The article is dedicated to Nagorno-Karabakh issue. The author shows the dynamics of the armed conflict settlement. The special attention is given to the OSCE`s role in the process, which led to the establishment of Minsk Group, co-chaired by Russia, the United States, and France. Within the framework of the OSCE Minsk Group the principles were worked out and presented to the opposing parties in November 2007. The principles are called Madrid Principles and the updated version was proposed by the American side in May 2014. It has been established that the Madrid principles were in practice rejected by both sides of the conflict.