Mher Abrahamyan: Court of Appeal has scheduled another hearing
The litigation on “B.M.L. Arzni” against “Anelik Bank” is still going on. The case is in the Court of Appeal due to the Bank’s appeal to reverse the general jurisdiction court decision on confiscation of a sum equivalent to USD 22 million from the Bank in favor of “B.M.L. Arzni” LLC. After holding 3 court hearings the Court of Appealscheduled publication of the decision on February 27, but informed, instead, about scheduling of another hearing on March 9. In this regard we had an interview with Mher Abrahamyan, Chairman of the Management Board of the Bank: - Mr. Abrahamyan, the Court of Appeal has scheduled another hearing on the well-known case. What are the reasons according to you and what expectations do you have in this regard? The Court of Appeal has examined the case quite thoroughly, addressed questions to both parties and listened to arguments. I have to say that the Court of Appeal is usually distinguished by the practice of examining cases in 1-2 trials. Nevertheless, in this given case, most probably, there are open questions for the court, with the expectation of receiving answers to which another hearing has been scheduled. The latter will be held on March 9 after which, we hope, the court will announce the decision. We are hopeful that as a result of thorough examination of the case, the Court of Appeal will make a fair decision with consideration of all the legislative norms. To be honest, it is because of the decision of the general jurisdiction court with violation of this very legislative norms that the case has appeared in the Court of Appeal. We have indicated a number of litigation and legislative violations bringing them to the attention of the Court of Appeal. - The appellate judgement is going to be the 4th in this years-long litigation. In fact, two decisions have been made against the Bank, and the Court of Appeal has already once reversed the decision of the general jurisdiction court. Which are the main contentious issues which you have been unable to reach consensus on? In order not to overburden the reader I would like to briefly state that the appeal refers to an agreement concluded in 2015. The bankrupt company “B.M.L. Arzni”, former owner of which and the real beneficiary of this process is Gevorg Afandyan, insists that the Bank has breached the concluded agreement, and we have all the proofs that the Bank did not violate any of the provisions of that agreement. According to the agreement, the Bank was obliged to sell the building of “Arzni” mineral water factory building to “B.M.L. Arzni” or an entity designated by the former within two years. Before expiration of the two-year period, the Bank sold the property to a company which was specifically founded for that purpose as a result of negotiations with G. Afandyan, 33% of shares of that company were given to Vahe Afandyan, G. Afandyan’s son, given without any investment, which I want to stress. There is communication available grounding all those negotiations. And now G. Afandyan insists that the Bank had sold the factory building to a third company, and that he was not aware of it. - You have repeatedly stated that this case is unprecedented and that it poses a risk to the banking system of Armenia and the investment environment in general. How, though, is the case unprecedented, and what is the danger? The case is unprecedented not only in terms of the amount mentioned in the lawsuit, but also in terms of unique interpretation of facts and legal manipulation. In general, the agreement in the scope of which the litigation is carried out, raises various questions among lawyers: the amount of the penalty, which is set at five times the value of the property according to the agreement, is already disputable. Moreover, taking into account the fact, that at the moment of the agreement the property was evaluated by different appraisers at maximum USD 2.5 million, then the penalty amount is more than ridiculous. The danger to the banking system and the investment environment of our country is first of all explained by the fact that foreign investments, unfortunately, have not been protected in our country, and even today, despite the reforms of the judicial system, we face a situation when courts pass arbitrary decisions without even taking into consideration the style and approached of the entity filing a lawsuit in the given case. Since this time the Court of Appeal has examined the case quite thoroughly, we hope that, nevertheless, the truth will be revealed and the decision will be based on it. At least, the Bank in its turn is taking all the necessary measures to ensure its regular activity and stability and to prevent the litigation process from affecting clients in any way. In general terms this, in fact, is a process unleashed on an investor that has great plans in Armenia, and the unfair decision of the court can have an adverse effect on the country’s investment environment. - According to media sources, businessman G. Afandyan has accumulated large debts to other 7 banks of Armenia, including the state budget: he has outstanding tax liabilities, which is quite a significant amount. Are law enforcement agencies interested in his activities? In order to give a clear answer it would be right to address the question to addressees, however, in terms of this specific case, our lawyers see certain signs of crime. We already have a package of documents almost ready, based on which we are planning to submit a report to the NSS. In terms of debts of businessman G. Afandyan and parties related to him – yes, I confirm that a lot of information on that can be found both in the media and other open sources, and many litigation processes are registered in the “Datalex” information system related to G. Afandyan or parties related to the latter. Moreover, there are judicial cases between G. Afandyan’s two companies, or, for instance, claims are submitted by a company and its bankruptcy manager in the scope of one and the same judicial case. The number of such artificial claims specifically against IDBank is 7. This not only overburdens the judicial system, but also indicates the irresponsible approach of the given businessman. That is the reason why we are planning to apply to the NSS with suspicions about presence of signs of crime within this case, irrespective of the decision of the Court of Appeal, however, our further steps depend on that decision; the Bank’s rating and liabilities towards our clients are of first priority for us.
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Information updated 10.03.2022 09:08
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