Uganda wins London case over terminated railways deal

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Uganda has won a legal dispute at the London Court of International Arbitration against Rift Valley Railways (RVR).

The London-based International Arbitration Tribunal dismissed all claims filed against Uganda by RVR. The company had sought $2.3 billion (about shillings 8.2 trillion) in compensation.

In a ruling dated July 22, 2025, the tribunal dismissed the claims brought by RVR over claims that Uganda breached the Railway concession agreement.

The governments of Uganda and Kenya terminated the agreement in 2017 after RVR, a company that is responsible for managing the railway system, failed to meet its contractual obligations.

In the 25-year concession agreement signed in 2006, Uganda required RVR to improve railway services, particularly in freight transportation, and to pay 11.1% of the gross income as concession fees to the Uganda Railways Corporation (URC).

RVR was also expected to maintain the railway assets, including locomotives and wagons, and provide regular audits of its operations.

The arbitration, initiated on April 2, 2020, was conducted under the Arbitration Rules (2010) before a tribunal seated in London. The hearing was held in March 2024.

Allegations

RVR had sought compensation exceeding shillings 8.7trillion from the governments of Kenya and Uganda, alleging failure to harmonise operational standards across the two countries. The investors also cited adverse impacts caused by the development of the Standard Gauge Railway (SGR), the repudiation of agreements due to SGR plans, and alleged deceit and inducement to continue investing despite a hidden intention to retire the Meter Gauge Railway (MGR).

Uganda was represented by the Attorney General’s Chambers, which is headed by Kiryowa Kiwanuka, London-based law firm Curtis, Mallet- Prevost, Colt & Mosle LLP and K&K Advocates.

After a lengthy hearing and a comprehensive review of the evidence submitted by all parties, the Tribunal rejected RVR’s claims and awarded Uganda and Kenya costs of the suit.

No breach

In its ruling, the Tribunal found that Uganda was not in breach of its harmonisation obligations, as had been alleged. It concluded that the Uganda Concession Agreement was terminated for a multitude of independent reasons arising from RVR’s own shortcomings.

Uganda consistently argued that it had fulfilled its contractual obligations and that RVR’s mismanagement, underperformance, and failure to meet agreed standards led to the termination of the concession.

The court ordered RVR to pay Uganda $3,668,519.25(about shillings 14,1billion) in legal costs and an additional amount of Great Britain Pound of 200,369.11 (about shillings 964 million) in arbitration costs.

Decision welcomed

On July 25, 2025, justice ministry spokesperson Simon Jamba welcomed the ruling, saying it reaffirms Uganda’s position that the termination was lawful. 

“This award underscores Uganda’s firm position that the termination of the Concession was lawful, justified, and necessary to protect a critical national infrastructure asset. Uganda reaffirms its commitment to fair and transparent investment partnerships and to the responsible stewardship of public assets,” Jamba said in a press statement.