In 2026, the Cinema Foundation of Armenia launched two procurement procedures for film restoration under state budget Programme 1056, “Cinematography Programme,” and Measure 11002, “Preservation Services for Film, Photo and Audio Collections.”. KinoPress analyzed the documents posted in the state procurement system.
Funding under this measure is intended for the digitisation, restoration and preservation of Armenian films and photographic materials. In previous years, the same programme has supported the restoration of live-action, documentary and animated films.
Yet the Foundation used two fundamentally different procurement approaches for two groups of films.
Six live-action films were placed under a competitive request-for-quotations procedure. The restoration of seven animated films was not opened to competition: the Foundation requested a price only from KIRA LLC and subsequently signed the contract with that company.
This difference might have appeared to be an ordinary technical procurement decision if KIRA had been an unfamiliar company to the Foundation’s executive director, Davit Banuchyan. Official records, however, show that Banuchyan had previously received income from KIRA and had worked on creative projects with the company’s director, Mihran Stepanyan.
These facts do not in themselves prove an unlawful arrangement or a predetermined selection. They do, however, raise legitimate questions about the impartiality of the process and require a fuller explanation than the mere publication of procurement documents in a government system.
Six live-action films and seven days for the entire market
On 31 March 2026, the Cinema Foundation of Armenia published a request for quotations under procurement code ՀԿՀ-ԳՀԾՁԲ-ԿՖՖ-26/34 for the digitisation and restoration of six live-action films.
The package included The March of Our Grandfathers, Crossroads, The Song of First Love, The Tango of Our Childhood, The Master and The Rock.
Foreign companies were also eligible to participate. The winning bidder was to be selected from technically compliant offers, with preference given to the lowest price.
The submission deadline was 7 April — the seventh day after the notice was published.
Seven calendar days is the minimum period permitted under Armenian law for this type of request for quotations. The Foundation therefore opened a formally competitive procedure but gave potential bidders no additional preparation time.
Film restoration is not a routine purchase of office supplies. A potential bidder had to review the technical details of six films, calculate the scope of film scanning, image and sound restoration, assess the equipment and specialists required, prepare the supporting documents and upload the complete bid to the ARMEPS electronic procurement system.
A foreign company first had to become aware that the Armenian procurement existed at all.
Publication in ARMEPS provides formal public access to information, but it is not the same as targeted outreach to the professional restoration market. A specialist company must either monitor the Armenian procurement system regularly or learn about the opportunity through another channel.
The procurement rules allowed the contracting authority to take additional steps to broaden competition, including publication through other electronic channels and direct invitations to known potential suppliers. KinoPress found no dedicated industry-facing notice about the procedure on the Cinema Foundation’s website.
The seven-day period may therefore have satisfied the legal minimum, while still leaving a substantial part of the market unaware of the opportunity.
Two companies nevertheless submitted bids: Armenia’s KIRA LLC and Poland’s Fixafilm. Fixafilm offered the lowest price for every lot and was initially selected as the successful bidder.
According to a later decision published by the Foundation, Fixafilm subsequently lost the right to sign the contract because it did not sign within the prescribed period and failed to submit the required qualification and contract-performance guarantees. The Foundation identified 29 May 2026 as the date on which those grounds arose.
Clause 9.5 of the invitation does provide for such a consequence. The guarantees were generally required within five working days of receipt of the relevant request.
However, the publicly available records do not include the notice sent to Fixafilm, proof of when it was received or the precise deadline communicated to the company. At present, the Foundation’s official explanation can be reported, but the calculation of the deadline and the full communication process cannot be independently verified.
There was no competition for the animated films
While the live-action procurement was still under way, the Foundation initiated the restoration of seven animated films.
This time it did not use a request for quotations. Instead, it selected a single-source procedure, under procurement code ՀԿՀ-ՄԱԾՁԲ-26/48.
The films were Puy-Puy the Mouse, Vin the Penguin, Abu Hassan’s Slippers, The Fox Book, The Found Dream, Kikos and Unlucky Panos. Their combined running time is approximately 70 minutes.
The timeline in the official contract notice is clear.
