Authors note: I have written this commentary not because I care about the legal dispute between Karuturi and the T-TPLF over a land deal in Gambella. I could not care less how thugs and those who do business with thugs resolve or do not resolve their disputes.
But I am deeply concerned about the economic and social fallout of the Karuturi-TPLF debacle. Tens of thousands of people have been evicted from their land, relocated and “villagized” to make the Karuturi project possible in Gambella. Once self-sufficient small-scale farmers and pastoralist communities have been uprooted and reduced to abject poverty and forced to survive on food aid.
What will happen to the permanently displaced population of Gambella now that the Karuturi project is no more? What remedial actions are in place or planned to rehabilitate and repatriate the displaced population and mitigate the ecological destruction caused by the Karuturi project? What are the potential negative consequences and fallout of the Karuturi project for future foreign investments in Ethiopia?
In this commentary, I address only a few of the many issues in the convoluted and tangled legal web Karuturi and T-TPLF have weaved for themselves in their Gambella Gambit.
“Touch me, then you will see the power of India”
“Touch me, then you will see the power of India”, declared a pissed off Sai Ramakrishna Karuturi in a recent interview in direct challenge to the Thugtatorship of the Tigrean People’s Liberation Front (T-TPLF). (Is that thug-talk (“thugese”) for “I will kick your rear end if you ***k with me”? Sounds so Mafiosi!)
Sai Ramakrishina Karuturi, founder and managing director of Karuturi Global Ltd, the self-proclaimed “rose king of the world” and “lion of Gambella” crowed, “I have invented and discovered commercial farming in Ethiopia… Commercial farming by foreign investors has never been thought of as a potential venture. Karuturi was the first to do.”
Whoa! Karuturi is just blowing smoke or he has not done his due diligence. There were commercial farms in Ethiopia under the imperial government.
Prof. Edmund Keller in his book “Revolutionary Ethiopia: From Empire to People’s Republic” at p. 127 writes:
Haile Selassie employed a multifaceted economic policy to orchestrate the process of development from above. He put heavy emphasis on the promotion of manufacturing industry and commercialized agriculture mostly for purposes of import substitution… The Haile Selassie regime pushed commercial agriculture not only at the expense of feudal relationships and structures, but also in spite of the negative social impact it might have on peasant populations. When feudalism was resistant to change, the emperor was generally willing to let it die by degrees. He extracted what he could from it, probably realizing that its days were numbered; but he was unprepared to smash it in one fell swoop.
So neither the T-TPLF nor Karuturi has nothin’ on H.I.M. Haile Selassie when it comes to commercial agriculture. I just want Ethiopia’s young people to know an indisputable fact in their history.
In a much ballyhooed “Land Rent Agreement” [Land Rent Contractual Agreement Made Between Ministry of Agriculture and Rural Development and Karuturi Agro Products Plc], the T-TPLF handed over to Karuturi a “100,000 hectares” on “long term land lease” with a contingency for another 200,000.
Or did it?
It is now a highly disputed legal question what the T-TPLF and Karuturi did in their dealings over land in Gambella. Karuturi implicitly challenges not only the validity of his “agreement” with the T-TPLF but also the very nature of the legal instrument defining their dealings.
Karuturi says he has a “lease” with the T-TPLF. The T-TPLF document says Karuturi has a “land rent” agreement.
The plot thickens. According to Karuturi, there are two different “leases”: one, “the mother document” with the “Gambella government” purportedly granting him 300 thousand hectares and another “agreement which says I will receive 100 thousand hectares to cultivate and 200 thousand more I can get if I want and if I can finish cultivating the 100 thousand.” Karuturi says the “mother document is the Gambella agreement”, not the “copy from the then Ministry of Agriculture” (the “land rent agreement” referenced above).
The state owns all land in Ethiopia. (But who own the state? I mean who is the land lord of all the land in Ethiopia. Does it mean that whoever owns the state in Ethiopia owns Ethiopia?)
In the current dispute, the state controlled by the T-TPLF and the regional state of Gambella which simultaneously claims ownership of the land are both claiming to have properly granted the same land to Karuturi. Which land “agreement” is valid constitutionally and contractually?
If what Karuturi got is a “land rent” from the T-TPLF, then the T-TPLF would be the land lord? If Karuturi has a “lease”, as he claims from the Gambella regional government, then the privity (legal relation) will one of lessor and lessee with completely different set of obligations, privileges and immunities.
Is the T-TPLF or the Gambella government “agreement” the controlling legal instrument defining Karuturi’s rights and obligations?
The T-TPLF “land rent agreement” in the very first sentence of the first paragraph states, “This Land Lease Agreement is made…” Yet, the “land rent agreement” is captioned, “LAND RENT CONTRACTUAL AGREEMENT…”
Is the T-TPLF drafted “LAND RENT CONTRACTUAL AGREEMENT MADE BETWEEN MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT AND KARUTURI AGRO PRODUCTS Plc” a “lease” or a “land rent contract”?
Whether the “agreement” is ultimately characterized as a “lease” or “land rent” before an impartial tribunal (arbitration) will be one of the decisive factors in the disposition of the dispute between Karuturi and the T-TPLF.
Under the so-called ethnic federalism scheme (I did not say scam), does the “federal government” or the “regional governments” have precedence in the disposition of land in the regional jurisdictions?
Karuturi further claims, “When the agreement was drafted I pleaded with them not to put 300 thousand [hectares] but they forced and put the amount stated.”
He also says he wanted only 10 thousand hectares not 300 thousand.
Did Karuturi sign the “land rent agreement” or some other “lease” under duress?
Close scrutiny of the T-TPLF-Karuturi “land rent” or “lease” agreements shows a fuzzy, tangled and convoluted legal relationship.
The T-TPLF cancelled its “agreement” with Karuturi because Karuturi has allegedly “developed” only 1,200 hectares, far below expectations. T-TPLF communications minister Getachew Reda said the T-TPLF had given “Karuturi extensions for a long time.”
Reda daftly defended the “cancellation” and taunted Karuturi, “If he thinks he has a legal option, let him try it.” (It is not clear if Reda was taunting Karuturi to try his “legal option” in T-TPLF kangaroo [monkey] court. The T-TPLF story line for “cancelling” the “agreement” just does not pass the smell test. I would believe Pinocchio first before I believe the T-TPLF. As far as I am concerned, the “LF” in the TPLF stands for Lie Factory. Like it or not, I am just telling it like it is!)
Is six years or less enough time to clear out and commercially develop agriculture in an area the size of wales with challenging weather and environmental conditions?
When asked how long it will take him to develop the land, Karuturi flipped the question on the T-TPLF. “When a hot spring came in Gilgel Gibe III [dam], could you tell me how long it is going to take to generate electricity? You tell me. I was sitting in my house with a generator running because for two years there was not enough power.” The T-TPLF began construction on Gibe III in 2008 and it has yet to generate any meaningfully measurable electricity to date. Supposedly it came online in October 2015.
There is certainly no performance schedule or “development” deliverables in the T-TPLF “land rent agreement”. There are no benchmarks or metrics in the 9-page boilerplate “land rent agreement” to apply and demonstrate non-performance on the part of Karuturi. There is no textual basis in the “land rent agreement” to determine whether Karuturi met or failed to meet his performance obligations.
Reda’s claim of “prolonged extensions” as a basis for total breach is legally meaningless within the boilerplate language of the “land rent agreement”.
When the T-TPLF notified Karuturi that his project had been cancelled, a defiant Karuturi said, “I don’t recognize this cancellation. ‘The termination amounts to expropriation, which the bilateral investment treaty says must be accompanied by market-value compensation.”
Karuturi does not have any problems with Ethiopia or its people. He publicly proclaims his love for Ethiopia. “Ethiopia is a very orthodox country. They have very strong values, very strong customs which are both its strength and weakness. I am a friend of Ethiopia. I came here because I love this country. I love the place and I have invested a lot of my money in this country.” I have no reason to doubt his sincerity, but I don’t understand how one can love a people yet watch them idly as they are being displaced wholesale and villagized by the tens of thousands and reduced to abject poverty?
Talking about loving Ethiopia, I have never heard any T-TPLF leader ever proclaim publicly, “I love Ethiopia” or even “I am a friend of Ethiopia”. I will eat crow if anyone could disprove me on this. That’s saying a helluva lot by a vegetarian!)
Karuturi’s problem is the T-TPLF. He says, in so many words, he was ripped off by the T-TPLF. Reading between the lines in the interview, Karuturi screams that he has been took! He’s been hoodwinked, bamboozled, duped and conned! By the T-TPLF.
Back in 2012, Karuturi told The Telegraph, “When it’s high tide you’ve got to sail and when the tide is low, you’ve got to make sure that you don’t get sandbagged.”
Was Karuturi actually stonewalled, fleeced, gypped, taken for a ride and the cleaners, chiseled and flimflammed by the masters of flimflam?
In 2016, Karuturi found out that not only has he been sandbagged in low tide, he was indeed left high and dry and twisting in the wind in his Gambella Gambit.
