Dispute between Lydian and Armenian government serious signal for big investors: Alexander Khachaturyan

Lydian International Limited announced that, in connection with the ongoing blockades of road access to the Amulsar Gold Project, Lydian U.K. Corporation Limited and Lydian Canada Ventures Corporation, subsidiaries of the Company, have formally notified the Government of the Republic of Armenia of the existence of disputes with the Government of Armenia.

Under the UK BIT, Lydian UK may submit the dispute to international arbitration three months after such formal notification, and under the Canada BIT, Lydian Canada can do so after six months. In the meantime, the Government of Armenia has an opportunity to continue amicable discussions with Lydian with a view to the prompt settlement of the disputes.

Aysor.am has conducted interview with Alexander Khachaturyan, the consultant to former Prime Minister Karen Karapetyan.

- Mr Khachaturyan, do you consider the start of arbitration process possible in the created situation?

- Of course, I do. I suppose the listed company would not make such statement if it has not viewed that possibility very seriously. It is necessary to remember that Lydian is listed company and each its action influences on the value of shares. We must understand that such listed company will not maneuver. We must not think that it is just a tactical maneuver.

- Mr Khachaturyan, what consequences will the arbitration process have for Armenia’s economy?

- It is obvious that few days before the statement Fitch international rating organization referred to Lydian in its publication, besides ambassadors of few countries have also referred to it, and it is a sign for big investors. Big investors will refer to it.

It is necessary to know: if to go deeper into it and understand how the big investors make a decision to make investments in any country, we will understand that there are people there who are dealing with the assessment of risks of the country.

It means that when a board of any big company decides to come to Armenia and make investments, it has interior and foreign consultants who assess the risks of the country, including political and economic ones.

This people do not suffer from Armenian patriotism at all. They objectively read the rating documents and form conclusions which will indeed, fix that a company having made 300-400 million investments declares about disputes with the Armenian government. Of course, it will not affect the decisions of small and medium-sized investors as they pay attention more to general economic situation, consumption volumes.

It is a very important moment when it is necessary to soberly evaluate the situation, all the pros and cons. The government must make a decision whether to accept or reject the dispute and negotiate.