ARMENIA Trends and Developments Contributed by: Mesrop Manukyan, Maria Petrosyan, Grigor Grigoryan and Anahit Sargsyan, MB Legal
notable for its mandatory nature for the business and legal communities, effectively creating a “paperless” commercial litigation environment. Institutionalisation of Arbitration and Mediation Armenia has successfully transitioned from a juris- diction that was sceptical of non-state justice to one that is focusing on the institutionalisation of arbitration and mediation. This trend is anchored by the Law on Commercial Arbitration, which is based on the UNCI- TRAL Model Law, ensuring that the local framework is familiar and predictable for international practitioners. The institutional growth of permanent arbitral bodies, such as the Arbitration and Mediation Center of Arme- nia and the Arbitration Institution at the Chamber of Commerce and Industry of the Republic of Armenia, has provided a stable platform for both domestic and international disputes. These institutions have mod- ernised their rules to include provisions for emergen- cy arbitrators and expedited procedures, reflecting global best practices. For foreign investors, the fact that Armenia is a party to the New York Convention provides the ultimate security, as it guarantees that awards rendered in Armenia are enforceable in over 160 jurisdictions, and vice versa. A unique and highly efficient trend in Armenian arbi- tration is the digital bridge between arbitral institu- tions and state enforcement. For claims that do not exceed AMD5 million, permanent arbitral institutions now have the authority to send awards directly to the Compulsory Enforcement Service via electronic mes- sage. This bypasses the historical requirement for a court-issued writ of execution, drastically reducing the time and cost of enforcement for small-to-medium enterprises. This “fast-track” enforcement reflects a broader policy trend of utilising technology to remove procedural bottlenecks. The institutionalisation of mediation is equally robust. The Law on Mediation has established a profession- alised class of licensed mediators who operate with the licence of the Ministry of Justice. Mediation is no longer viewed as a “soft” or informal option; it is a regulated process with strict confidentiality require- ments – known as mediation secrecy – that protect all communications and documents from disclosure
in future litigation. The trend is towards the usage of online mediation, which allows international parties to resolve disputes without the logistical burden of travel, further enhancing Armenia’s appeal as a regional dis- pute resolution hub. Even in general commercial litigation, Armenian judg- es are legally required to explore the possibility of a settlement during the preliminary stages of a case. During a preliminary hearing, the judge is empowered to stay the proceedings for a period of two to four hours, or longer if the parties agree, specifically to allow for a court-annexed mediation session. The Law on Mediation ensures that these processes are han- dled by licensed, professional mediators who adhere to strict confidentiality standards. Any statements made or documents exchanged during these sessions are strictly inadmissible in future court or arbitration proceedings, creating a “safe harbour” for settlement negotiations. Armenian law provides a framework of financial and procedural incentives designed to reward parties who resolve their disputes through mediation rather than protracted litigation. These mechanisms are intended to promote a culture of compromise while simultane- ously reducing the administrative burden on the state judicial system. The most direct financial incentive for parties settling a case is the partial refund of the state duty (litigation fee). Under the Law on State Duty, if mediation is appointed by a court and the parties successfully sign a settlement agreement within the timeframe set by that court, a significant portion of the duty is returned to the payer. The refund amounts are as follows: • 50% refund – if the mediation was initiated by the First Instance Court; and • 40% refund – if the mediation was initiated by the Court of Appeal. The state also incentivises mediation by offering unique legal protections that are unavailable in public court proceedings. The initiation of a formal mediation process suspends the running of limitation periods, ensuring that parties do not lose their right to litigate if negotiations ultimately fail.
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