Kenya has won a major legal battle after a London court dismissed a Sh258.5 billion claim over a failed railway project.
The London Court of International Arbitration (LCIA) ruled in favour of Kenya in a case filed by two foreign companies over the collapsed Rift Valley Railways (RVR) concession. The firms, KU Railways Holdings Limited (KURH) and RVR Investments (PTY) Limited (RVRI), had accused both the Kenyan and Ugandan governments of breaching agreements related to the construction and management of a railway line running from Mombasa to Kasese in western Uganda.
The railway was meant to pass through key towns including Nairobi, Eldoret, and Kampala, with the goal of improving regional freight and passenger transport. The two companies filed the $2 billion claim in 2020, arguing that both countries had failed to honour their part of the deal. However, the LCIA found the accusations unsubstantiated and dismissed the claim in full.
KURH, previously known as Sheltam Rail Company, is an Egyptian-owned entity controlled by Qalaa Holdings, a company listed on the Egyptian Stock Exchange. It was the lead investor in the RVR consortium, which had been given a 25-year concession for freight operations and a five-year passenger service contract between 2006 and 2011.
Solicitor General Shadrack J. Mose confirmed Kenya’s victory, stating that the tribunal not only dismissed the claims but also awarded legal costs to Kenya. Mose noted that this outcome has saved Kenyan taxpayers from a massive financial loss.
He emphasized that Kenya had fully met its obligations under the concession agreement, including asset transfers and support for operations. In contrast, the companies failed to raise adequate funding, missed freight targets, and defaulted on key financial obligations.
The concession was officially terminated in 2017 due to repeated underperformance by the companies. Under the agreement, Kenya Railways Corporation (KRC) and Uganda Railways Corporation (URC) were to receive 11.1% of the railway’s gross revenue. However, those targets were not met.
Kenya’s legal defence team included senior legal experts such as Prof. Githu Muigai, Prof. Albert Mumma, and UK-based King’s Counsel Michael Sullivan.
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