(Jan 12, 2016, (Bloomberg))--Karuturi Global Ltd., one of the largest investors in Ethiopia’s farm industry, is challenging the termination of its project, claiming the government broke the terms of its agreement with the company.
The Agriculture Ministry’s cancellation last month of the company’s 2010 lease is invalid as it didn’t follow procedure, contravened an investment agreement between India and Ethiopia, and wrongly accused the company of inadequate progress, Managing Director Sai Ramakrishna Karuturi said in an interview Jan. 5 in the capital, Addis Ababa.
“I don’t recognize this cancellation,” he said. The termination amounts to expropriation, which the bilateral investment treaty says must be accompanied by market-value compensation, Karuturi said.
The government made the “painful decision” to cancel the contract because of a lack of progress, said Ethiopian Communications Minister Getachew Reda.
“If you cancel a project, what’s the point of negotiating?” he said in Addis Ababa on Jan. 8. “If he thinks he has a legal option, let him try it, but the government has been giving Karuturi extensions for a long time.” Read more from Bloomberg »
The Agriculture Ministry’s cancellation last month of the company’s 2010 lease is invalid as it didn’t follow procedure, contravened an investment agreement between India and Ethiopia, and wrongly accused the company of inadequate progress, Managing Director Sai Ramakrishna Karuturi said in an interview Jan. 5 in the capital, Addis Ababa.
“I don’t recognize this cancellation,” he said. The termination amounts to expropriation, which the bilateral investment treaty says must be accompanied by market-value compensation, Karuturi said.
The government made the “painful decision” to cancel the contract because of a lack of progress, said Ethiopian Communications Minister Getachew Reda.
“If you cancel a project, what’s the point of negotiating?” he said in Addis Ababa on Jan. 8. “If he thinks he has a legal option, let him try it, but the government has been giving Karuturi extensions for a long time.” Read more from Bloomberg »
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