Yesterday the RA Civil Appeals Court let stand a lower court ruling that had gone against a company owned by George Baghoumian, an American-Armenian businessman who died on April 25 while being held in pre-trial detention in the Nubarashen Correctional Facility.
Baghoumian was seeking to overturn the lower court’s ruling in a suit he had brought against Arva Yerkir Ltd.
The businessman was being held in Nubarashen to await trial on charges of tax evasion and illegal arms possession. Baghoumian always proclaimed his innocence and now his family is charging that top Armenian government officials are seeking to appropriate his property and assets.
George Baghoumian used to produce electric batteries that he sold to the RA Ministry of Defense. Afterwards, his company lost contract bids to Arva Yerkir, a company founded by General Vardan Avetisyan. The general would buy the batteries from Baghoumian’s Gold Energy company and then resell them to the Ministry of Defense.
According to Baghoumian lawyer Ruben Balabanyan, in 2010, Arva Yerkir failed to pay for a certain amount of batteries and the diaspora businessman took the general’s company to court.
Gold Energy transferred 193 million AMD worth of merchandise to Arva Yerkir, but was only paid 152.5 million.
Arva Yerkir also countersued Gold Energy, claiming that the batteries weren’t supplied on time and that it was forced to contract with other suppliers.
According to the countersuit, Arva Yerkir argued that the Armenian Army would suffer if the batteries weren’t supplied on time and that the company’s reputation would be damaged as well. Arva Yerkir also claimed that Gold Energy had discredited a number of government officials (General Avetisyan) and had presented unsubstantiated charges.
Attorney Balabanyan also notes that according to the contract between Gold Energy and the Ministry of Defense, the batteries were to be of domestic production, whereas during the time when Gold Energy was doing business with Arva Yerkir, the latter used the money it didn’t pay Gold Energy to purchase foreign made batteries via a company called Metz-Aniv Ltd.
At the end of 2010, Arva Yerkir also signed a contract with Elbat Ltd. One of the owners of this company was Karen Jshmarityan, a member of parliament and a former commerce and economic development minister.
Before his death, George Baghoumian had told Hetq that certain individuals were attempting to seize the battery business from him. They first forced him to vacate the production facility Gold Energy was using (on a site owned by Elbat) and move to Etchmiadzin. Later, they did everything to dissuade him from battery production in general.
Arva Yerkir spins the story differently, claiming that Gold Energy’s batteries were of substandard quality and that it had to spend an additional 3.5 million AMD in repairs. It addition, Arva Yerkir says it faced additional expenses when forced to contract with other suppliers.
Thus, Arva Yerkir had sought 10.5 million AMD for sustained losses from Baghoumian’s company.
The company also claimed that it had to pay 15.8 million in VAT taxes after Gold Energy failed to provide proper accounting statements. Arva says it paid for two accounting audits as well.
Attorney Balabanyan refutes the tax charge and says that Arva Yerkir has no evidence proving that the liability stemmed from Gold Energy. “Perhaps this tax liability was caused by the actions of another company,” he argues.
At the end of the day, lower court Judge Gagik Heboyan rejected Gold Energy’s 47.8 million AMD payment demand and sustained Arva Yerkir’s 11 million demand (10.5 million for sustained losses and the remainder in compensation for the audits).
Today, Appeals Court Judge Narineh Barseghyan let the lower court decision stand and added another 4 million AMD in state fees which must be paid by the company of the deceased American-Armenian businessman.