Investment Firm Sues Armenia Over Railway Deal

A Dubai-based investment company has filed a lawsuit with the International Court of Arbitration, demanding that the Armenian government pay it compensation in the amount of $160 million related to the planned construction of an Armenia-Iran railway.

Rasia FZE, which is registered in the United Arab Emirates, has undertaken to build the rail link.

The information about the international lawsuit against Armenia was confirmed on Tuesday by Minister of Transport, Communications and Information Technologies Ashot Hakobian.

According to the minister, the company claims that it incurred losses as a result of the actions of the Armenian side. “We believe that this is not logical. The reason is that during this period with the purpose of supporting the project representatives of the Armenian government were in China where this issue was also discussed. And Rasia FZE today cites some reasons, saying that this affected their further programs,” the minister explained.

Plans for construction of a railway linking Armenia and Iran were announced in 2008 by then-President Serzh Sarkisian. Before the 2013 presidential election a concession contract was signed with Rasia FZE. Since then, however, the company has not built a single meter of railway.

“The company only prepared a feasibility report and submitted it to the Ministry, and the Ministry made numerous remarks on it. After that, the company was repeatedly invited to discuss the implementation of its concession obligations, but all the invitations remained unanswered,” said Hakobian.

The minister is convinced that the Armenian government has solid arguments in case of litigation. “I think that our positions are strong and there is no cause for concern. However, we will not be doing nothing. Measures are being taken. The government has already invited a prestigious international organization to defend our interests,” Hakobian said.

The governments of Armenia and Iran have discussed the railway project for more than a decade. So far, however, Yerevan has failed to attract an estimated $3.2 billion needed for building the 305-kilometer-long Armenian section of the railway.