An international arbitration tribunal has ordered the Ethiopian Railway Corporation (ERC) to pay Turkish contractor Yapı Merkezi USD 213.7 million in a dispute over the stalled Awash-Kombolcha-Woldiya-Hara Gebeya railway project, according to information obtained by Capital.
The London Court of International Arbitration (LCIA) administered proceedings concerned a 2015 contract for construction of the 392-kilometre railway, valued at approximately USD 1.7 billion. Yapı Merkezi reportedly sought more than USD 1 billion in compensation, while ERC filed counterclaims of around USD 400 million.
Construction has remained suspended amid longstanding contractual disputes.
An ERC official said the tribunal issued its award on September 23, 2026. Reported components included USD 67.4 million in unpaid bills, USD 76.7 million for construction delays and USD 89.2 million for assets damaged during the conflict in northern Ethiopia. These figures do not add up to the reported USD 213.7 million award.
The tribunal also reportedly directed Yapı Merkezi to refund USD 29.1 million in advance payments and transfer railway construction vehicles and equipment to ERC. Claims against Ethiopia’s Ministry of Finance and Ministry of Transport and Logistics were dismissed.
Ethiopia’s defense team included legal, financial and engineering experts from ERC and the Ministry of Justice, led by Addis Ababa University law professor Tilahun Teshome. Earlier settlement negotiations in Istanbul and Addis Ababa ended without agreement.
Yapı Merkezi, however, announced a different financial outcome, saying it had secured a net award of USD 307.6 million after consideration of ERC’s counterclaims. The company said the award, calculated as of June 30, 2026, carries nine percent annual simple interest on the outstanding principal and was communicated to both parties on October 2.
The discrepancy between the reported award amounts remains unresolved. Although the parties reportedly have 28 days to challenge the ruling, sources told Capital that neither currently plans to do so.
Source: Capital Ethiopia Newspaper
