Claimants: Hyegate, LLC and DAP, LLC
Respondent: Ashot Boghossian
Counsel for Claimants: Van Z. Krikorian (acting as counsel)
The arbitration arose from Boghossian's role as CEO of Aragats Perlite OJSC ("AP"), an Armenian perlite mining company wholly owned through Hyegate's subsidiary DAP, LLC. Boghossian was appointed CEO on Krikorian's recommendation as his longtime business partner.
Hyegate, LLC was formed to acquire and operate the Aragats Perlite Mine in Armenia. The operating agreement provided that Boghossian would serve as CEO of the Armenian subsidiary, Aragats Perlite OJSC. His compensation was to come exclusively from the company's profits — if there were any.
Boghossian was terminated as CEO on November 9, 2018 after years of mismanagement. Hyegate initiated arbitration at the AAA International Centre for Dispute Resolution (ICDR) seeking damages for breach of the operating agreement.
Boghossian caused Aragats Perlite to pay him $118,811.05 without authorization and when there was no "free cash" available. The operating agreement provided compensation only from profits — there were none. These payments constituted a direct breach of the agreement.
Boghossian proposed purchasing industrial dryers for $120,000 but ordered units with the wrong specifications. The dryers cannot be resold or repurposed. He made this purchasing decision without required written approval from the Members, violating the operating agreement's $10,000 expenditure threshold requiring prior consent.
Boghossian borrowed $110,000 from Ardshinbank without approval from the Members. Of this amount, $73,547 is completely unaccounted for — Boghossian could not explain where the money went.
Boghossian took unauthorized loans from an AP employee at a 24% annual interest rate, costing the company $2,771 in unnecessary interest payments.
Boghossian's breach of the arbitration agreement by filing litigation in Armenia caused the company to incur $3,020 in Armenian litigation fees to defend against improper proceedings.
| Category | Amount |
|---|---|
| Unauthorized payments to self | $118,811.05 |
| Defective dryer purchase | $120,000.00 |
| Unauthorized borrowing (unaccounted) | $73,547.00 |
| Excess interest on unauthorized borrowing | $36,453.00 |
| Interest on unauthorized employee loans | $2,771.00 |
| Armenian litigation fees | $3,020.00 |
| Subtotal: Damages | $354,602.05 |
| Arbitration costs & fees | $61,312.50 |
| TOTAL AWARD | $415,914.55 |