Court
Kenya has secured a major legal victory after the London Court of International Arbitration (LCIA) dismissed a multi-billion-dollar claim brought against the country by Rift Valley Railways (RVR) investors.
The claim, exceeding $2 billion (over Sh258 billion), was lodged in 2020 by KU Railways Holdings Ltd (formerly Sheltam Rail Company PTY) and RVR Investments (PTY) Ltd.
The investors accused the Kenyan and Ugandan governments of breaching the Interface Agreement and the Railways Concession Agreement, which governed the operations, construction, and management of the Rift Valley Railways line.
In a statement on Friday, Solicitor General Shadrack Mose confirmed that the LCIA had fully dismissed the claim and awarded costs in favour of Kenya.
“This outcome not only upholds the integrity of Kenya's legal and commercial commitments but also protects the Kenyan taxpayer from what would have been a staggering financial liability,” Mose said.
The arbitration stemmed from the collapse of the Rift Valley Railways concession, a public-private partnership that had sought to revive rail transport in Kenya and Uganda through private sector investment.
The claimants argued that the two governments had breached key obligations under the agreement, ultimately leading to the project's termination.
However, the LCIA ruled in favour of Kenya, fully rejecting the claims of contractual breach.
The Kenyan legal defence was led by Mose and a dedicated team from the State Law Office.
The Kenya Railways Corporation legal unit also played a central role, with Stanley Gitari and Christine Macharia representing the parastatal.
The government’s external counsel was led by Senior Counsel Prof Githu Muigai.
The outcome is seen as a critical win for the government in an era of increased scrutiny over public-private partnerships and the financial exposure they bring to taxpayers.
The defunct RVR line, which once operated freight and passenger services across Kenya and Uganda, had faced years of operational and financial difficulties before its eventual collapse.
The failed concession became a subject of regional and international legal review, culminating in the high-stakes LCIA case.
The court's decision sets a significant precedent for the handling of future infrastructure-related disputes involving sovereign states and private investors.
The government welcomed the ruling as a signal of confidence in Kenya’s legal institutions and reiterated its commitment to transparency and due process in managing public assets.
“This win reaffirms Kenya's resolve to uphold lawful governance, protect public resources, and maintain international credibility,” Mose said.
