LBKM Attorney Achieves Rare Annulment of ICSID Award
On July 21, 2023, an Annulment Committee at the International Centre for the Settlement of Investment Disputes (ICSID), revived the claims of Mr. Edmond Khudyan against the Republic of Armenia. The Committee also ordered Armenia to pay Mr. Khudyan’s legal fees and costs. The Committee was chaired by Sir Christopher Greenwood, former British judge on the International Court of Justice.
Mr. Khudyan, a U.S. citizen born in Iran, brought claims against Armenia under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (“ICSID Convention”), claiming that Armenia violated international law by failing to prevent the embezzlement of his investment in a real estate development. The ICSID Convention prohibits an investor from making claims against a state of which the investor is a national. The underlying tribunal declined jurisdiction over Mr. Khudyan’s claims because it found that the fact that Mr. Khudyan lived part of his youth in Soviet Armenia, in the Union of Soviet Socialist Republics (USSR), makes him a citizen of Armenia today.
The Annulment Committee annulled this award. It found that the “starting point” of the tribunal’s analysis contained annullable error because it consisted of an assumption – that Mr. Khudyan remained a citizen of Soviet Armenia (within the meaning of USSR law) after he left the territory and emigrated to the United States in 1989 – that was never established.
Since the first ICSID case was registered in 1972 until the end of FY2023, 420 awards were rendered under the ICSID Convention, and only 21 of them (or 5%) have been annulled in part or in full.
Alexander Bedrosyan represented Mr. Khudyan in the arbitration and annulment proceedings before joining Lewis Baach in May 2023.
IAReporter provides a full analysis of the annulment decision here (subscription may be required).