Kenya has successfully defended a multi-billion international arbitration claim of over KSh258 billion (USD 2 billion) that was instituted against the State by KU Railways Holdings Limited and RVR Investments (PTY) Limited (RVR) at the London Court of International Arbitration (the “LCIA”).

According to Shadrack Mose, the Solicitor General of Kenya, the arbitration commenced in 2020 when KU Railways Holdings Ltd instituted arbitral proceedings at the LCIA against the Kenyan government and the Ugandan government for alleged breaches against the Interface Agreement and Railways Concession Agreement relating to the construction and management of the mutual Rift Valley Railways line that was scheduled to run between both countries for freight and passenger transportation.

“The KSh. 258 billion (USD 2 billion) claim has been ENTIRELY DISMISSED with costs awarded in favour of the respondents,” Mose said in a statement.

KU Railways Holdings Limited and RVR Investments (PTY) Limited (RVR) filed claims at the London Court of International Arbitration, stating that the governments of Kenya and Uganda breached their contracts.

Reportedly, the governments of Kenya and Uganda entered into agreements between 2006 and 2011 with several companies for the construction and management of the railroad to transport goods and passengers.

The agreements signed saw the two bodies transfer their railway assets to RVR in return for 11.1 percent of gross revenue during the concession period and were to take effect immediately and go on for 25 years for the goods transportation services and 5 years for the passenger services.

However, the deal failed to sail through after RVR was said to have shut down its offices.