An Egyptian businessman is threatening to file an international arbitration case against the Ethiopian government for alleged damages incurred as a result of the current conflict in Tigray, according to a statement (pdf) he released yesterday. Alaa El Sakty tells us that he is seeking USD 40 mn in damages after two of his companies Trafo Tech (pdf) and Cynosure (pdf) suffered losses due to the fighting, and says he will take the case to the World Bank’s International Center for Settlement of Investment Disputes (ICSID) if Addis Ababa doesn’t pay up.

Caught in the crossfire: Trafo and Cynosure are both based in the Egyptian industrial zone in the Tigrayan capital Mekelle, which has been hit hard by almost 10 months of fighting between local rebels and government forces. The companies say they have suffered huge losses after being forced to shutter operations months ago, and are demanding that the government pay compensation for the loss of revenues.

The legal case: The companies’ legal representative, Ezzat Youssef, claims that by failing to protect the factories, Ethiopia is in breach of a 2006 investment treaty signed between the two countries that guarantees protection to investors. Under the agreement, Egypt and Ethiopia agreed to provide “adequate protection and security” to investors from each others’ countries.

No dice? Sakty, who also heads the industrial zone and serves as the vice chair of the Investors’ Union, said that he’s hoping to settle the matter amicably with the government but will resort to the ICSID if they can’t come to an agreement. Youssef has given Ethiopia six months to resolve the dispute before filing a case with the Washington-based arbitration center.