ARMENIA Law and Practice Contributed by: Mesrop Manukyan, Maria Petrosyan, Grigor Grigoryan and Anahit Sargsyan, MB Legal
MB Legal 37 Hanrapetutyan Street, 4th Floor Yerevan 0010 Armenia Tel: +374 41 241244 Email: info@mblegal.am Web: mblegal.am
1. Dispute Resolution Methods 1.1 Main Dispute Resolution Methods The primary method for resolving commercial dis- putes in Armenia remains civil litigation within the state judicial system. The Armenian judicial hierarchy consists of courts of general jurisdiction and special- ised courts, such as the Bankruptcy Court and the Anti-Corruption Court, which handle specific catego- ries of commercial and state-related matters. These proceedings are governed by the Civil Procedure Code of the Republic of Armenia (the main legal act regulating civil procedural relations) as well as certain special laws – eg, the Law on Bankruptcy. Commercial arbitration is a highly utilised alternative for domestic and international commercial disputes. It provides a private, expert-led mechanism for par- ties who wish to avoid the public nature of the state courts, and allows one to avoid the lengthy proceed- ings usually required in state courts. The legal frame- work for arbitration is modernised and based on the UNCITRAL Model Law on International Commer- cial Arbitration, allowing parties to resolve conflicts through ad hoc arrangements or permanent arbitral institutions. Mediation in Armenia has undergone major reforms since 2022, transforming it into one of the core mechanisms of alternative dispute resolution (ADR), designed to facilitate amicable settlements through the assistance of a neutral third party. The Law on Mediation regulates the activities of licensed media- tors and provides a structured environment for nego- tiation. Mediation can be initiated voluntarily by the parties or, in certain circumstances, mandated by the
court or specific legislation. Currently, mediation in Armenia is mandatory in some family law disputes, aimed at reducing court backlog and encouraging col- laborative resolution. 1.2 Choice of Dispute Resolution Method Litigation remains the default and most popular mech- anism for dispute resolution due to the established nature of the court system and the direct enforceability of judicial acts. Most standard commercial disputes, including contract breaches and property issues, are filed in the courts of general jurisdiction. Specialised courts are popular for their technical expertise – for instance, the Bankruptcy Court has exclusive jurisdic- tion over insolvency proceedings, ensuring a focused approach to complex debt restructuring. In some instances, parties turn to the Bankruptcy Court to recover straightforward monetary debts as the legal security measures available within bankruptcy pro- ceedings tend to be more effective than those offered by the courts of general jurisdiction. Arbitration is chosen in both local and international commercial contracts and large-scale investment pro- jects where parties prefer a neutral venue and the abil- ity to select arbitrators with specific industry knowl- edge. The popularity of arbitration is supported by the judiciary’s “pro-arbitration” stance, where courts generally respect the finality of arbitral awards. Mediation is gaining traction in family and labour law and is increasingly used for small-to-medium com- mercial claims. In some instances, such as disputes involving financial organisations, parties may be required to approach the Financial System Mediator
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