I told you so, Karuturi, “The hand that gaveth the free land is the hand that taketh away…”
I knew Karuturi would be taken for a ride and then to the cleaners even before the ink had dried on his “lease” (that is what he calls it) with the T-TPLF (?) or Gambella government (?).
It is really too bad Karuturi figured it all out at the very end. In his interview Karuturi said, “In Africa, if you fail you are finished. If you fall, the vultures come and wait for you to die and then eat you well.”
Well, Karuturi should have seen the T-TPLF vultures swooping in on him when they offered him 100 hundred thousand acres sight unseen. It was like the old land scams of the 1960s and 70s in the U.S. state of Florida.
Unless Karuturi is extremely visually challenged, he could have seen he was dealing not with doves but vultures. Isn’t it a little late now for Karuturi to complain about buzzards picking his bones clean?
Of course, I “knewed” it. I just “knewed” it from day 1 what Karuturi’s trip in the underworld was going to be like. I knew exactly how the Karuturi project was going to go down.
In my March 2011 commentary, “Ethiopia: Country for Sale”, I told Karuturi to “beware of those bearing free gifts”, that is free land.
I told Karuturi he has “no idea how cunning, shrewd, tricky, wily and crafty the free land-givers are.” I told him don’t do it or you will regret it! I told him, those who have given you “free land understand the power of greed in the hearts and minds of the greedy.”
In helpless resignation, I wistfully cautioned Karuturi not to fall for the T-TPLF scam:
Karuturi is free to indulge in the proverbial fantasy about a free lunch, free money and free land. Just as there is no such thing as a free lunch, there is no such thing as free land. After Karuturi spends millions to clear the forest, bring in expensive agricultural equipment, build infrastructure and get the farms humming, it will find out “that’s not all”. [Karuturi] will wake up one fine Gambella morning and find out that the free land his company got without asking ain’t free after all. Karuturi will find out that it has failed to get this or that permit, or is in violation of this or that part of the 50-year lease. It did not build this school or that clinic, and the ones it built are not big enough or good enough. It will find out that it did not build this road or that town center the right way, and the ones it built are inadequate and more need to be built. Karuturi will suddenly find out that foreign investment law that gave them millions of hectares of free land has been reinterpreted to mean whatever the free land-givers want it to mean… , In the end, [Karuturi will find out] ‘The hand that gaveth the free land is the hand that taketh away the fine, well-developed farmland!’… In the end, all of the investors [in Ethiopia] will lose. In the end, the free land-givers will have it all. Over the decades, we have seen free-land-for-nothing type of scams from Angola to Zimbabwe.
Karuturi admitted in his recent interview that friends had advised him not to do it for other reasons. “Some Ethiopian friends of mine were telling me its madness to go to Gambella. But I said I will manage; and I thanked them for their concerns. But I went to Gambella with a purpose of increasing food production in this country. But I don’t know since when that has become a crime. I have put my money and I have developed my farm.”
It was not madness to go to Gambella. It was madness to trust the promise of the T-TPLF. A T-TPLF promise is worth a promise to deceive. A lesson learned too late by Karuturi.
So, in January 2016, all of my predictions came down tumbling true.
I hate to say it; and I certainly get no pleasure from saying it. But I will say it. I was right all along about the Karuturi deal. I was right from the get go! I pegged the T-TPLF deal for what it was. A scam!
Was Karuturi set to fail?
It is arguable whether Karuturi is having “buyer’s remorse” now that the “vultures” are swooping in as his project “waits to die”.
What was Karuturi thinking when he signed the deal with the T-TPLF? (That is a trick question. He wasn’t.)
Perhaps the “world king of roses” was wearing rose-colored glasses when he signed the deal with the T-TPLF. “That which we call a rose by any other name would smell as sweet.” But is a “land rent agreement” by any other name a “lease”?
Karuturi claims he asked only for 10 thousand hectares because that was all he was able to develop at the time but was forced to accept 100 thousand acres. Is that setting him up to fail? He metaphorically explains that if one could eat only one injera (Ethiopia’s national “bread”) but is given five, is it fair to blame the person for not eating the remaining four? He’s got a point.
Did Karuturi really believe the T-TPLF would uphold their end of the bargain? If he believed the late Meles and his T-TPLF will let him win in Gambella, he is a damn fool.
Karuturi ignored the old maxim “caveat emptor” (buyer beware) at his own peril.
Meles and his T-TPLF gang know how to play one game only. Zero sum. That means they win 100 percent of the time; everybody loses by 100 percent every time.
Don’t believe me? Then answer this question: By what percentage did the T-TPLF win the May 2015 election? Well! I can’t hear you. By what percentage?!
Here is an easier question: By what percentage did the T-TPLF win the 2010 election? (Hint: 99.6%.)
I rest my case!
Did Karuturi and Meles set their deal in motion in anticipation of outwitting each other in the end? That is another way of asking if there is honor among jackals?
I don’t know for sure, but I wouldn’t put it past either one of them.
But the way Karuturi presents his side of the story clearly suggests that he did not know he was being conned into making the deal by the “great man holding a great position”, the late cunning master of treachery Meles Zenawi.
Karuturi recalled the fateful day he was snagged into the deal.
One day, I met a very great man holding a great position in this government whose name I need not mention. I had an appointment with him. While sitting in the reception I saw a newspaper which said ‘Ethiopia imports 70 thousand tons of wheat from South Africa’. After conducting my business, I said 80 million people with more than 100 million hectares of land with plenty of rain and sunshine, but importing food from South Africa hurts me. I am nobody. I am not the World Bank. But it hurts.
The unnamed “great leader” (Karuturi did not say it was Kim Jong-il) asked Karuturi
to invest in agriculture but I had no idea. I only knew Abeba (flower) [business]. But I was offered land near Bako town some 260 km west in Addis. I started cultivation there. In the meantime, the president of Gambella wanted to see me. I asked where the embassy was. Mark my words, I thought Gambella was a different country. Pardon my ignorance. I was told he will visit me at my office. Instead, we met at Ghion Hotel and he said they will give me land in Gambella. Hence, we went to Gambella at the invitation of the president and government of Gambella. We asked for 10 thousand hectares of land… The entire cabinet of Gambella government was in a meeting and said you have to take 300 thousand but said I can only take ten thousand and that was all in my capacity. I was given the absence of choice. The gentlemen after the meeting called me and said we will give you 300 thousand hectares. I said ‘thank you but I only can do with 10 thousand’. They insisted that I should take 300 thousand and I will make the terms but they will not. The government was criticized from many corners for giving away such a huge land at a low price. I didn’t take it. You only can eat one injera at a time. But I put down five and say eat. After some time, I came back and blame you why you couldn’t finish. What is the logic behind that?
In September 2010, Meles relying on the Karuturi deal pompously declared, “We have devised a plan which will enable us to produce surplus and be able to feed ourselves by 2015 without the need for food aid.” (In 2016, 15 million Ethiopians are facing starvation.)
Karuturi says, “The government didn’t provide a final map of the concession, effectively blocked $180-million of financing by enacting a cereal-export ban, and prevented diesel from reaching the Gambella region near the border of war-torn South Sudan in 2014 on national security grounds.” He says he has “invested $100 million is evidence of implementation efforts and annual floods and government action prevented further progress.”
Karuturi’s story is simple and convincing in the main. I am no judge and manifestly unsympathetic to the T-TPLF (as if you could not guess that). But I find Karuturi’s story credible by the “preponderance of the evidence”, as it were. I have followed the Karuturi project closely over the past 5 years. I have read and examined the “legal documents” in the project and public statements made by Karuturi and T-TPLF officials. I have also examined official documents and publications by the loaners and donors on the impact of the Karuturi project in Gambella along with diverse independent studies, analyses and commentaries by the international media and human rights organizations.
My conclusion is that Karuturi was not set to fail. He was doomed to fail.
The T-TPLF in my view had two strategies for their end game in the Karuturi deal: 1) Karuturi succeeds in developing the land and in creating a massive commercial agricultural enterprise and they would find a way to expropriate it all and distribute it among their families, cronies, friends and supporters; 2) Karuturi fails and they would seize all of his equipment and investments and kick him out cold. In both cases, the T-TPLF wins! Karuturi knows it is now dinner time for the T-TPLF vultures!
Of course, there is nothing new in what the T-TPLF did to Karuturi. He should not feel he is a special victim. They have been doing variations of the-invest-and-rip-off scam for the past 24 years.
If Karuturi had done his due diligence before he signed up, he would learned a lot. But he did not.
How ironic that back in March 2011, Karuturi project manager in Ethiopia Karmjeet Sekhon laughed euphorically as he explained how they got the land in Gambella:
‘We never saw the land. They gave it to us and we took it. Seriously, we did. We did not even see the land. (Triumphantly cackling laughter) They offered it. That’s all. It’s very good land.
Does the “rose king of the world” walk around with rose-colored glasses when he does business deals? For crying out loud, how in the world does one make a business decision to invest tens of millions of dollars on land one has never seen?
The Karuturi-T-TPLF deal reminds me of “Puff the Magic Dragon and Sandy in the Land of Living Lies” chatting about “purple cows that no one has ever seen” or “the pink elephants that some see too often.”
