, a specialist in international public law, said in an interview with Iravaban.net that Azerbaijan demands full compensation for damages, as well as the suspension of certain actions, in particular, the operation of two mines and the operation of one hydroelectric power plant. The second demand, in fact, is meaningless, because the territory where the above-mentioned objects are located is currently under the control of Azerbaijan.

As a rule, tribunals and courts first examine the question of their jurisdiction in a given case based on the objection of the responding party or on their own initiative. It is noteworthy that only the given tribunal or court can make a decision or judgment regarding its jurisdiction. The case is examined only in the case of confirmation of jurisdiction, and, essentially, a decision is made.

Experts find it difficult to specify the amount of monetary compensation. Determining the amount of the alleged damage caused is a matter for other stages of the proceedings.

For example, on 9 February, 2022, the International Court of Justice issued a verdict in the case “Democratic Republic of Congo v. Republic of Uganda”.

In the decision, among other compensations the court ruled on the compensation of damages to the Congo for the exploitation of its natural resources.

“In the mentioned case, the court has foreseen a compensation of about 60 million dollars, which Uganda should pay to the Congo. The applicable law here is different; the court here awarded compensation for Uganda’s illegal exploitation of Congo’s natural resources. In our case, I have no information about how much compensation is required from Armenia. In addition, there is also the problem of representation and court costs, which can reach several hundred thousand dollars,” Davit Khachatryan said.

However, this is a completely different case, with different circumstances and in different legal frameworks, and drawing direct parallels would not be correct.

According to the expert of international public law, in order for Azerbaijan’s claim to be satisfied, the tribunal must find that the actions cited by the plaintiff are attributable to Armenia.

In response to the question whether it is about occupation, Khachatryan said that the international courts, as well as the UN Security Council, have never decided that Armenia occupied the territories of Azerbaijan, about which Yeghishe Kirakosyan, the RA Representative on International Legal Issues, also spoke in court.

“The legal framework regulating occupation is regulated by customary law, as well as by IV Hague Convention, IV Geneva Convention and Additional Protocol I to it,” he said.

Speaking about the final decision of the court, Khachatryan noted that the trial may last for years, as the process started not long ago.