It’s notable that only one month after – on 7 May, the price request was sent only to KIRA LLC. The company was selected on 11 May. It received the offer to sign the contract on 15 May. The contract signed by KIRA was registered by the Foundation on 20 May, and the contracting authority signed it on 21 May.
The total value of the restoration contract was AMD 6 905 400 (approx. $18,830). The work is due to be completed by 10 December 2026.
The published document contains no information about requests sent to other companies, alternative price offers or the results of any market survey. The available record does not show whether the Foundation attempted to establish whether another specialist supplier could perform the same work at a lower price or under different conditions.
This leads to the central question: why did one package under the same state programme and within the same broad field require competition, while the other did not?
Animated film restoration may, of course, involve particular technical requirements. But the published documents do not explain which of those requirements made the work available only from KIRA.
KIRA is neither an unknown nor an inexperienced company
For the sake of balance, KIRA’s relevant experience should also be acknowledged.
In the Armenian National Cinema Center’s 2023.1 funding competition, the company appeared as One Man Studio KIRA LLC, with the film project Mariana. Mihran Stepanyan was identified as the company’s head.
According to an official publication by the former National Cinema Center, One Man Studio Production carried out the scanning and professional restoration in Armenia of Hamo Bek-Nazaryan’s films House on the Volcano, Land of Nairi and The Daughter, in cooperation with the National Archive, Public Television and Public Radio.
There is therefore public evidence that the company, or its production platform, has relevant restoration experience.
But experience does not answer a separate question: why could an experienced company not compete against other experienced providers?
If KIRA offered the best quality, price and terms, a competitive procedure could only have strengthened the credibility of its selection. A single-source procedure provided no such comparison.
A company from which Banuchyan had received income
KIRA’s selection carries additional public significance because of the company’s previous relationship with Davit Banuchyan.
According to Armenia’s State Register, KIRA LLC is headed by Mihran Stepanyan. The same relationship appears in earlier National Cinema Center competition records.
Banuchyan’s 2023 asset and income declaration, published in the official register of Armenia’s Corruption Prevention Commission, lists AMD 120,000 received from KIRA LLC as remuneration for work or an equivalent payment. The declaration was filed on 3 June 2024.
The professional relationship between Banuchyan and Stepanyan is also documented in another public source.
On 23 November 2023, REACT Production published an animated social commercial produced for the Hayastan All Armenian Fund’s telethon. Davit Banuchyan was credited as director, Mihran Stepanyan as editor, and REACT Production, led by Vrej Kassouny, as the animation team.
Banuchyan’s relationship with the Hayastan All Armenian Fund was not limited to this single production.
His 2023 declaration lists the Fund as the source of two separate employment-related or equivalent payments: AMD 2,973,300 and AMD 2,750,675, for a combined total of AMD 5,723,975.
In other words, during the same year Banuchyan received payments from both KIRA and the Hayastan All Armenian Fund, while also working with KIRA’s director on a production made for that Fund.
Open sources suggest that Banuchyan’s professional relationship with the Hayastan Fund began earlier. In 2019, he was named as the coordinator of the Fund’s open competition for a new logo and rebranding. His name also appeared in later Fund publications as a photographer.
None of this proves that the 2026 procurement was influenced by previous relationships. It does show, however, that the cooperation between Banuchyan and Stepanyan was not limited to a single incidental project and that KIRA was not an unknown market participant to the Foundation’s director.
It was a company from which he had previously declared income and which was managed by a former professional collaborator.
In such circumstances, a public institution must do more than execute a formally valid contract. It must demonstrate how a potential conflict of interest — or the reasonable public perception of one — was identified, considered and managed.
The published records do not indicate whether Banuchyan disclosed his previous financial relationship with KIRA to the Foundation’s Board of Trustees or another body, whether he participated in selecting the procurement method, or whether he recused himself.
Other restoration companies were already known to the Foundation
Armenia’s public cinema institutions have previously worked with companies other than KIRA and One Man Studio Production.
The National Cinema Center cooperated with Poland’s Fixafilm on the restoration of Sergei Parajanov’s Hakob Hovnatanyan and approximately six hours of unused material from The Color of Pomegranates. The restoration of three Parajanov short films also involved the Kino Klassika Foundation, AGBU and partner organisations from Georgia and Ukraine.