Indeed, if Karuturi had done his due diligence before he signed up, he would have learned that many thousands of Diaspora Ethiopians had returned to Ethiopia to invest, asked by the T-TPLF to submit their business plans, waited for months to get approval only to find out suddenly some T-TPLF crony had launched exactly the business for which they had submitted in their plans?
If Karuturi had done his due diligence before he signed up, he would have learned about the scores of Diasporan investors who were driven out of their successful businesses after being hit with a big tax bill and had their business auctioned off to T-TPLF cronies and supporters.
If Karuturi had done his due diligence before he signed up, he would have learned of the hundreds of legitimate business people in Ethiopia whose businesses have been muscled into by T-TPLF leaders or their family members, cronies and friends and forced to take them on as silent or not-so-silent partners.
If Karuturi had done his due diligence before he signed up, he would have known of so many legitimate businessmen in and out of Ethiopia who are forced to front businesses for the T-TPLF and their cronies and conceal the true identity of the true T-TPLF owners.
In 2011 Global Financial integrity reported, “Ethiopia lost $11.7 billion to outflows of ill-gotten gains between 2000 and 2009.” Ever wonder who has that kind of money and how it was illicitly “flown” out of the country?
All the T-TPLF did with Karuturi is up their game to the international level. It is the same old scam, just a foreign sucker.
I find one thing particularly strange. The T-TPLF always demands to see the business plans of even small investors before giving out small parcels of land. How is it that the T-TPLF gave away 100 thousand hectares of land to a foreign guy who has never set foot in or seen the land?
Truth be told, this even worse than what they used to do in the old feudal order in Ethiopia where they granted land by declaring “the land is yours as far as the eye can see” (ay’ne gemed).
This is just wild, mind-boggling, simply incredible!
I am sure there will be some who will accuse me of cynicism, siding with Karuturi, hating on the T-TPLF, blah, blah… All I can say is, it is what it is!
All I can say is my analysis and prediction in March 2011 was right on the button. Deal with it!
The battle between the defiant “lion of Gambella” and the “hyenas of the T-TPLF”
Karuturi, the self-proclaimed “lion of Gambella” defiantly declares he will vindicate his rights.
He says the T-TPLF cancellation “amounts to expropriation, which the bilateral investment treaty says must be accompanied by market-value compensation.”
Karuturi goes even further in his defiance. “I challenge [any official] to touch my land. Then they will face the consequences in the international court of justice. I am only half Ethiopian. I have spent ten years of my life here. I will challenge you to an open political debate on this. I have no right to talk beyond this point because I don’t hold Ethiopian citizenship. I’m just a guest in this country.”
For “a half-Ethiopian”, Karuturi pulls no punches.
Karuturi says, “I am the lion who went to Gambella. Wounded maybe, but I am still a lion. I am not bragging or boasting.”
Whatever I think of Karuturi the businessman, I think Karuturi the man is a man of guts, raw guts.
For Karuturi to get in the faces of the T-TPLF thugs and tell them they are not going to thug him out his land takes big balls.
Respect, Mr. Karuturi! You will no doubt lose your money to thugs, but I like the way you stand up for your rights. “Damn the torpedoes! Full speed ahead.”
I don’t know if it is bravado when Karuturi says he will continue to fight for his property and lease rights. Reda taunted him to try his “legal option”.
In T-TPLF kangaroo (monkey) court? Forget ‘bout it!
I can’t wait to see a battle between a “wounded lion” and a cackle of hyenas and a wake of vultures.
It is true that in the Gambella region, there are regular “skirmishes” between lions and hyenas.
The only question here is the outcome of a battle between a “wounded lion” and a cackle of spooked hyenas and ravenous vultures. How ironic is it for life to imitate wildlife?
Karuturi says he is prepared to invoke “the bilateral investment protection agreement between India and Ethiopia” to “protect” himself from “some jokers.” He did not mince words when he said, “This is a threat because enough is enough. I don’t have to defend myself. I challenge [any official] to touch my land.” (Hot diggity dog! Karuturi has got balls.)
The standard dispute resolution mechanisms in all of India’s bilateral investment protection agreements provide for resolution sequentially: 1) negotiation, 2) if disputes are not settled within six months, submission of dispute to “an arbitral tribunal; 3) if the parties cannot agree on arbitrators the “President of the International Court of Justice make the necessary appointments.” The arbitral tribunal is empowered to “determine its own procedure.”
Karuturi suggests he is going to seek resolution of his dispute with the T-TPLF in arbitration. (Do the T-TPLF thugs know what arbitration or the legal and political significance of a bilateral investment protection agreement?)
It is to be noted that Article 12 of the “land rental agreement” provides, “The governing law for operation under this agreement shall be the law of Ethiopia.” Article 17 provides that “disputes shall be referred to Ethiopian Federal Court.”
In my analysis, arbitration does not look good for the T-TPLF.
The last time the T-TPLF submitted to arbitration in 2002, they were ordered to give up Badme on the Ethiopian-Eritrean border. (I have never been able to figure it out: How can a country beat the invader decisively over a piece of territory on the battlefield at a cost of the lives of tens of thousands of its young people and then turn around and agree to hand over the same territory to the invader in arbitration? Ain’t that just messed up!)
The fact of the matter is that the T-TPLF “land rental agreement” is a poorly drafted legal instrument which has more holes than Swiss cheese. It is going to give a lot of laughter to the arbitratos and drive them nuts when they try to figure it out.
I must emphatically say that the person(s) who drafted the “land rental agreement” is so clueless and ignorant that s/he should be ashamed of him/herself.
I find it mind-boggling and madding that a large chunck of my Ethiopia should be bargained away so casually by a gang of ignorant thugs who have no idea of the value or significance of legal instruments in international commercial and investment transactions. The doggone amateurs!
(I shudder thinking about the secret deal the T-TPLF cut to hand over Ethiopian land to the Sudan or the purported deal with Egypt on the Nile dam. There ain’t nobody mindin’ the store. I mean the country.)
Anyway, if there is ambiguity or questions pertaining to intent or textual interpretation in a contract, the general legal standard is that the ambiguity and doubt is construed against the party that drafted the agreement.
I can imagine T-TPLF’s “lawyers” throwing their hands in the air and exhaling a few choice expletives as they scurry about trying to figure out what the hell it was they cut and pasted in the “land rental agreement”.
I have no doubts that Karuturi’s lawyers will dice and slice that “agreement” until the words fall of the paper.
There are so many technical and substantive problems with the “land rent agreement”, I stopped counting.
Here are just a few simple, obvious and threshold issues that cast grave doubt on the “agreement(s)” between Karuturi and T-TPLF/Gambella regional government.
First, how many agreements exist pertaining to the Gambella project? Karuturi says there is one agreement with 300 thousand acres which he was coerced to sign with the Gambella regional government and another with the T-TPLF referenced above. Which one is the valid agreement that is enforceable at law?
Second, who actually “owns the land and has authority to lease it or contract it. Is it within the jurisdiction of the “federal” or “regional” governments to lease out or contract land in the regions? What is the constitutional authority of the “federal government” to override the regional governments and dispose of large tracts of land in the jurisdiction of the regional governments? Was it unconstitutional for either the “federal” or “regional” government to enter into the “agreement(s)”?
Third, is the “land rent agreement” a “land lease agreement”? The “land rent agreement” uses the two phrases interchangeably. Karuturi says he signed a “long-term lease”.
Fourth, the “land rent agreement” is completely unclear and in various parts manifestly ambiguous with respect to the intention of the parties. From Karuturi’s interview statement, he intended to enter into a “lease” with the Gambella regional government reserving substantial rights and privileges. The T-TPLF land rent agreement” treats Karuturi as an ordinary rental tenant they can kick out with minimal notice. If the intention of the parties cannot be determined from the terms of the “agreement(s)”, is the “agreement(s)” legally binding on the parties?
Fifth, Karuturi claims he was forced to accept more land than he wanted and asserts he signed one or both “agreements” involuntarily. Did Karuturi sign either the “lease” agreement or the “land rent agreement” under duress, coercion or undue influence? If so, is he legally entitled to void either or both and demand damages jointly and severally from the T-TPLF and the Gambella regional government?
Sixth, was there mutual mistake in the drafting and signing of the “agreement, e.g. the T-TPLF thought they were entering into a “rental land agreement” while Karuturi believed he was entering into a “lease agreement”? Is an agreement entered into in mutual mistake enforceable?
Seventh, was there a material misunderstanding between the parties on a core element of the agreement, e.g. Karuturi believed disputes will ultimately be resolved in arbitration and the T-TPLF believes local courts exclusive jurisdiction?
Eight, if there is a conflict of laws (what law should be applied to the case at hand), as it is very likely to occur, who and how will it be resolved?
Ninth, if the T-TPLF refuses to submit to arbitration per the bilateral agreement (as I expect it would be claiming some sort of sovereign immunity [legal claim a state cannot be sued in civil court]), could Karuturi obtain a default judgement? (If the T-TPLF refuses to submit to arbitration pursuant to the bilateral agreement, they might as well kiss any possible future foreign investment in Ethiopia good bye because there is not an investor in the world who is going to invest in a country that does not live up to its arbitration agreement and agree to submit all contractual disputes for final determination only to local courts. [I did not say local kangaroo (monkey) courts.])
