Billionaire on trial in Azerbaijan who risks being left behind peace deal

Ruben Vardanyan is one of Armenia’s richest men, but his millions are of little use now that he is facing a possible life term in jail in neighbouring Azerbaijan.

The two neighbouring Caucasus countries have agreed the text of a historic peace deal to end decades long conflict over the territory of Nagorno-Karabakh, but Vardanyan and 15 other former ethnic Armenian leaders are not part of the agreement.

They are on trial in a military court in Baku, accused of war crimes dating back decades.

Vardanyan, a 56-year-old Russian-Armenian entrepreneur, is facing 42 charges including planning and waging war, mercenary activities and terrorism.

A picture of him in court appeared to show bruises on his forehead and there have been allegations of torture, denied by Azerbaijan which insists his rights have been respected in custody.

It marks a dramatic downfall for a man who made his fortune in Russia and once rubbed shoulders with celebrities such as George and Amal Clooney.

He set up Russia’s first investment bank back in the early 1990s, and as founder of the country’s prestigious business management school “Skolkovo” he enjoyed the reputation of a progressive visionary, a Western-friendly voice in Russia’s business community in the 2000’s.

But a 2019 investigation by the Organized Crime and Corruption Reporting Project said that employees of his investment bank built a financial system laundering billions of dollars in the mid-2000s.

Vardanyan denied being aware of any criminal activities, and was never legally charged.

He spent hundreds of millions of dollars on philanthropic projects in Armenia, and transformed a quiet town in the snow-capped mountains in the north of the country, setting up a school with the aim of attracting students from all over the world.

“This school was imagined as an institution that would bring Armenia to the world and the world to Armenia,” says Adam Armanski, the principal of the United World Colleges (UWC) of Dilijan.

Everything changed for Ruben Vardanyan in September 2022 when he decided to move to Nagorno-Karabakh, a mountainous region that was historically populated by ethnic Armenians but part of Soviet Azerbaijan.

Armenia and Azerbaijan had already fought two full scale wars over the region, which was internationally recognised as part of Azerbaijan.

The first Karabakh war in the 1990s resulted in the expulsion of hundreds of thousands of ethnic Azeris.

Then, in 2020, Azerbaijan – backed by Turkey – regained control of big swathes of the lost territory, while the Karabakh enclave remained in the hands of ethnic Armenian separatists.

Within months of Vardanyan’s arrival Azerbaijani authorities blocked the only road connecting Nagorno-Karabakh with the Republic of Armenia, subjecting the region’s population to severe food shortages.

Vardanyan renounced his Russian citizenship and became the de facto prime-minister of Nagorno-Karabakh, which Armenians call Artsakh. He used his name, contacts and the ability to speak fluent English to raise the awareness of the plight of Karabakh Armenians.

“My father did more interviews with international media in three months than all the other Nagorno-Karabakh presidents in 30 years. The amount of attention this was receiving from the Western media clearly irritated Azerbaijan,” his son David Vardanyan told the BBC.

There had been speculation that Vardanyan had moved there to avoid international sanctions imposed on Russia’s billionaires with links to the Kremlin.

The government in Baku considered his decision to take up the position as illegal.

His son insists he was driven by the desire to help local Armenians.

“We had an argument on our last family holiday, I was completely against his decision, which was putting the entire family at risk. He said he would not be able to live with himself knowing he did nothing for the Armenians of Karabakh.”

His father’s long-term friend Arman Jilavian said even the remotest of chances of helping ethnic Armenians remain in their ancestral land was enough for him.

“Some would say this was irrational, some say this was super calculated political move. I think none is true,” he says.

In September 2023 Azerbaijan launched a military operation and took control of the entire territory in 24 hours.

Nagorno-Karabakh’s leaders capitulated and more than 100,000 ethnic Armenians were forced to leave their homes.

Vardanyan was arrested by Azerbaijani authorities as he joined a mass exodus to Armenia.

Much of his time since has been spent in solitary confinement, his family says.

He has already been on hunger strike twice, protesting at what he has called a lack of proper judicial process, amid allegations of torture.

Fifteen other former Karabakh leaders are also being tried in Baku’s military court for alleged war crimes committed since the late 1980s.

Vardanyan has been dealt with separately, but many in Armenia see all the cases as show trials.

Only the main Azerbaijani state TV channel has been allowed to film the trials.

Azerbaijan insists it is complying with international legal standards, and that it has a responsibility to hold to account those suspected of having committed war crimes.

But last month, the government in Baku ordered the closure of the local offices of the International Red Cross, the only international organisation with access to Armenian prisoners.

The European Parliament has adopted a resolution on the “unlawful detention and sham trials of Armenian hostages”, calling for their immediate release.

Vardanyan returns to court on Tuesday, but supporters fear his case will be overshadowed by a historic peace deal taking shape between Armenia and Azerbaijan.

The details are yet to be made public but officials say the draft text does not include the issue of the prisoners on trial or the right of ethnic Armenians of Nagorno-Karabakh to return to their homes.

The failure to mention the prisoners has prompted criticism of Armenian Prime Minister Nikol Pashinyan’s government at home and abroad.

But Arsen Torosyan, the MP from the Armenian governing party Civil Contract believes this issue needs to be solved separately.

“It is a peace treaty between the conflicting countries with a long history of hatred between each other. I personally think that only completing or signing of this peace treaty can make ground to solve the issue of political prisoners. I don’t see any other way to do it.”

Vardanyan has warned this is a mistake.

“This is not the trial of just me and 15 others – this is the trial of all Armenians,” he said in a voice message to supporters.

“If you don’t understand this – it is a big tragedy because this is not the end of the story, not the end of the conflict, it’s only the next stage of the conflict, for all sides.”