A Cyprus-registered shell company with a minority stake in Armenia's largest mining enterprise filed a $1.2 billion lawsuit against the Armenian government, alleging a serious violation of its ‘legitimate shareholder rights.’

The arbitration case brought before the World Bank's International Centre for Settlement of Investment Disputes stems from the October 2021 Zangezur Copper-Molybdenum Combine (ZCMC) takeover by entities linked to Russian billionaire Roman Trotsenko. Trotsenko acquired 75 percent of the ZCMC stock from a German metals group and immediately gifted a quarter of that stake to the Armenian government.

The government subsequently increased its share in the mining giant to almost 22 percent after securing a similar “donation” from Armenian minority shareholders prosecuted for tax evasion. 

Meanwhile, Walnort, which owns the remaining 12.5 percent of ZCMC, challenged the legality of the 2021 change of ownership. It claimed that the ZCMC charter entitled it to a right of first offer that the former majority shareholder violated.

Walnort failed to have Armenian courts invalidate the deal before its owner, former Russian Health Minister Mikhail Zurabov, sold the company to the Geneva-based firm Bell Capital Switzerland in November 2023. Bell Capital reportedly specializes in international finance litigation.

Walnort announced this week that it has sued Pashinyan’s government for “serious breaches” of an agreement on the protection of mutual investments signed by Armenia and Cyprus in 1998.