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ADDIS ABABA — In a decisive ruling that could reshape Ethiopia’s real estate landscape, the Yeldeta High Court has sided with homebuyers in their dispute against Purpose Black Trading S.C., ordering the termination of contracts and mandating full refunds with interest. The ruling also grants apartment buyers the right to pursue additional costs and damages.
The verdict, announced this week and publicized by Al-Hig Legal Firm, marks a critical turning point in one of the most closely watched property disputes in recent years.
The Case Against Purpose Black
Purpose Black, founded by Fisseha Eshetu, attracted thousands of investors with the promise of an iconic 115-storey “KeGeberew Tower” in central Addis Ababa. Share packages, priced between 1.5 and 3.5 million birr, were marketed as a pathway to acquiring three-bedroom apartments.
However, many buyers later discovered that they had in fact purchased shares in the company, not legally binding real estate contracts. The mismatch between marketing promises and contractual obligations became the foundation of fraud allegations.
Dozens of buyers, represented by Al-Hig Legal Firm and other attorneys, argued that they were misled into investing life savings and selling properties under the belief they were securing future homes.
The Yeldeta High Court’s Ruling
The High Court found in favor of the homebuyers, ruling that:
- All contracts between Purpose Black and apartment buyers be terminated.
- Investors must be refunded their full payments with interest.
- Buyers have the legal right to claim additional costs and damages.
This ruling not only provides relief to individual homebuyers but also sets a legal precedent, affirming consumer protection in an industry long criticized for weak oversight and predatory practices.
Wider Implications
1. Investor Relief
For the estimated 1,700+ shareholders and apartment buyers, the decision offers a legal pathway to recover investments. Many had been left in limbo after the collapse of Purpose Black’s land deal with BGI Ethiopia and the subsequent arrest of company executives in 2024.
2. Corporate Accountability
The ruling strengthens ongoing criminal proceedings against Purpose Black’s leadership, who face fraud and misrepresentation charges at the Federal High Court.
3. Real Estate Reform Momentum
The case arrives as Ethiopia’s parliament recently passed a new real estate law requiring developers to complete at least 80% of construction before transferring homes. Regulators may now face pressure to more aggressively police misleading investment schemes.
Al-Hig’s Statement
In a Facebook post, Mikias Melak of Al-Hig Legal Firm confirmed:
“The Yeldeta High Court has ruled that the contract between the parties be terminated, and that apartment buyers receive full refunds with interest. They also retain the right to claim costs and damages.”
What’s Next?
- Refund Mechanism: It remains unclear how and when refunds will be processed, given Purpose Black’s strained finances and frozen accounts.
- Damages Claims: Buyers may pursue further compensation in follow-up proceedings.
- Industry Oversight: This ruling could embolden more buyers to challenge developers in court, raising standards in Ethiopia’s fast-growing housing sector.
👉 This story is still developing. Addis Insight will continue to monitor how refunds are implemented, how Purpose Black responds, and what precedent this sets for Ethiopia’s real estate future.