I would rather not mention the tenth issue because I believe, after prolonged analysis and deliberation, that this one issue could make all other issues irrelevant, and singularly make or break the case in arbitration and determine legal victory or defeat for either or both parties. I make this assertion with all humility.
Since I have said I couldn’t care less about the legal outcome of the Karuturi-T-TPLF dispute, it would be hypocritical of me to reveal the nature of the decisive issue now.
“The power of India”
Karuturi’s political ace in the hole is the “power of India”.
Karuturi says there is hell to pay for messing with him. “You think you can scare me? Go try somewhere else. As far as the law is concerned, I have rights that I have not enforced but I have been neglected by some jokers. The bilateral investment protection agreement between India and Ethiopia protects me. Touch me, then you will see the power of India. This is a threat because enough is enough. I don’t have to defend myself.”
India and Ethiopia signed a bilateral investment protection agreement on July 5, 2007.
According to an official T-TPLF document, “India is the second largest foreign investor in Ethiopia with approved investment of US $ 4.8 billion.” Bilateral trade between the two countries as of 2013 was USD$1.082 billion, of which USD$1.053 billion represented India’s export to Ethiopia. India imported a mere USD$28.210 million worth of semi-precious stones, leather cotton and other commodities. According to the same document, “Ethiopia is the single biggest recipient of Indian LOCs [line of credit] in Africa. This includes US $ 65 million for a power transmission and distribution project under rural electrification programme, US$ 640 million for development of three sugar factories and US $ 300 million for a Railway Line Project (sector Asaita in Ethiopia to Tadjourah port in Djibouti).”
They say “money talks and bulls**t walks.” Given the foregoing data, I don’t think Karuturi is bluffing when he says, “Touch me and you will find out the power of India.”
I am not sure the Government of India will stand idle as one of its citizens is being ripped off in broad daylight in a foreign investment venture. India is spreading its global investment footprint. In 2014, Indian companies invested nearly $10 billion internationally. If the Indian Government lets the Karuturi case slide, that would set a very bad precedent for all Indian investments worldwide, and particularly Africa. It seems logical to me that the Indian Government will act in a manner that will preserve and protect Karuturi’s rights under the bilateral agreement. Alternatively, the failure to act by India will set a bad precedent of impunity for Indian investors elsewhere.
Suffice it to say, the T-TPLF would be biting the hand that feeds it by kicking around Karuturi like a stray canine. But I have no doubts the ignorant T-TPLF thugs will test the mettle and “power of India.”
Karuturi stuck between “vultures” and “jokers”?
I find it interesting that Karuturi should characterize the T-TPLF as “vultures” and “jokers”.
That reminded me of the lyrics of the old song, “Stuck in the Middle With You”: “Well I don’t know why I came here tonight,/ I got the feeling that something ain’t right,/ Clowns to the left of me,/ Jokers to the right, here I am,/ Stuck in the middle with you.
I imagine Karuturi is now wondering why he came to Ethiopia in the first place. He feels and knows there is something that ain’t right in the deal he made with his T-TPLF partners. Alas! He now finds himself stuck in the middle of T-TPLF jokers and clowns, and they are laughing at him. (I did not say like laughing hyenas.)
The only thing that can “save” Karuturi is the “power of India”. I am not even sure what that means; but I am guessing it means the Government of India will take retaliatory measures against the T-TPLF for ripping off Karuturi. I don’t think the T-TPLF leaders care. They are playing out their own end games as a groundswell of popular unrest spreads throughout the country.
Making a deal with the devil and losing
Like I said, I don’t think Karuturi was set to fail. I believe he was doomed to fail when he made his deal with the T-TPLF.
That’s what happens when you make a deal with the dEvil. You lose every time.
Put another way, Karuturi played the house in Las Vegas and lost. The deck was stacked against him from day 1.
I will say it again. I make no distinction between thugs and those who do business with thugs. It does not matter to me what Karuturi and T-TPLF do to each other. The fact is they made their bed together, now they must lie in it.
I have often invoked Goethe’s “Faust” to explain what it is like to deal with the T-TPLF. (In fact, I invoked the Faust metaphor in one of my earliest commentaries in 2006.) Faust makes a deal with the Devil, exchanging his soul for unlimited knowledge and worldly pleasures. Faust got what he wanted. The Devil got his soul. But ultimately Faust was saved through grace.
Karuturi exchanged his soul for all the land in Gambella. He got the land. Now he must turn over his soul, all of the hard work he did for 10 long years, to the T-TPLF. Could he be saved by the “power of India”?
Karuturi must now face (listen to) the music. The T-TPLF “vultures” will pick his pocket for every dime he’s got and don’t got. Will he walk out of T-TPLF Ethiopia empty handed? Will the “wounded lion of Gambella” end up on the dinner plate of hyenas. (Excuse me, I meant “vultures”.)
That remains to be seen.
Karuturi must think life just ain’t fair, is it? Perhaps it is best to ask this question of the tens of thousands of people in Gambella who were displaced and “villagized” to make way for the Karuturi project.
I do not think Karuturi is a bad man. But I can’t imagine how the “rose king of the world” could fall for such an obvious scam. At one point in the interview, Karuturi says, “I must have been stupid.” I don’t think so. I think he was just a bit too greedy. He must have salivated when Meles and his henchmen talked about giving him 100 thousand hectares for pennies.
Greed is so destructive. It destroys everything. A lesson learned too late by Karuturi.
Karuturi had issues in his investments as anyone with such a large commercial venture would have particularly in Africa. I don’t believe Karuturi is a con man. But I believe he has been conned into accepting hundreds of thousands of hectares of land he did not want and could not be reasonably expected to develop in just 5 or 6 years.
Karuturi is a businessman and like all businessmen all he wants to make is profit. I don’t blame him for that. Yeah, yeah… he wants to feed the starving people of Ethiopia and all that.
But after all is said and done, it is undeniable Karuturi spent tens of millions of dollars of his own money to make the Gambella project work. He did not take the project to lose millions of dollars. But it is equally undeniable that he came to Ethiopia first and foremost to make a profit.
I have no reason to believe that Karuturi is faking it when he says, “I love Ethiopia” he does not mean it. Or he is saying it to ingratiate himself with the people. I think Karuturi says what he means and means what he says. I don’t even care if he said it to be politically correct.
Of course, I have humongous problems in the way Karuturi went about getting the land in Gambella.
I have humongous problems in the way Karuturi treated my people in Gambella, the way he displaced them and did not provide the education and infrastructure he promised. I am deeply saddened he just did not care about the people of Gambella.
As I have noted in previous commentaries, Karuturi would have had a much easier time if he had talked to the people of Gambella in developing his project, listened to what they have to say and made good faith efforts to address their concerns and needs and meet them half way. I have no doubts whatsoever Karuturi would have succeeded if he had worked with the people (not the thieving T-TPLF clones) of Gambella. But he underestimated and ignored the people of Gambella and put his faith in the T-TPLF. Now he finds himself in a jam.
Karuturi was a daredevil when he decided to deal with the T-TPLF. Now he has learned that if you dare the devil, if you play dice with the devil, you lose every time!
Karuturi may take solace in the wisdom of the angels in Act V of “Faust”: “He who strives on and lives to strive/ Can earn redemption still.”
Karuturi may not get divine redemption for his 10 years of sweat in Gambella, but he may find redemption through the “power of India”.
Talking about tears, I hope he will now feel sympathy for the thousands of people in Gambella who were displaced and impoverished by his project. I hope he will not leave them high and dry (no pun intended) on the flood plains of Gambella, though he may not have a choice in the matter at this late stage in the game.
Fuast ultimately survived and thrived after he lost his deal with Mephistopheles.
So will Karuturi!
For what it is worth, as consolation, I will share one piece of advice found in the conversation between Lord Krishna and the warrior Arjuna in the Bhagavad Gita: “Perform work in this world, Arjuna, as a man established within himself – without selfish attachments, and alike in success and defeat.”
The hundreds of victims who lost their shirts in T-TPLF switcheroo games know who they are. Some found out the hard way that you can’t con a con man.
Karuturi may have spent 10 years to develop his commercial farm in Gambella and will likely lose tens of millions of dollars of his investment. Things often go wrong and “the best laid plans of mice and men often go awry.” C’est la vie!
I hope Karuturi made his investments out of love of the Ethiopian people than love of money.
I believe doing something with unconditional love to be the essence of Krishna’s advice to Arjuna. If Karuturi believes he has done what he has done “without selfish attachments” and out of love of the Ethiopian people, he would have lost millions but would stand to gain the ultimate prize. He would have found his karma in his dharma.
Postscript:
In all of the Karuturi -T-TPLF hullabaloo, one need not forget the lasting impact this dispute could have on future foreign investment in Ethiopia.
