Kenya has successfully defended itself and Uganda against a staggering $2.005 billion lawsuit initiated by the former concessionaire of the Kenya-Uganda railway line, Rift Valley Railways Investments (RVRI). The dispute, which centered on the termination of a 25-year concession agreement signed in 2006, has finally been resolved in favor of the two East African nations, bringing closure to a long-running infrastructure saga.
The lawsuit was filed by KU Railway Holdings Ltd and RVR Investments Ltd, which accused both Kenya and Uganda of breaching the terms of the concession agreement. However, the governments had a strong case, citing RVR’s repeated and profound failures to meet its contractual obligations. The termination in 2017 was a direct result of RVR’s inability to meet critical investment, maintenance, and operational benchmarks outlined in the contract.
According to a press statement from the Attorney General’s office, the London Court of International Arbitration (LCIA) tribunal dismissed the claims, siding with the two East African states and upholding their right to terminate the contract due to RVR’s non-performance. This outcome, the statement noted, "upholds the integrity of Kenya's legal and commercial commitments" and, most importantly, "protects the Kenyan taxpayer from what would have been a staggering financial liability."
The governments’ arguments were compelling. They highlighted RVR’s failure to maintain assets, meet freight targets, and pay concession fees, which were key requirements of the agreement. Furthermore, the governments pointed to RVR’s inability to present and execute a credible investment program. This program was meant to include the rehabilitation of railway tracks, the modernization of locomotives, and the restoration of the wagon fleet. The proposed investments were crucial for generating substantial economic and social benefits for the region, supporting broader efforts to drive growth and reduce poverty.
