ARMENIA Law and Practice Contributed by: Hayk Hovhannisyan and Tachat Voskanyan, HAP
9.5 Directors’ Ability to “Just Say No” RA legislation does not give directors the author - ity to simply say “no” to M&A proposals and pre - vent such transactions.
• violation of shareholder rights. These disputes can happen at any stage of the M&A process due to contract breaches or regu - latory restrictions. One notable case involved a UAE company and its American CEO, who failed to recover a USD326 million claim against RA at the International Centre for Settlement of Invest - ment Disputes (ICSID). The dispute concerned a billion-dollar project to build transportation links to Iran. In November 2024, the Annulment Committee rejected the application of Dubai-based invest - ment company Rasia FZE and its CEO Joseph Borkowski to annul the decision. Rasia and its CEO presented their claim to ICSID in 2018, based on contracts concluded under the US-RA Bilateral Investment Treaty (BIT) and the legislation of the RA. They applied for arbi - tration after Armenia announced that it planned to remove the company from the trade corridor construction project due to several alleged con - tractual violations. It is noteworthy that the “HAP” also represented the RA’s interests within this case’s framework.
10. Litigation 10.1 Frequency of Litigation
In the RA, litigation related to M&A transac - tions is relatively rare. Recently, arbitration and alternative dispute resolution mechanisms have gained activity. 10.2 Stage of Deal In the RA, civil litigation, including corporate dis - putes, is regulated by the Civil Procedure Code. Due to their nature, corporate disputes are clas - sified under special claim proceedings. The Code defines corporate disputes as disa - greements related to: • the creation of a legal entity; • management of the legal entity; and • participation (membership) in the authorised capital of the legal entity. Like other cases, corporate disputes go through the stages outlined below. • Case initiation. • Preparation for trial. • Court examination. • Other necessary phases. 10.3 “Broken-Deal” Disputes In the RA, “Broken-Deal” disputes in M&A trans - actions usually involve: • breaches of contract terms; • discovery of financial deficiencies; and
11. Activism 11.1 Shareholder Activism
Shareholder activism is not yet common in the RA due to the small market size and the current stage of corporate governance development. Shareholder rights are mainly defined by the “Law on JSC” and company charters. For example, a shareholder who owns voting shares and:
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