Karuturi says the T-TPLF has chased out every foreign investor from the country. “The Ethiopian government has given some three or four million hectares but today except for Karuturi and Saudi Star you can’t show me the third foreign company in commercial agriculture here. All have left and run away. Do you want me to run away too?” (Karuturi doesn’t have to worry about running away. The T-TPLF will stampede him out of town!)
Karuturi is saying, “All investors in Ethiopia! Beware!”
In a profoundly poignant observation, Karuturi said any international investor who fails in Africa will be dinner for vultures. Karuturi submits himself as Exhibit A in Ethiopia.
Karuturi’s message to anyone seeking to invest in Ethiopia with the T-TPLF is chillingly frightening. He says, only investors who can guarantee 100 percent success need invest or they are doomed to become carrion for “vultures” that can’t “wait for [them] to die and then eat [them] well.”
I have learnt one thing in my ten years of wonderful journey in Ethiopia. Don’t try but if you try you should succeed. If you fail you will be crucified. Who the hell are you to crucify me? Failure is a not acceptable here. But the Silicon Valley in the US says that failure is treasure. But in Africa, if you fail you are finished. If you fall, the vultures come and wait for you to die and then eat you well. I am not asking anybody in the government or anybody in the banking system to help me or nurse me to get back to health. I am not asking for help and I have not troubled anybody. I am trying to do what I believe is a noble job which is creating food.
In any case, if the T-TPLF does not treat Karuturi with soft gloves and part with him amicably, they should be assured that he will prove to be one formidable legal adversary and their worst nightmare in their eternal quest to scam other international investors.
“In Africa, if you fail you are finished. If you fall, the vultures come and wait for you to die and then eat you well.” Sai Ramakrishina Karuturi, founder and managing director of Karuturi Global Ltd., describing his failed venture in Ethiopia.”
Related commentaries:
“Karuturistan, Ethiopia: The Fire Next Time?”, http://almariam.com/2011/10/16/karuturistan-ethiopia-the-fire-next-time/
Ethiopia: A Country for Sale,” http://www.pambazuka.net/en/category.php/features/72121
“Bye, Bye Karuturistan, Ethiopia!”, http://almariam.com/2015/02/22/bye-bye-karuturistan-ethiopia/
The Wrath of Karuturi and the “Power of India” in Ethiopia
Posted in Al Mariam's Commentaries By almariam On January 17, 2016Authors note: I have written this commentary not because I care about the legal dispute between Karuturi and the T-TPLF over a land deal in Gambella. I could not care less how thugs and those who do business with thugs resolve or do not resolve their disputes.
But I am deeply concerned about the economic and social fallout of the Karuturi-TPLF debacle. Tens of thousands of people have been evicted from their land, relocated and “villagized” to make the Karuturi project possible in Gambella. Once self-sufficient small-scale farmers and pastoralist communities have been uprooted and reduced to abject poverty and forced to survive on food aid.
What will happen to the permanently displaced population of Gambella now that the Karuturi project is no more? What remedial actions are in place or planned to rehabilitate and repatriate the displaced population and mitigate the ecological destruction caused by the Karuturi project? What are the potential negative consequences and fallout of the Karuturi project for future foreign investments in Ethiopia?
In this commentary, I address only a few of the many issues in the convoluted and tangled legal web Karuturi and T-TPLF have weaved for themselves in their Gambella Gambit.
“Touch me, then you will see the power of India”
Sai Ramakrishina Karuturi, founder and managing director of Karuturi Global Ltd, the self-proclaimed “rose king of the world” and “lion of Gambella” crowed, “I have invented and discovered commercial farming in Ethiopia… Commercial farming by foreign investors has never been thought of as a potential venture. Karuturi was the first to do.”
Whoa! Karuturi is just blowing smoke or he has not done his due diligence. There were commercial farms in Ethiopia under the imperial government.
Prof. Edmund Keller in his book “Revolutionary Ethiopia: From Empire to People’s Republic” at p. 127 writes:
So neither the T-TPLF nor Karuturi has nothin’ on H.I.M. Haile Selassie when it comes to commercial agriculture. I just want Ethiopia’s young people to know an indisputable fact in their history.
In a much ballyhooed “Land Rent Agreement” [Land Rent Contractual Agreement Made Between Ministry of Agriculture and Rural Development and Karuturi Agro Products Plc], the T-TPLF handed over to Karuturi a “100,000 hectares” on “long term land lease” with a contingency for another 200,000.
Or did it?
It is now a highly disputed legal question what the T-TPLF and Karuturi did in their dealings over land in Gambella. Karuturi implicitly challenges not only the validity of his “agreement” with the T-TPLF but also the very nature of the legal instrument defining their dealings.
Karuturi says he has a “lease” with the T-TPLF. The T-TPLF document says Karuturi has a “land rent” agreement.
The plot thickens. According to Karuturi, there are two different “leases”: one, “the mother document” with the “Gambella government” purportedly granting him 300 thousand hectares and another “agreement which says I will receive 100 thousand hectares to cultivate and 200 thousand more I can get if I want and if I can finish cultivating the 100 thousand.” Karuturi says the “mother document is the Gambella agreement”, not the “copy from the then Ministry of Agriculture” (the “land rent agreement” referenced above).
The state owns all land in Ethiopia. (But who own the state? I mean who is the land lord of all the land in Ethiopia. Does it mean that whoever owns the state in Ethiopia owns Ethiopia?)
In the current dispute, the state controlled by the T-TPLF and the regional state of Gambella which simultaneously claims ownership of the land are both claiming to have properly granted the same land to Karuturi. Which land “agreement” is valid constitutionally and contractually?
If what Karuturi got is a “land rent” from the T-TPLF, then the T-TPLF would be the land lord? If Karuturi has a “lease”, as he claims from the Gambella regional government, then the privity (legal relation) will one of lessor and lessee with completely different set of obligations, privileges and immunities.
Is the T-TPLF or the Gambella government “agreement” the controlling legal instrument defining Karuturi’s rights and obligations?
The T-TPLF “land rent agreement” in the very first sentence of the first paragraph states, “This Land Lease Agreement is made…” Yet, the “land rent agreement” is captioned, “LAND RENT CONTRACTUAL AGREEMENT…”
Is the T-TPLF drafted “LAND RENT CONTRACTUAL AGREEMENT MADE BETWEEN MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT AND KARUTURI AGRO PRODUCTS Plc” a “lease” or a “land rent contract”?
Whether the “agreement” is ultimately characterized as a “lease” or “land rent” before an impartial tribunal (arbitration) will be one of the decisive factors in the disposition of the dispute between Karuturi and the T-TPLF.
Under the so-called ethnic federalism scheme (I did not say scam), does the “federal government” or the “regional governments” have precedence in the disposition of land in the regional jurisdictions?
Karuturi further claims, “When the agreement was drafted I pleaded with them not to put 300 thousand [hectares] but they forced and put the amount stated.”
He also says he wanted only 10 thousand hectares not 300 thousand.
Did Karuturi sign the “land rent agreement” or some other “lease” under duress?
Close scrutiny of the T-TPLF-Karuturi “land rent” or “lease” agreements shows a fuzzy, tangled and convoluted legal relationship.
The T-TPLF cancelled its “agreement” with Karuturi because Karuturi has allegedly “developed” only 1,200 hectares, far below expectations. T-TPLF communications minister Getachew Reda said the T-TPLF had given “Karuturi extensions for a long time.”
Reda daftly defended the “cancellation” and taunted Karuturi, “If he thinks he has a legal option, let him try it.” (It is not clear if Reda was taunting Karuturi to try his “legal option” in T-TPLF kangaroo [monkey] court. The T-TPLF story line for “cancelling” the “agreement” just does not pass the smell test. I would believe Pinocchio first before I believe the T-TPLF. As far as I am concerned, the “LF” in the TPLF stands for Lie Factory. Like it or not, I am just telling it like it is!)
Is six years or less enough time to clear out and commercially develop agriculture in an area the size of wales with challenging weather and environmental conditions?
When asked how long it will take him to develop the land, Karuturi flipped the question on the T-TPLF. “When a hot spring came in Gilgel Gibe III [dam], could you tell me how long it is going to take to generate electricity? You tell me. I was sitting in my house with a generator running because for two years there was not enough power.” The T-TPLF began construction on Gibe III in 2008 and it has yet to generate any meaningfully measurable electricity to date. Supposedly it came online in October 2015.
There is certainly no performance schedule or “development” deliverables in the T-TPLF “land rent agreement”. There are no benchmarks or metrics in the 9-page boilerplate “land rent agreement” to apply and demonstrate non-performance on the part of Karuturi. There is no textual basis in the “land rent agreement” to determine whether Karuturi met or failed to meet his performance obligations.
Reda’s claim of “prolonged extensions” as a basis for total breach is legally meaningless within the boilerplate language of the “land rent agreement”.
When the T-TPLF notified Karuturi that his project had been cancelled, a defiant Karuturi said, “I don’t recognize this cancellation. ‘The termination amounts to expropriation, which the bilateral investment treaty says must be accompanied by market-value compensation.”
