Uganda has secured a major legal victory in a high-profile international arbitration case involving Rift Valley Railways (RVR), after a London-based tribunal dismissed all claims brought against the Ugandan government.
The case, which sought over $2.3 billion (over Shs7.1 trillion) in compensation from both Uganda and Kenya, was resolved in Uganda’s favor in a final award issued on 22nd July 2025.
The dispute arose from a long-standing concession agreement involving RVR Investments (Pty) Ltd and KU Railways Holdings Ltd (KURH), who had operated rail services across Kenya and Uganda.
The investors accused the two governments of breaching agreements related to the operation of the Meter Gauge Railway (MGR).
They claimed that Uganda and Kenya failed to harmonize railway operational standards, and that Uganda’s strategic shift toward the Standard Gauge Railway (SGR) project amounted to a repudiation of their concession agreement.
The arbitration, which was initiated on 2nd April 2020, was conducted under the UNCITRAL Arbitration Rules of 2010 before a three-member tribunal based in London.
A comprehensive hearing was held in March 2024, during which the tribunal reviewed a wide array of evidence submitted by both parties.
In their filing, RVR alleged that Uganda’s actions particularly the continued investment in the SGR and the alleged hidden intention to phase out the MGR resulted in adverse financial impacts and breaches of contract.
They sought over $2.3 billion in damages, arguing that they had been misled and induced to invest in the project under false pretenses.
However, after a thorough review of the case, the tribunal rejected all of RVR’s claims. The panel found no merit in the allegations and concluded that Uganda had not violated any harmonization obligations as claimed.
The ruling also affirmed that the termination of Uganda’s concession agreement with RVR had been due to multiple independent factors, most of which were related to RVR’s own failures.
Uganda, throughout the proceedings, maintained that it was not in breach of any contractual terms. The government argued that RVR had consistently underperformed, mismanaged the railway operations, and failed to meet its obligations under the agreement.
This included failure to meet freight volume targets and maintain the railway infrastructure as required.
In addition to dismissing the claims, the tribunal further ordered RVR to compensate Uganda in legal and arbitration costs. Specifically, RVR was directed to pay Uganda $3,668,519.25 in legal fees and an additional GBP 200,369.11 in arbitration costs.
The Ministry of Justice and Constitutional Affairs welcomed the ruling, describing it as a reaffirmation of Uganda’s commitment to fair and transparent handling of public infrastructure partnerships.
The government noted that the outcome was a critical step in protecting a vital national asset and in asserting its sovereign right to safeguard long-term infrastructure plans like the SGR.
Officials emphasized that the decision to terminate RVR’s concession had been lawful and necessary to ensure efficient and responsible stewardship of public assets.
The tribunal’s judgment, according to the Ministry, underlines the importance of performance-based partnerships and justifies Uganda’s decision to re-evaluate underperforming concessions in the rail sector.
The Ugandan government was represented in the arbitration by the Attorney General’s Chambers, alongside international legal teams from Curtis, Mallet-Prevost, Colt & Mosle LLP and local firm K&K Advocates.
The ruling marks the conclusion of a complex legal battle that had spanned over five years. It not only clears Uganda of financial liability but also sets a strong precedent for how future public-private infrastructure partnerships in the region can be managed with transparency and accountability.
For Uganda, the arbitration victory comes at a time when the government is intensifying efforts to revamp its transport and logistics infrastructure.
With the SGR project still in the pipeline, this decision is expected to bolster investor confidence and reinforce Uganda’s position in managing strategic public assets with integrity.
