Khudyan v. Republic of Armenia

At a glance

Parties

Edmond Khudyan v. Republic of Armenia

Case no.

Civil Action No. 24-1054 (RBW), United States District Court for the District of Columbia

Forum and rules

Petition under 22 U.S.C. § 1650a and Article 54 of the ICSID Convention to recognise and enforce an ICSID annulment decision

Court

United States District Court for the District of Columbia: Judge Reggie B. Walton

Underlying award(s)

Khudyan et al. v. Republic of Armenia, ICSID Case No. ARB/17/36: Award of 15 December 2021 and Decision on Annulment of 21 July 2023

Sector

Real estate development

Outcome

Petition granted and Armenia's counterpetition to enforce the original cost award denied (14 July 2025).

Amount

Judgment for Mr Khudyan of $438,393.84 plus post-judgment interest under 28 U.S.C. § 1961. Armenia's counterpetition sought $737,466.34 plus interest and costs; it was denied.

The dispute

In 2017 Edmond Khudyan and Arin Capital & Investment Corporation, a company of which he is the sole shareholder, brought ICSID claims against Armenia. They alleged that Armenia failed to prevent the embezzlement of his investment in a real estate development. On 15 December 2021 the tribunal upheld Armenia's jurisdictional objections, finding among other things that Mr Khudyan was an Armenian citizen. It ordered both claimants, jointly and severally, to pay part of Armenia's costs. On Mr Khudyan's application alone, an ad hoc Committee on 21 July 2023 annulled the citizenship finding and the cost order and ordered Armenia to pay his costs of $438,393.84. Mr Khudyan petitioned to enforce that decision. Armenia argued that the cost award remained valid against Arin Capital and counterpetitioned to enforce it against Mr Khudyan as Arin Capital's alter ego.

Key holdings

1. The Court has subject-matter jurisdiction under the arbitral award exception of the FSIA (28 U.S.C. § 1605(a)(6)), which courts have applied to ICSID awards without exception. p. 9
2. The Court has personal jurisdiction. Armenia did not contest it and had expressly waived all objections regarding service in the parties' joint motion. pp. 9–10
3. The Annulment Decision is authentic and must receive full faith and credit under 22 U.S.C. § 1650a(a). Armenia disputed only its scope, not its authenticity. The original award was also authentic, but it could be enforced only to the extent it had not been annulled. p. 10 and n. 5
4. The Committee annulled the cost order (paragraph 452(5) of the Award) "in its entirety" and as to all parties, including Arin Capital. The Committee could not apportion the joint and several cost award between the two claimants. Where it meant to exclude Arin Capital, as with paragraph 452(4), it said so expressly. pp. 11–12 (Annulment Decision ¶¶ 243–245)
5. The ICSID Secretary-General's letter of 28 June 2024 is consistent with this reading. It mentions the partial annulment and the costs order in Mr Khudyan's favour, but no outstanding award to Armenia. Armenia cannot create an ambiguity by offering its own alternative interpretation, and the Annulment Decision is clear enough to enforce. pp. 12–13
6. Judgment is entered for Mr Khudyan for $438,393.84 plus post-judgment interest, and the counterpetition is denied. Armenia's planned alter-ego motion would be moot. p. 13; p. 5 n. 3

Procedural history

1. 2017Mr Khudyan and Arin Capital submit ICSID claims against Armenia (ICSID Case No. ARB/17/36).
2. 15 December 2021ICSID Award upholds Armenia's jurisdictional objections and orders the claimants, jointly and severally, to pay part of Armenia's costs.
3. 8 April 2022Mr Khudyan applies for annulment under Article 52(1)(b) of the ICSID Convention. Enforcement is stayed on condition that he places the cost amount in escrow, which he did.
4. 21 July 2023Decision on Annulment annuls the citizenship finding and the cost order in full, and orders Armenia to pay Mr Khudyan $438,393.84 in costs.
5. 12 April 2024Mr Khudyan files his petition in the U.S. District Court for the District of Columbia.
6. 22 October 2024The Clerk enters default against Armenia. Mr Khudyan moves for a default judgment on 30 October 2024.
7. February 2025The parties jointly move to vacate the default, with Armenia waiving service objections (2 February). The Court grants the motion (4 February). Armenia files its opposition and counterpetition (2 February).
8. 14 July 2025Memorandum Opinion grants the petition and denies the counterpetition.

Tribunal, counsel and experts

Decided by

• Reggie B. Walton Judge, United States District Court for the District of Columbia

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Keywords

• ICSID enforcement
• 22 U.S.C. § 1650a
• Article 54 ICSID Convention
• annulment
• Article 52(1)(b)
• manifest excess of powers
• cost award
• joint and several liability
• partial annulment
• alter ego
• FSIA arbitral award exception
• personal jurisdiction waiver
• ambiguity of award
• nationality
• dual nationality
• Armenia
• real estate
• Arin Capital

Summary generated with AI from the published documents — refer to the award for the authoritative text.