Karuturi does not have any problems with Ethiopia or its people. He publicly proclaims his love for Ethiopia. “Ethiopia is a very orthodox country. They have very strong values, very strong customs which are both its strength and weakness. I am a friend of Ethiopia. I came here because I love this country. I love the place and I have invested a lot of my money in this country.” I have no reason to doubt his sincerity, but I don’t understand how one can love a people yet watch them idly as they are being displaced wholesale and villagized by the tens of thousands and reduced to abject poverty?
Talking about loving Ethiopia, I have never heard any T-TPLF leader ever proclaim publicly, “I love Ethiopia” or even “I am a friend of Ethiopia”. I will eat crow if anyone could disprove me on this. That’s saying a helluva lot by a vegetarian!)
Karuturi’s problem is the T-TPLF. He says, in so many words, he was ripped off by the T-TPLF. Reading between the lines in the interview, Karuturi screams that he has been took! He’s been hoodwinked, bamboozled, duped and conned! By the T-TPLF.
Back in 2012, Karuturi told The Telegraph, “When it’s high tide you’ve got to sail and when the tide is low, you’ve got to make sure that you don’t get sandbagged.”
Was Karuturi actually stonewalled, fleeced, gypped, taken for a ride and the cleaners, chiseled and flimflammed by the masters of flimflam?
In 2016, Karuturi found out that not only has he been sandbagged in low tide, he was indeed left high and dry and twisting in the wind in his Gambella Gambit.
I told you so, Karuturi, “The hand that gaveth the free land is the hand that taketh away…”
I knew Karuturi would be taken for a ride and then to the cleaners even before the ink had dried on his “lease” (that is what he calls it) with the T-TPLF (?) or Gambella government (?).
It is really too bad Karuturi figured it all out at the very end. In his interview Karuturi said, “In Africa, if you fail you are finished. If you fall, the vultures come and wait for you to die and then eat you well.”
Well, Karuturi should have seen the T-TPLF vultures swooping in on him when they offered him 100 hundred thousand acres sight unseen. It was like the old land scams of the 1960s and 70s in the U.S. state of Florida.
Unless Karuturi is extremely visually challenged, he could have seen he was dealing not with doves but vultures. Isn’t it a little late now for Karuturi to complain about buzzards picking his bones clean?
Of course, I “knewed” it. I just “knewed” it from day 1 what Karuturi’s trip in the underworld was going to be like. I knew exactly how the Karuturi project was going to go down.
In my March 2011 commentary, “Ethiopia: Country for Sale”, I told Karuturi to “beware of those bearing free gifts”, that is free land.
I told Karuturi he has “no idea how cunning, shrewd, tricky, wily and crafty the free land-givers are.” I told him don’t do it or you will regret it! I told him, those who have given you “free land understand the power of greed in the hearts and minds of the greedy.”
In helpless resignation, I wistfully cautioned Karuturi not to fall for the T-TPLF scam:
Karuturi admitted in his recent interview that friends had advised him not to do it for other reasons. “Some Ethiopian friends of mine were telling me its madness to go to Gambella. But I said I will manage; and I thanked them for their concerns. But I went to Gambella with a purpose of increasing food production in this country. But I don’t know since when that has become a crime. I have put my money and I have developed my farm.”
It was not madness to go to Gambella. It was madness to trust the promise of the T-TPLF. A T-TPLF promise is worth a promise to deceive. A lesson learned too late by Karuturi.
So, in January 2016, all of my predictions came down tumbling true.
I hate to say it; and I certainly get no pleasure from saying it. But I will say it. I was right all along about the Karuturi deal. I was right from the get go! I pegged the T-TPLF deal for what it was. A scam!
Was Karuturi set to fail?
It is arguable whether Karuturi is having “buyer’s remorse” now that the “vultures” are swooping in as his project “waits to die”.
What was Karuturi thinking when he signed the deal with the T-TPLF? (That is a trick question. He wasn’t.)
Perhaps the “world king of roses” was wearing rose-colored glasses when he signed the deal with the T-TPLF. “That which we call a rose by any other name would smell as sweet.” But is a “land rent agreement” by any other name a “lease”?
Karuturi claims he asked only for 10 thousand hectares because that was all he was able to develop at the time but was forced to accept 100 thousand acres. Is that setting him up to fail? He metaphorically explains that if one could eat only one injera (Ethiopia’s national “bread”) but is given five, is it fair to blame the person for not eating the remaining four? He’s got a point.
Did Karuturi really believe the T-TPLF would uphold their end of the bargain? If he believed the late Meles and his T-TPLF will let him win in Gambella, he is a damn fool.
Karuturi ignored the old maxim “caveat emptor” (buyer beware) at his own peril.
Meles and his T-TPLF gang know how to play one game only. Zero sum. That means they win 100 percent of the time; everybody loses by 100 percent every time.
Don’t believe me? Then answer this question: By what percentage did the T-TPLF win the May 2015 election? Well! I can’t hear you. By what percentage?!
Here is an easier question: By what percentage did the T-TPLF win the 2010 election? (Hint: 99.6%.)
I rest my case!
Did Karuturi and Meles set their deal in motion in anticipation of outwitting each other in the end? That is another way of asking if there is honor among jackals?
I don’t know for sure, but I wouldn’t put it past either one of them.
But the way Karuturi presents his side of the story clearly suggests that he did not know he was being conned into making the deal by the “great man holding a great position”, the late cunning master of treachery Meles Zenawi.
Karuturi recalled the fateful day he was snagged into the deal.
The unnamed “great leader” (Karuturi did not say it was Kim Jong-il) asked Karuturi
In September 2010, Meles relying on the Karuturi deal pompously declared, “We have devised a plan which will enable us to produce surplus and be able to feed ourselves by 2015 without the need for food aid.” (In 2016, 15 million Ethiopians are facing starvation.)
Karuturi says, “The government didn’t provide a final map of the concession, effectively blocked $180-million of financing by enacting a cereal-export ban, and prevented diesel from reaching the Gambella region near the border of war-torn South Sudan in 2014 on national security grounds.” He says he has “invested $100 million is evidence of implementation efforts and annual floods and government action prevented further progress.”
Karuturi’s story is simple and convincing in the main. I am no judge and manifestly unsympathetic to the T-TPLF (as if you could not guess that). But I find Karuturi’s story credible by the “preponderance of the evidence”, as it were. I have followed the Karuturi project closely over the past 5 years. I have read and examined the “legal documents” in the project and public statements made by Karuturi and T-TPLF officials. I have also examined official documents and publications by the loaners and donors on the impact of the Karuturi project in Gambella along with diverse independent studies, analyses and commentaries by the international media and human rights organizations.
My conclusion is that Karuturi was not set to fail. He was doomed to fail.
The T-TPLF in my view had two strategies for their end game in the Karuturi deal: 1) Karuturi succeeds in developing the land and in creating a massive commercial agricultural enterprise and they would find a way to expropriate it all and distribute it among their families, cronies, friends and supporters; 2) Karuturi fails and they would seize all of his equipment and investments and kick him out cold. In both cases, the T-TPLF wins! Karuturi knows it is now dinner time for the T-TPLF vultures!
Of course, there is nothing new in what the T-TPLF did to Karuturi. He should not feel he is a special victim. They have been doing variations of the-invest-and-rip-off scam for the past 24 years.
If Karuturi had done his due diligence before he signed up, he would learned a lot. But he did not.
How ironic that back in March 2011, Karuturi project manager in Ethiopia Karmjeet Sekhon laughed euphorically as he explained how they got the land in Gambella:
Does the “rose king of the world” walk around with rose-colored glasses when he does business deals? For crying out loud, how in the world does one make a business decision to invest tens of millions of dollars on land one has never seen?
The Karuturi-T-TPLF deal reminds me of “Puff the Magic Dragon and Sandy in the Land of Living Lies” chatting about “purple cows that no one has ever seen” or “the pink elephants that some see too often.”
Indeed, if Karuturi had done his due diligence before he signed up, he would have learned that many thousands of Diaspora Ethiopians had returned to Ethiopia to invest, asked by the T-TPLF to submit their business plans, waited for months to get approval only to find out suddenly some T-TPLF crony had launched exactly the business for which they had submitted in their plans?
If Karuturi had done his due diligence before he signed up, he would have learned about the scores of Diasporan investors who were driven out of their successful businesses after being hit with a big tax bill and had their business auctioned off to T-TPLF cronies and supporters.
If Karuturi had done his due diligence before he signed up, he would have learned of the hundreds of legitimate business people in Ethiopia whose businesses have been muscled into by T-TPLF leaders or their family members, cronies and friends and forced to take them on as silent or not-so-silent partners.
If Karuturi had done his due diligence before he signed up, he would have known of so many legitimate businessmen in and out of Ethiopia who are forced to front businesses for the T-TPLF and their cronies and conceal the true identity of the true T-TPLF owners.
In 2011 Global Financial integrity reported, “Ethiopia lost $11.7 billion to outflows of ill-gotten gains between 2000 and 2009.” Ever wonder who has that kind of money and how it was illicitly “flown” out of the country?
All the T-TPLF did with Karuturi is up their game to the international level. It is the same old scam, just a foreign sucker.