Fixafilm was therefore not a new or unknown supplier. In 2026, it participated in the live-action restoration tender and submitted the lowest price.
In 2024, the National Cinema Center also announced the selection of India’s Prasad Corp as a partner in the restoration of Armenian film heritage.
Together with Prasad Corp, it restored three Armenian animated films: The Magic Carpet, The Mice’s Meeting and The Magic Rainbow. Those projects were also financed under the state measure for the preservation of film, photo and audio collections.
Prasad Corp operates film preservation, scanning and digital restoration facilities in India, Europe, the United Kingdom, the United States and other markets. In 2024, the National Cinema Center publicly stated that it expected the partnership to continue over the long term.
This does not mean that the Cinema Foundation was required to award the contract to Fixafilm or Prasad Corp. It does show that other specialist providers, already experienced in working with Armenian film heritage, were known to the institution.
Any suggestion that only one company could restore the seven animated films, or that involving other potential suppliers was practically impossible, therefore requires persuasive evidence.
How was the single-source procedure justified?
In the contract notice concerning KIRA, the Foundation cited Article 23(1)(1) of Armenia’s Procurement Law, together with Items 33 and 39 of the relevant table under Government Decision No. 526-N.
The cited provision allows single-source procurement where a product, work or service can be acquired only from one supplier because of copyright, related, special or exclusive rights.
Item 33 covers the purchase of services in connection with cultural and artistic events, including film production.
The contract in question, however, was not for the production of a new film. It concerned the technical restoration of films produced decades ago and held in a state collection.
The Foundation has not publicly explained why this work was classified as a service connected with film production or the organisation of a cultural event.
The reference to Item 39 also requires clarification. That provision concerns purchases from a commercial organisation in which the state or a municipality holds more than a 50 per cent interest. According to State Register information, KIRA is a privately owned limited liability company.
The inclusion of Item 39 may have been a technical error in the contract notice. But the legal basis for an agreement financed with public funds should be accurate and intelligible. The reference therefore calls for an official explanation.
Earlier questions and the Foundation’s promise of transparency
This is not the first time questions have been raised about the intersection of Davit Banuchyan’s previous professional relationships and decisions taken by the institution he now leads.
In 2025, Film Industry Watch published articles concerning Armenia’s cash rebate system, the company People of Ar and Banuchyan’s previous professional connections. The publications asked how relationships formed in the private production sector were separated from later decisions involving public policy and public resources.
The Cinema Foundation rejected those claims. In its response, it stated that suggestions of conflicts of interest were unfounded and that decision-making procedures were subject to transparent oversight involving independent experts and industry representatives.
The KIRA contract now offers a concrete opportunity to test those assurances.
This is not a hypothetical or future project. A contract has been signed. The invitation was sent to only one company. That company had previously paid income to the Foundation’s director, and its head had worked with him on other projects.
No competitive procedure was held, and the Foundation has not publicly explained Banuchyan’s role in selecting the procurement method or supplier, or how potential bias was excluded.
If the Foundation’s internal safeguards operated as intended, the evidence of that process can and should be made public.
The Foundation has a duty to explain
KIRA may have the necessary technical capacity and may complete the restoration work to a high professional standard.
The Foundation may have had lawful and professional reasons for using a single-source procedure that were simply not fully disclosed in the published notice.
It is also possible that Davit Banuchyan took no part in selecting the company and formally recused himself.
None of these possibilities, however, is established by the documents currently available to the public.
The public should not be required to guess what took place behind closed doors in an institution administering state funds. The duty to explain lies with the Foundation.
The Cinema Foundation should disclose the full justification for the single-source procedure, any market analysis, the reasons for inviting only KIRA, the names of those involved in the decision, and any documents concerning conflict-of-interest disclosure or recusal.
These questions do not amount to an allegation of guilt or illegality. They represent the minimum level of accountability expected from an organisation managing public resources.
Until those explanations are provided, procurement procedure ՀԿՀ-ՄԱԾՁԲ-26/48 raises reasonable questions not only about the choice of supplier in one contract, but also about the consistency of the Foundation’s procurement policy, equal treatment of market participants and its own stated commitment to transparency.
