A Chinese construction company has taken legal action against the Ethiopian government under international arbitration in London over a dispute involving a road project in northern Ethiopia, Ethiopia Observer has learned.
A decision is expected in February 2026, with Beijing Urban Construction Group Co. Ltd seeking to recover $18m in damages, well-placed sources said. The company alleges that it was forced to terminate its contract after its property was damaged and looted during the conflict in the region.
The case is being heard at the International Chamber of Commerce in London. The Ethiopian government has engaged the law firm George Rosenberg Law Limited to represent it, with the legal department of the Ethiopian Road Authority overseeing the matter. Sources say no counterclaim has been filed by the Ethiopian government.
Beijing Urban Construction Group had been contracted to build a 68.8 km road to Limalimo, on the northern escarpment of the Simien Mountains, linking Debark and Zarema in the Amhara region, at a cost of 31 million birr per kilometre. About 30% of the project was completed before work was suspended, when Tigray forces captured Debark in August 2021. Since then, the company said it was forced to halt work after massive damage occurred to its properties.
This is not the only company taking action against the Ethiopian government. Turkish contractor Yapi Merkezi, which was responsible for the Awash–Hara Gebeya Railway project, was also seeking $1 billion in compensation.
Yapi Merkezi, working in partnership with the France-based consultant Systra, began construction of the 392-kilometer railway in 2015. However, the project was suspended in 2020 following the outbreak of war between the Ethiopian government and the TPLF.
The suspension eventually gave rise to an arbitration case, which was heard in London last year. A few months later, the ICC rendered a partial award in favour of the Ethiopian government, while the remaining claims are still pending.
The dispute comes amid wider concerns about Ethiopia’s capacity to finance large-scale infrastructure projects. Several schemes have stalled in recent years as the government grapples with foreign currency shortages, mounting debt, and the economic fallout of the civil war.
See how destructive war is? Unable to talk through issues, you resort to guns, and you end up worse than you began. We agreed to pay the Chinese and the Turks to build roads. We unilaterally terminated the agreement. We then destroyed the portion that was already built. We stole or destroyed contractors’ equipment (could be the work of Isaias the mercenary) and now we have to pay for the damages and for breaking the agreement. Worst of all, investors will be frightened away because our leaders happened to be idiots. Abiy is about war, as are Isaias and Debretsion. These need quarantining and forced to undergo a detox regime. Just listen to Isaias and Debretsion mumbling trash, day in and day out. Listen to Abiy’s incoherent sermons and childish demeanor. Then look at a pacified and scattered populace crying out for some leadership. Just unfortunate. Just unfortunate.
Pingback: Ethiopia faces $18m arbitration case from a Chinese construction company – Ethiopian law by Daniel Fikadu
We have lost many innocent lives during the war, and now we are going to pay these dozens of damages to foreigner companies. See how the war is distructive!!