Azerbaijan Files Arbitration Claim Against Armenia for Violating Energy Charter Treaty

Azerbaijan filed a Statement of Claim with the Permanent Court of Arbitration against Armenia, as part of the international legal proceedings from February 2023, detailing Yerevan’s violations of Baku’s sovereign rights over its energy resources in the once-occupied territories.

In the statement submitted on Tuesday, Azerbaijan interpreted Armenia’s actions as multiple breaches of the Energy Charter Treaty and fundamental principles of the international law.

“During its nearly thirty-year illegal occupation of Azerbaijan’s internationally recognized territory, Armenia prevented Azerbaijan from accessing or developing its energy resources in that territory. Instead, it exploited those resources for Armenia’s own benefit,” the Foreign Ministry of Azerbaijan said.

According to the ministry, Armenia’s breaches have been prevalent at the Tartar Hydropower Plant in formerly occupied Aghdara district, along with the Khudafarin and Giz Galasi hydropower projects in the Jabrayil district of Azerbaijan bordering the Islamic Republic of Iran.

The ministry noted that the years of occupation have seen Armenia illegally licensing and regulating the entities to operate the Tartar Hydropower Plant, and “unlawfully plugging this energy source into its domestic electricity network and directing surplus energy to Armenia for domestic energy consumption”.

“Further, Armenia barred Azerbaijan from accessing the Khudafarin and Giz Galasi project sites, delaying the completion of these critical hydropower projects by 30 years and impairing Azerbaijan’s development of its renewable energy sector,” the ministry elaborated.

The Tartar Hydropower Plant (Tartar HPP), a vital element of Azerbaijan’s Sarsang Reservoir, has been identified as the largest hydro energy facility illegally exploited by Armenia from 1994 to 2020.

According to Azerbaijani government data, the electricity generated by the Tartar HPP has been illegally designated as an “export source” for Armenia.

Tartar HPP is one of the three large hydroelectric power plants in the formerly occupied territories of Azerbaijan. Built in 1976 in the Aghdara district on the Tartar River, it was integrated into the Sarsang Reservoir. The plant consists of two hydro units, each with a capacity of 25 MW. Before the occupation, in 1990, the plant's annual electricity production amounted to 81.9 million kWh.

The Khudafarin and Giz Galasi HPPs on the Azerbaijan-Iran border fell under Armenian control in 1992 following the occupation of Jabrayil. As a result, Azerbaijan halted the construction of these plants on its side, while Iran continued to build.

To facilitate the illegal exploitation of Azerbaijan’s hydropower resources, Armenia created a “unified system” to distribute electricity to Armenia, regulated daily electricity production volumes, and issued fake “licenses” to energy companies to operate the facilities in the region.

Moreover, Armenia built at least 37 unauthorized hydroelectric facilities on Azerbaijan’s sovereign territory, plugging their output into the illegal “export source”.

The anti-terrorist operation of Azerbaijan Armed Forces in the Karabakh (Garabagh) region in September 2023 resulted in Azerbaijan reclaiming its sovereignty over the Sarsang Reservoir. In October last year, President Ilham Aliyev raised the state flag at the reservoir.

After Jabrayil’s liberation in 2020, Baku and Tehran resumed collaboration for completing the construction of Khudafarin and Giz Galasi HPPs. In May 2023, President Aliyev and Iran’s late President Ebrahim Raisi inaugurated these hydroelectricity complexes.

The Khudafarin HPP includes two hydro units, each with a capacity of 50 MW, and the Giz Galasi complex contains two hydro units, each with a capacity of 20 MW.