Azerbaijan's President Ilham Aliyev expressed hope that 2023 would be a year of progress in normalizing relations between his country and Armenia as he received Russian Foreign Minister Sergey Lavrov in Baku on Monday.

Relations between the former Soviet republics of Armenia and Azerbaijan have been tense since 1991 when the Armenian military illegally occupied Karabakh, a territory internationally recognized as part of Azerbaijan, and seven adjacent regions. Clashes erupted on Sept. 27, 2020, with the Armenian Army attacking civilians and Azerbaijani forces, violating several humanitarian cease-fire agreements. During the 44-day conflict, Azerbaijan liberated several cities and around 300 settlements and villages that Armenia had occupied for almost 30 years. The fighting ended with a Russian-brokered agreement on Nov. 10, 2020, which was seen as a victory for Azerbaijan and a defeat for Armenia. However, the cease-fire has been violated several times since then.

Aliyev thanked Russia for actively resolving issues between Baku and Yerevan. "Russia, as our friend, ally and neighbor, has a special role in helping regulate interstate relations between Azerbaijan and Armenia. Last year, a substantial effort was made in this direction, and documents defining the conceptual nature of the future peace agreement, namely the mutual recognition of the territorial integrity and sovereignty of the two countries, were adopted. This was confirmed by the documents adopted in Prague and Sochi last October. These documents have laid the foundation that can be used for reaching a peace agreement. In any case, we are determined to do positive and constructive work with the Armenian side and our friend and neighbor, Russia, to quickly turn the page of this hostility and return peace to the South Caucasus," Azerbaijan's President said.

For his part, Lavrov said regional security remains a very relevant topic in Russia's bilateral and multilateral relations. "Many of our international colleagues, including those far from this region, are showing great interest in creating conditions for progress in normalizing relations between Azerbaijan and Armenia. As President Putin has repeatedly said, we welcome all efforts aimed at stabilizing the situation and creating conditions for all countries located in this region to have the opportunity to cooperate in the interests of their countries and peoples based on mutual respect and mutual benefit," the Russian minister said.

Earlier this month, Armenia presented a comprehensive peace treaty to Azerbaijan to end the decadeslong dispute over the Nagorno-Karabakh region. The two countries have fought two wars to control Azerbaijan's Armenian-populated enclave, which has claimed tens of thousands of lives.

Armenian Prime Minister Nikol Pashinian has announced that Yerevan had completed "another stage of working on a project of a peace treaty and on establishing (diplomatic) relations" with Baku. "The document has to be acceptable to Azerbaijan ... its signing must bring about a lasting peace," Pashinian claimed. In addition, an agreement would provide for monitoring mechanisms by both sides to prevent breaches of the peace. Copies have been sent to Organization for Security and Co-operation in Europe (OSCE) members Russia, the United States and France. These countries are co-chairs of the Minsk Group set up by the OSCE in 1992 to seek a peaceful solution to the conflict. Pashinian's announcement came after Yerevan accused Baku of conducting a "policy of ethnic cleansing" and forcing ethnic Armenians to leave the region. Since mid-December, Azerbaijani environmental activists have allegedly blocked the only road linking Karabakh to Armenia to protest illegal mining in the area. According to Yerevan, however, the blockade has led to a "full-blown humanitarian crisis" in the mountainous region, which faces food shortages, medicines and fuel.

'Illegal exploitation'

Baku has filed an arbitration case against Yerevan under the Energy Charter Treaty (ECT), an international agreement focusing on cross-border cooperation primarily in the fossil energy industry, for exploiting energy resources in the Karabakh region. "In a Notice of Arbitration served on Armenia, Azerbaijan seeks redress and financial compensation for Armenia's violation of Azerbaijan's sovereign rights over its energy resources during Armenia's nearly 30-year illegal occupation of Azerbaijan's territory from 1991 to 2020," a statement by the Azerbaijani Foreign Ministry said Monday. The statement said Armenia breached multiple provisions of the ECT, as well as fundamental principles of international law, by denying Azerbaijan access to its energy resources in the region, exploiting Azerbaijan's energy resources for its own benefit and depriving Azerbaijan of further developing its energy resources.

Armenia's initiatives in this regard include the exploitation of the Karabakh region's hydropower resources and facilities, and the construction of at least 37 additional unauthorized hydropower facilities, the statement added. "To facilitate its illegal exploitation of Azerbaijan's hydropower, Armenia established a ‘whole unified system' of electricity distribution from the formerly occupied territories to Armenia, ‘regulated from Armenia' the ‘daily volume of electricity production' and granted putative ‘licenses' to energy companies to operate the region's existing facilities," the ministry said. According to the statement, Armenia also exploited Azerbaijan's coal resources by "constructing additional energy infrastructure on Azerbaijan's territory" and damaged existing facilities. "This arbitration case is an effort to secure justice and reparations for nearly 30 years of illegal exploitation and expropriation of Azerbaijan's energy resources by Armenia, on Azerbaijan's internationally recognized sovereign territory," the statement said.

Last month, Azerbaijan filed a similar lawsuit for inter-state arbitration under the Bern Convention, aimed at holding Armenia accountable for the "extensive destruction" of the environment and biodiversity in Karabakh.