The status of Nagorno-Karabakh must be settled as part of any final peace agreement between Armenia and Azerbaijan, and this will require a joint effort of Russia and the West in the United Nations Security Council (UNSC), Ruben Vardanyan, the ousted state minister of the unrecognised breakaway Azerbaijan territory, told bne IntelliNews in an interview.

“It needs to be a joint effort of Russia and the West in the UNSC,” the Armenian-born billionaire says. He admits that the “difficult relations” between East and West might obstruct this but says “in spite of differences in other areas [this could be a] good example of common ground”.

There have been indications that Armenian Prime Minister Nikol Pashinyan might be prepared to cut a separate peace deal with Azerbaijan – which has held the upper hand militarily since the 2020 war – and leave the ethnic Armenian enclave of Nagorno-Karabakh to reach its own settlement with Baku. Vardanyan says the two disputes have to be handled as one.

“This has to be one deal,” says Vardanyan. “There are so many inter-connected issues, I don’t see how they can separate this issue.”

He also warns that any attempt by the Yerevan leadership to stop being the protector of Nagorno-Karabakh would be a big political mistake. “I believe it would be the end of their political career if they do the deal with the conditions they now declare,” he says, pointing out that there is a “difference between the Armenian government and prime minister and the Armenian nation” on this.

Pashinyan’s government has long had a frosty relationship with Vardanyan, who was close to the previous Yerevan regime, and it was clearly glad to see the back of him last month. When asked about his relationship with Pashinyan, Vardanyan jokes, “I have no relationship with Pashinyan.”

Putting Azerbaijan under pressure

As a first step, Vardanyan says the involvement of Russia and the West and other powers is necessary to force Azerbaijan to end its three-month blockade of the only road from the breakaway territory to Armenia.

The former state minister says the blockade had created a “really tough” humanitarian situation inside Nagorno-Karabakh. He says the economy had “collapsed” as businesses shut down, construction and agriculture were impossible and electricity, gas and petrol supplies were unreliable, while children couldn’t get a normal education. 

Last month the International Court of Justice ruled that Azerbaijan should reopen the Lachin Corridor to Armenia.

“Azerbaijan has to be put under pressure,” Vardanyan says, adding: “They [Russia and the West] need to come together to make this court decision obligatory on Azerbaijan.”

Vardanyan also argues that the existing mission of 2,000 Russian peacekeepers in Nagorno-Karabakh should be put under a UN mandate, extended for “dozens of years” and increased in size and given heavier weaponry.

There is no way that Nagorno-Karabakh can agree to put itself under the dictatorial rule of [Azerbaijan's President] Ilham Aliyev, he insists. “There is no chance we can live together in one state [with Azerbaijan] but we can live side by side,” he says.

The controversial 54-year-old tycoon – who founded Russian investment bank Troika Dialog in 1991, sold it to Sberbank in 2011 and disposed of the rest of his Russian businesses in 2013 – continues to defend the Russian peacekeepers against criticism that they have deliberately stood by during the Azerbaijani blockade, which is ostensibly being carried out by environmental activists.

“I recommend that everyone who criticises the Russian peacekeepers comes here to live. They are the only ones providing security for us. I don’t see it as wise for us to criticise those providing security for us,” he insists.

His defence of the Russian position in the Armenia-Azerbaijan conflict has led to accusations that he is a Russian puppet, a charge he dismisses. “They couldn’t believe someone of my level would come to this place for patriotic reasons,” he says.

Too big a problem

Vardanyan gave up his Russian citizenship in 2022 and moved to Nagorno-Karabakh. Since his dismissal he has remained in the enclave, where he has funded philanthropic activities.

Both Azerbaijan and Armenia were clearly unhappy with his appointment as chief minister in November and were relieved when Nagorno-Karabakh President Arayik Harutiunian dismissed him last month.

Baku had refused to negotiate with him as a representative of the breakaway territory, and face-to-face talks took place the day after he was dismissed. 

Vardanyan says that Harutiunian himself openly admitted that he had come under heavy external pressure to dismiss him, and denies that there are any significant differences between them. “It was too big a problem for him,” he claims.

He also denies that he was an obstacle to a settlement, pointing out that there have been no follow-up talks and the two sides remain as far apart as ever. “If I was the obstruction, nothing changed [afterwards] and so it’s not true,” he says.

The meeting between the two sides showed the “different expectations” and was a “huge misunderstanding”, he argues. “Armenians came to discuss technical issues and Azerbaijan came to talk about the takeover of the country.”

Any talks should only resume under international auspices and under clear legal principles, he argues.

Asked finally whether there could still be a role for him in any peace process, he says, “whatever I am needed for by my country I will do it”.