- London court dismisses Ksh 258.5 billion claim against Kenya
- Rift Valley Railways firms accused the government of illegal termination
- Kenya Railways ended the deal in 2017 over poor performance
- The court found termination lawful and ordered the claimants to pay costs
- Kenya’s legal team celebrates major international victory
Kenya has emerged victorious in a high-profile international case in which it was accused of wrongfully cancelling a major railway deal. The London Court of International Arbitration (LCIA) rejected a Ksh. 258.5 billion ($2 billion) compensation claim brought against the government.
The claim was filed by two companies, Rift Valley Railways Investments (RVRI) Ltd and KU Railways Holdings Ltd (formerly known as Sheltem Rail Company). They had been managing the old metre-gauge railway running from Mombasa to Kampala since 2006 under a 25-year concession.
In 2017, Kenya Railways Corporation (KRC) pulled the plug on the deal. According to KRC, the consortium failed to meet key targets, including cargo movement, regular asset maintenance, and timely payment of agreed fees.
That decision followed a Kenyan High Court ruling, which had already ordered the termination due to repeated non-performance.
Unhappy with the cancellation, the two firms dragged both Kenya and Uganda into arbitration. They argued that the contract had been unfairly ended and demanded billions in damages, saying their business suffered massive losses.
However, Kenya’s defence team strongly disputed the claims, insisting that all actions taken were lawful and fully within the contract terms.
The London-based court agreed with Kenya and dismissed the full claim. In addition, the court ordered the companies to bear the legal costs.
Solicitor General Shadrack Mose, who led Kenya’s 16-member legal team, described the win as a big moment for the country.
“The Republic of Kenya has successfully defended a $2 billion international arbitration claim… instituted against the State at the LCIA,” he stated.
This decision sends a strong message to companies in future public-private partnerships. Kenya’s win not only saved billions but also strengthened its reputation in global commercial arbitration.
The case stands as one of the biggest legal wins for the government in recent years.
