NAIROBI, Kenya – Kenya has scored a major legal victory after the London Court of International Arbitration (LCIA) dismissed a $2 billion (Sh258 billion) claim filed against it by former Rift Valley Railways (RVR) investors.
In a judgment delivered this week, the LCIA ruled in favour of the Kenyan government, rejecting the claim brought by KU Railways Holdings Ltd (formerly Sheltam Rail Company PTY) and RVR Investments (PTY) Ltd.
The two firms had sued the governments of Kenya and Uganda in 2020, accusing them of breaching contractual obligations tied to the controversial RVR concession—an ambitious but ultimately failed public-private partnership meant to revive railway transport in both countries.
The investors had alleged violations of the Interface Agreement and Railways Concession Agreement, claiming that government actions led to the collapse of the concession and significant financial losses. They sought compensation exceeding $2 billion.
But in a resounding legal win for Kenya, the arbitration tribunal dismissed all claims and awarded costs in favour of the state.
“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,” said Solicitor General Shadrack Mose in a statement on Friday.
Legal Team Commended
The case was defended by a high-powered team from the Office of the Attorney General, Kenya Railways Corporation, and external counsel led by Senior Counsel Prof Githu Muigai.
Kenya Railways legal officers Stanley Gitari and Christine Macharia were instrumental in defending the parastatal’s interests.
A Precedent-Setting Case
The ruling was hailed as a significant win for Kenya at a time when public-private partnerships are under increased scrutiny due to their high risk and potential burden on public finances.
The RVR concession had been seen as a transformative infrastructure project when it launched, with ambitions to overhaul Kenya and Uganda’s aging rail network.
However, it was plagued by underinvestment, inefficiencies, and management wrangles before being terminated.
The investors’ claim—one of the largest against the Kenyan government in recent memory—highlighted the complex risks involved when governments and private entities collaborate on national infrastructure.
“The decision reaffirms Kenya’s resolve to uphold lawful governance, protect public resources, and maintain international credibility,” said Mose.
