Kenya and Uganda have secured a significant legal victory at the London Court of International Arbitration (LCIA), which dismissed a $2.005 billion compensation claim filed by Rift Valley Railways Investments (RVRI) and KU Railways Holdings (KURH) over the termination of a railway concession agreement.
The dispute, according to Business Insider Africa’s report, arose from the 2017 cancellation of a 25-year concession granted in 2006 to the RVR consortium, which authorised it to operate and manage the 2,350-kilometre rail line linking Kenya and Uganda.
The two East African governments cited consistent failures by RVR to meet contractual obligations—including investment commitments, asset maintenance, and freight delivery targets—as justification for ending the agreement.
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In response to the claims, Kenyan authorities argued that RVR’s operational lapses undermined the partnership’s long-term viability.
These included failure to rehabilitate rail tracks, upgrade locomotives, and restore waggons to optimal performance standards—key deliverables outlined in the original agreement.
“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,” Kenya’s Attorney General’s Office said in a statement on Friday.
The office further described the ruling as a reaffirmation of the government’s resolve to safeguard public resources and uphold international legal credibility.
The tribunal’s decision brings closure to a long-standing case that had come to symbolize the challenges facing large-scale public-private partnerships (PPPs) in East Africa’s infrastructure sector.
With the LCIA siding with Nairobi and Kampala, both governments are expected to continue exploring more effective models for regional transport development.
The ruling also bolsters Kenya and Uganda’s legal standing as they engage new investors to revamp their transport systems—essential to boosting trade, reducing logistics costs, and enhancing regional connectivity.
Image Credit: East News Uganda