I find one thing particularly strange. The T-TPLF always demands to see the business plans of even small investors before giving out small parcels of land. How is it that the T-TPLF gave away 100 thousand hectares of land to a foreign guy who has never set foot in or seen the land?
Truth be told, this even worse than what they used to do in the old feudal order in Ethiopia where they granted land by declaring “the land is yours as far as the eye can see” (ay’ne gemed).
This is just wild, mind-boggling, simply incredible!
I am sure there will be some who will accuse me of cynicism, siding with Karuturi, hating on the T-TPLF, blah, blah… All I can say is, it is what it is!
All I can say is my analysis and prediction in March 2011 was right on the button. Deal with it!
The battle between the defiant “lion of Gambella” and the “hyenas of the T-TPLF”
Karuturi, the self-proclaimed “lion of Gambella” defiantly declares he will vindicate his rights.
He says the T-TPLF cancellation “amounts to expropriation, which the bilateral investment treaty says must be accompanied by market-value compensation.”
Karuturi goes even further in his defiance. “I challenge [any official] to touch my land. Then they will face the consequences in the international court of justice. I am only half Ethiopian. I have spent ten years of my life here. I will challenge you to an open political debate on this. I have no right to talk beyond this point because I don’t hold Ethiopian citizenship. I’m just a guest in this country.”
For “a half-Ethiopian”, Karuturi pulls no punches.
Karuturi says, “I am the lion who went to Gambella. Wounded maybe, but I am still a lion. I am not bragging or boasting.”
Whatever I think of Karuturi the businessman, I think Karuturi the man is a man of guts, raw guts.
For Karuturi to get in the faces of the T-TPLF thugs and tell them they are not going to thug him out his land takes big balls.
Respect, Mr. Karuturi! You will no doubt lose your money to thugs, but I like the way you stand up for your rights. “Damn the torpedoes! Full speed ahead.”
I don’t know if it is bravado when Karuturi says he will continue to fight for his property and lease rights. Reda taunted him to try his “legal option”.
In T-TPLF kangaroo (monkey) court? Forget ‘bout it!
I can’t wait to see a battle between a “wounded lion” and a cackle of hyenas and a wake of vultures.
It is true that in the Gambella region, there are regular “skirmishes” between lions and hyenas.
The only question here is the outcome of a battle between a “wounded lion” and a cackle of spooked hyenas and ravenous vultures. How ironic is it for life to imitate wildlife?
Karuturi says he is prepared to invoke “the bilateral investment protection agreement between India and Ethiopia” to “protect” himself from “some jokers.” He did not mince words when he said, “This is a threat because enough is enough. I don’t have to defend myself. I challenge [any official] to touch my land.” (Hot diggity dog! Karuturi has got balls.)
The standard dispute resolution mechanisms in all of India’s bilateral investment protection agreements provide for resolution sequentially: 1) negotiation, 2) if disputes are not settled within six months, submission of dispute to “an arbitral tribunal; 3) if the parties cannot agree on arbitrators the “President of the International Court of Justice make the necessary appointments.” The arbitral tribunal is empowered to “determine its own procedure.”
Karuturi suggests he is going to seek resolution of his dispute with the T-TPLF in arbitration. (Do the T-TPLF thugs know what arbitration or the legal and political significance of a bilateral investment protection agreement?)
It is to be noted that Article 12 of the “land rental agreement” provides, “The governing law for operation under this agreement shall be the law of Ethiopia.” Article 17 provides that “disputes shall be referred to Ethiopian Federal Court.”
In my analysis, arbitration does not look good for the T-TPLF.
The last time the T-TPLF submitted to arbitration in 2002, they were ordered to give up Badme on the Ethiopian-Eritrean border. (I have never been able to figure it out: How can a country beat the invader decisively over a piece of territory on the battlefield at a cost of the lives of tens of thousands of its young people and then turn around and agree to hand over the same territory to the invader in arbitration? Ain’t that just messed up!)
The fact of the matter is that the T-TPLF “land rental agreement” is a poorly drafted legal instrument which has more holes than Swiss cheese. It is going to give a lot of laughter to the arbitratos and drive them nuts when they try to figure it out.
I must emphatically say that the person(s) who drafted the “land rental agreement” is so clueless and ignorant that s/he should be ashamed of him/herself.
I find it mind-boggling and madding that a large chunck of my Ethiopia should be bargained away so casually by a gang of ignorant thugs who have no idea of the value or significance of legal instruments in international commercial and investment transactions. The doggone amateurs!
(I shudder thinking about the secret deal the T-TPLF cut to hand over Ethiopian land to the Sudan or the purported deal with Egypt on the Nile dam. There ain’t nobody mindin’ the store. I mean the country.)
Anyway, if there is ambiguity or questions pertaining to intent or textual interpretation in a contract, the general legal standard is that the ambiguity and doubt is construed against the party that drafted the agreement.
I can imagine T-TPLF’s “lawyers” throwing their hands in the air and exhaling a few choice expletives as they scurry about trying to figure out what the hell it was they cut and pasted in the “land rental agreement”.
I have no doubts that Karuturi’s lawyers will dice and slice that “agreement” until the words fall of the paper.
There are so many technical and substantive problems with the “land rent agreement”, I stopped counting.
Here are just a few simple, obvious and threshold issues that cast grave doubt on the “agreement(s)” between Karuturi and T-TPLF/Gambella regional government.
First, how many agreements exist pertaining to the Gambella project? Karuturi says there is one agreement with 300 thousand acres which he was coerced to sign with the Gambella regional government and another with the T-TPLF referenced above. Which one is the valid agreement that is enforceable at law?
Second, who actually “owns the land and has authority to lease it or contract it. Is it within the jurisdiction of the “federal” or “regional” governments to lease out or contract land in the regions? What is the constitutional authority of the “federal government” to override the regional governments and dispose of large tracts of land in the jurisdiction of the regional governments? Was it unconstitutional for either the “federal” or “regional” government to enter into the “agreement(s)”?
Third, is the “land rent agreement” a “land lease agreement”? The “land rent agreement” uses the two phrases interchangeably. Karuturi says he signed a “long-term lease”.
Fourth, the “land rent agreement” is completely unclear and in various parts manifestly ambiguous with respect to the intention of the parties. From Karuturi’s interview statement, he intended to enter into a “lease” with the Gambella regional government reserving substantial rights and privileges. The T-TPLF land rent agreement” treats Karuturi as an ordinary rental tenant they can kick out with minimal notice. If the intention of the parties cannot be determined from the terms of the “agreement(s)”, is the “agreement(s)” legally binding on the parties?
Fifth, Karuturi claims he was forced to accept more land than he wanted and asserts he signed one or both “agreements” involuntarily. Did Karuturi sign either the “lease” agreement or the “land rent agreement” under duress, coercion or undue influence? If so, is he legally entitled to void either or both and demand damages jointly and severally from the T-TPLF and the Gambella regional government?
Sixth, was there mutual mistake in the drafting and signing of the “agreement, e.g. the T-TPLF thought they were entering into a “rental land agreement” while Karuturi believed he was entering into a “lease agreement”? Is an agreement entered into in mutual mistake enforceable?
Seventh, was there a material misunderstanding between the parties on a core element of the agreement, e.g. Karuturi believed disputes will ultimately be resolved in arbitration and the T-TPLF believes local courts exclusive jurisdiction?
Eight, if there is a conflict of laws (what law should be applied to the case at hand), as it is very likely to occur, who and how will it be resolved?
Ninth, if the T-TPLF refuses to submit to arbitration per the bilateral agreement (as I expect it would be claiming some sort of sovereign immunity [legal claim a state cannot be sued in civil court]), could Karuturi obtain a default judgement? (If the T-TPLF refuses to submit to arbitration pursuant to the bilateral agreement, they might as well kiss any possible future foreign investment in Ethiopia good bye because there is not an investor in the world who is going to invest in a country that does not live up to its arbitration agreement and agree to submit all contractual disputes for final determination only to local courts. [I did not say local kangaroo (monkey) courts.])
I would rather not mention the tenth issue because I believe, after prolonged analysis and deliberation, that this one issue could make all other issues irrelevant, and singularly make or break the case in arbitration and determine legal victory or defeat for either or both parties. I make this assertion with all humility.
Since I have said I couldn’t care less about the legal outcome of the Karuturi-T-TPLF dispute, it would be hypocritical of me to reveal the nature of the decisive issue now.
“The power of India”
Karuturi’s political ace in the hole is the “power of India”.
Karuturi says there is hell to pay for messing with him. “You think you can scare me? Go try somewhere else. As far as the law is concerned, I have rights that I have not enforced but I have been neglected by some jokers. The bilateral investment protection agreement between India and Ethiopia protects me. Touch me, then you will see the power of India. This is a threat because enough is enough. I don’t have to defend myself.”
India and Ethiopia signed a bilateral investment protection agreement on July 5, 2007.
