The Armenian Justice Ministry claims that “technical issues” have prevented the launch of an electronic bankruptcy system in the country four years after it signed a $439,000 deal with the Harmony Information Technologies and Education Development Fund (Harmony Fund) to ease the workload of the Bankruptcy Court and the mounds of associated administrative paperwork.

The ministry, which in June 2021 signed an AMD 172.8 million contract with the Harmony Fund,  tells Hetq that all the money has been paid despite the lack of tangible results.

“The launch of the electronic bankruptcy system is hindered by technical issues with the CAST program. The latter is outdated and does not have proper capabilities to ensure smooth interoperability. Solutions aimed at addressing the problem systematically are currently being developed,” Justice Ministry Acting Secretary General Tigran Areyan tells Hetq.

(CAST - Case Administration and Skill Transfer. Developed and put into production in 2005, CAST is used in every court in Armenia and supports the management of all types of cases. See more: Supporting Judicial Reforms in Armenia: A Forward Look; p. 101)

Armenian PM Nikol Pashinyan, in August 2019, instructed that a “Digitalization Council” be established in the country to ensure the digitalization of the state administration system and economy, promote the development of digital skills, and coordinate the work of state departments in the field of digitalization.

The electronic civil litigation platform (cabinet.armlex.am) also works in cooperation with the CAST program. It operates smoothly, despite occasional hiccups. So, what’s preventing the launch of the electronic bankruptcy system?

The justice ministry says it was impossible to foresee the problems of ensuring the smooth functioning with the CAST program, claiming any such prediction ”is beyond the scope of the development of the technical task.”

Of note is over the years, Armenia’s Judicial Department has signed contracts totaling some AMD 242 million drams with MaSys Information Systems Ltd. for the maintenance of the judicial automated system and the CAST program, but ongoing problems haven’t been fixed.

(Headquartered in Yerevan, MaSys bills itself as a company specialized in the development of integrated business management systems.)

Hetq has also reported that Datalex, an online database, linked with CAST, which provides real-time information regarding court cases in Armenia, also operates with periodic disruptions.

The Harmony Fund, over the years, has won several state procurement contracts.

On February 24, 2021, Armenia’s State Revenue Committee (SRC) signed an AMD 60 million contract with Harmony to provide consulting services for the implementation of a new automated information system in the SRC customs unified automated information system.

The SRC told Hetq that Harmony violated the service provision period, failed to meet its obligations, and the professional group issued a negative conclusion on the implementation process. Thus, the SRC unilaterally terminated the contract with the company.

The SRC then signed an AMD 58 million contract with Daniam LLC to perform the same work.

These irregularities came to a head earlier this year with the resignation of Armenian Economy Minister Vahan Keropyan and several ministry staffers following a probe into a government tender process for services designed for the Public Investment Projects Bank.

Ministry wiretaps

As part of this case, investigative agencies in Armenia conducted a series of wiretaps of ministry telephone conversations.

In one of these wiretaps at Hetq’s disposal, former Deputy Minister of Economy Ani Ispiryan tries to clarify information about Harmony Fund from the SRC Deputy Chairperson Ashot Muradyan.

In the telephone conversation, Ashot Muradyan says that Harmony has been servicing the SRC customs system for a year. “I must say that we were very satisfied. The second year, they started competing with another company, lowered the price terribly, to a penny, which would either cover their salary for a couple of months or not, and, naturally, made cuts and provided the service at a correspondingly lower price, of poorer quality,” Muradyan says, adding that SRC Chairman Rustam Badasyan got a call from Atom Janjughazyan, a former Armenian Minister of Finance who chairs the Audit Chamber, to give the company another chance.

Harmony also won a bid for declaring goods using the commodity declaration for express cargo or the passenger customs declaration for express cargo. Muradyan says the company has not done any work in six months and has nothing to submit.    

Janjughazyan refused to talk to Hetq personally but answered our questions via Audit Chamber Secretary General Vazgen Harutyunyan who denied Janjughazyan’s intervention in the matter. Harutyunyan, however, didn’t deny knowing Harmony Fund Director Murad Muradyan

When asked why SRC Deputy Chairperson Muradyan claimed that Janjughazyan telephoned Rustam Badasyan with such a request, Vazgen Harutyunyan suggested we clarify the matter with Muradyan.

Hetq contacted Ashor Muradyan to clarify his wiretapped phone conversation. He requested that we forward all questions in writing.

Hetq also wrote to the SRC, asking it to comment on the alleged call by Atom Janjughazyan to Rustam Badasyan requesting he give a break to Harmony.

SRC Press Secretary Lusineh Mkrtchyan curtly replied that there is no relevant information about any such  phone call, and simply answered “no” to the remaining questions.

Hetq also tried to elicit a comment from Harmony Fund Director Murad.  Muradyan. We called the company several times and a staffer promised to relay our message to management. We sent several messages to Muradyan via WhatsApp and Viber, asking for  comment on the above-mentioned contracts. We also called Muradyan a few days ago. He promised to call later in the day, but he never got in touch.

Top image created using artificial intelligence DALL·E 3