Baku has filed an arbitration case against Yerevan under the Energy Charter Treaty (ECT), an international agreement focusing on cross-border cooperation primarily in the fossil energy industry, for exploiting energy resources in the Karabakh region, which was under 30 years of Armenian occupation.
“In a Notice of Arbitration served on Armenia, Azerbaijan seeks redress and financial compensation for Armenia’s violation of Azerbaijan’s sovereign rights over its energy resources during Armenia’s nearly 30-year illegal occupation of Azerbaijan’s territory from 1991 to 2020,” a statement by the Azerbaijani Foreign Ministry said on Monday.
The statement said Armenia breached multiple provisions of the ECT, as well as fundamental principles of international law, by denying Azerbaijan from accessing its energy resources in the region, exploiting Azerbaijan’s energy resources for its own benefit and depriving Azerbaijan of further developing its energy resources.
Armenia’s initiatives in this regard include the exploitation of the Karabakh region’s hydropower resources and facilities, and the construction of at least 37 additional unauthorized hydropower facilities, the statement added.
“To facilitate its illegal exploitation of Azerbaijan’s hydropower, Armenia established a ‘whole unified system’ of electricity distribution from the formerly occupied territories to Armenia, ‘regulated from Armenia’ the ‘daily volume of electricity production,’ and granted putative ‘licenses’ to energy companies to operate the region’s existing facilities,” the ministry said.
According to the statement, Armenia also exploited Azerbaijan’s coal resources by “constructing additional energy infrastructure on Azerbaijan’s territory” and damaged existing facilities.
“This arbitration case is an effort to secure justice and reparations for nearly 30 years of illegal exploitation and expropriation of Azerbaijan’s energy resources by Armenia, on Azerbaijan’s internationally recognised sovereign territory,” the statement said.
Relations between the two former Soviet republics have been tense since 1991, when the Armenian military occupied Nagorno-Karabakh, a territory internationally recognized as part of Azerbaijan, and seven adjacent regions.
In the fall of 2020, during 44 days of heavy fighting, Azerbaijan liberated a significant part of Karabakh, and a Russian-brokered peace agreement was subsequently signed. A normalization process is ongoing since then, but several bilateral issues still remain unresolved.
Last month, Azerbaijan filed a similar lawsuit for inter-state arbitration under the Bern Convention, aimed at holding Armenia accountable for the "extensive destruction" of the environment and biodiversity in Karabakh.