According to an official T-TPLF document, “India is the second largest foreign investor in Ethiopia with approved investment of US $ 4.8 billion.” Bilateral trade between the two countries as of 2013 was USD$1.082 billion, of which USD$1.053 billion represented India’s export to Ethiopia. India imported a mere USD$28.210 million worth of semi-precious stones, leather cotton and other commodities. According to the same document, “Ethiopia is the single biggest recipient of Indian LOCs [line of credit] in Africa. This includes US $ 65 million for a power transmission and distribution project under rural electrification programme, US$ 640 million for development of three sugar factories and US $ 300 million for a Railway Line Project (sector Asaita in Ethiopia to Tadjourah port in Djibouti).”
They say “money talks and bulls**t walks.” Given the foregoing data, I don’t think Karuturi is bluffing when he says, “Touch me and you will find out the power of India.”
I am not sure the Government of India will stand idle as one of its citizens is being ripped off in broad daylight in a foreign investment venture. India is spreading its global investment footprint. In 2014, Indian companies invested nearly $10 billion internationally. If the Indian Government lets the Karuturi case slide, that would set a very bad precedent for all Indian investments worldwide, and particularly Africa. It seems logical to me that the Indian Government will act in a manner that will preserve and protect Karuturi’s rights under the bilateral agreement. Alternatively, the failure to act by India will set a bad precedent of impunity for Indian investors elsewhere.
Suffice it to say, the T-TPLF would be biting the hand that feeds it by kicking around Karuturi like a stray canine. But I have no doubts the ignorant T-TPLF thugs will test the mettle and “power of India.”
Karuturi stuck between “vultures” and “jokers”?
I find it interesting that Karuturi should characterize the T-TPLF as “vultures” and “jokers”.
That reminded me of the lyrics of the old song, “Stuck in the Middle With You”: “Well I don’t know why I came here tonight,/ I got the feeling that something ain’t right,/ Clowns to the left of me,/ Jokers to the right, here I am,/ Stuck in the middle with you.
I imagine Karuturi is now wondering why he came to Ethiopia in the first place. He feels and knows there is something that ain’t right in the deal he made with his T-TPLF partners. Alas! He now finds himself stuck in the middle of T-TPLF jokers and clowns, and they are laughing at him. (I did not say like laughing hyenas.)
The only thing that can “save” Karuturi is the “power of India”. I am not even sure what that means; but I am guessing it means the Government of India will take retaliatory measures against the T-TPLF for ripping off Karuturi. I don’t think the T-TPLF leaders care. They are playing out their own end games as a groundswell of popular unrest spreads throughout the country.
Making a deal with the devil and losing
Like I said, I don’t think Karuturi was set to fail. I believe he was doomed to fail when he made his deal with the T-TPLF.
That’s what happens when you make a deal with the dEvil. You lose every time.
Put another way, Karuturi played the house in Las Vegas and lost. The deck was stacked against him from day 1.
I will say it again. I make no distinction between thugs and those who do business with thugs. It does not matter to me what Karuturi and T-TPLF do to each other. The fact is they made their bed together, now they must lie in it.
I have often invoked Goethe’s “Faust” to explain what it is like to deal with the T-TPLF. (In fact, I invoked the Faust metaphor in one of my earliest commentaries in 2006.) Faust makes a deal with the Devil, exchanging his soul for unlimited knowledge and worldly pleasures. Faust got what he wanted. The Devil got his soul. But ultimately Faust was saved through grace.
Karuturi exchanged his soul for all the land in Gambella. He got the land. Now he must turn over his soul, all of the hard work he did for 10 long years, to the T-TPLF. Could he be saved by the “power of India”?
Karuturi must now face (listen to) the music. The T-TPLF “vultures” will pick his pocket for every dime he’s got and don’t got. Will he walk out of T-TPLF Ethiopia empty handed? Will the “wounded lion of Gambella” end up on the dinner plate of hyenas. (Excuse me, I meant “vultures”.)
That remains to be seen.
Karuturi must think life just ain’t fair, is it? Perhaps it is best to ask this question of the tens of thousands of people in Gambella who were displaced and “villagized” to make way for the Karuturi project.
I do not think Karuturi is a bad man. But I can’t imagine how the “rose king of the world” could fall for such an obvious scam. At one point in the interview, Karuturi says, “I must have been stupid.” I don’t think so. I think he was just a bit too greedy. He must have salivated when Meles and his henchmen talked about giving him 100 thousand hectares for pennies.
Greed is so destructive. It destroys everything. A lesson learned too late by Karuturi.
Karuturi had issues in his investments as anyone with such a large commercial venture would have particularly in Africa. I don’t believe Karuturi is a con man. But I believe he has been conned into accepting hundreds of thousands of hectares of land he did not want and could not be reasonably expected to develop in just 5 or 6 years.
Karuturi is a businessman and like all businessmen all he wants to make is profit. I don’t blame him for that. Yeah, yeah… he wants to feed the starving people of Ethiopia and all that.
But after all is said and done, it is undeniable Karuturi spent tens of millions of dollars of his own money to make the Gambella project work. He did not take the project to lose millions of dollars. But it is equally undeniable that he came to Ethiopia first and foremost to make a profit.
I have no reason to believe that Karuturi is faking it when he says, “I love Ethiopia” he does not mean it. Or he is saying it to ingratiate himself with the people. I think Karuturi says what he means and means what he says. I don’t even care if he said it to be politically correct.
Of course, I have humongous problems in the way Karuturi went about getting the land in Gambella.
I have humongous problems in the way Karuturi treated my people in Gambella, the way he displaced them and did not provide the education and infrastructure he promised. I am deeply saddened he just did not care about the people of Gambella.
As I have noted in previous commentaries, Karuturi would have had a much easier time if he had talked to the people of Gambella in developing his project, listened to what they have to say and made good faith efforts to address their concerns and needs and meet them half way. I have no doubts whatsoever Karuturi would have succeeded if he had worked with the people (not the thieving T-TPLF clones) of Gambella. But he underestimated and ignored the people of Gambella and put his faith in the T-TPLF. Now he finds himself in a jam.
Karuturi was a daredevil when he decided to deal with the T-TPLF. Now he has learned that if you dare the devil, if you play dice with the devil, you lose every time!
Karuturi may take solace in the wisdom of the angels in Act V of “Faust”: “He who strives on and lives to strive/ Can earn redemption still.”
Karuturi may not get divine redemption for his 10 years of sweat in Gambella, but he may find redemption through the “power of India”.
Talking about tears, I hope he will now feel sympathy for the thousands of people in Gambella who were displaced and impoverished by his project. I hope he will not leave them high and dry (no pun intended) on the flood plains of Gambella, though he may not have a choice in the matter at this late stage in the game.
Fuast ultimately survived and thrived after he lost his deal with Mephistopheles.
So will Karuturi!
For what it is worth, as consolation, I will share one piece of advice found in the conversation between Lord Krishna and the warrior Arjuna in the Bhagavad Gita: “Perform work in this world, Arjuna, as a man established within himself – without selfish attachments, and alike in success and defeat.”
The hundreds of victims who lost their shirts in T-TPLF switcheroo games know who they are. Some found out the hard way that you can’t con a con man.
Karuturi may have spent 10 years to develop his commercial farm in Gambella and will likely lose tens of millions of dollars of his investment. Things often go wrong and “the best laid plans of mice and men often go awry.” C’est la vie!
I hope Karuturi made his investments out of love of the Ethiopian people than love of money.
I believe doing something with unconditional love to be the essence of Krishna’s advice to Arjuna. If Karuturi believes he has done what he has done “without selfish attachments” and out of love of the Ethiopian people, he would have lost millions but would stand to gain the ultimate prize. He would have found his karma in his dharma.
Postscript:
Karuturi says the T-TPLF has chased out every foreign investor from the country. “The Ethiopian government has given some three or four million hectares but today except for Karuturi and Saudi Star you can’t show me the third foreign company in commercial agriculture here. All have left and run away. Do you want me to run away too?” (Karuturi doesn’t have to worry about running away. The T-TPLF will stampede him out of town!)
Karuturi is saying, “All investors in Ethiopia! Beware!”
In a profoundly poignant observation, Karuturi said any international investor who fails in Africa will be dinner for vultures. Karuturi submits himself as Exhibit A in Ethiopia.
Karuturi’s message to anyone seeking to invest in Ethiopia with the T-TPLF is chillingly frightening. He says, only investors who can guarantee 100 percent success need invest or they are doomed to become carrion for “vultures” that can’t “wait for [them] to die and then eat [them] well.”
In any case, if the T-TPLF does not treat Karuturi with soft gloves and part with him amicably, they should be assured that he will prove to be one formidable legal adversary and their worst nightmare in their eternal quest to scam other international investors.
“In Africa, if you fail you are finished. If you fall, the vultures come and wait for you to die and then eat you well.” Sai Ramakrishina Karuturi, founder and managing director of Karuturi Global Ltd., describing his failed venture in Ethiopia.”
Related commentaries:
“Karuturistan, Ethiopia: The Fire Next Time?”, http://almariam.com/2011/10/16/karuturistan-ethiopia-the-fire-next-time/
Ethiopia: A Country for Sale,” http://www.pambazuka.net/en/category.php/features/72121
“Bye, Bye Karuturistan, Ethiopia!”, http://almariam.com/2015/02/22/bye-bye-karuturistan-ethiopia/
Share this:
Related Posts