In London, Attorney General Justin Muturi is leading Kenya’s defense against a hefty $2 billion (Sh.289 billion) lawsuit.
The lawsuit alleges a breach of contract concerning the construction and management of a railway line connecting Kenya and Uganda.
Originally, the case was brought forth by KU Railway Holdings Ltd (KURH, previously known as Sheltam Rail Company (PTY)) and Rift Valley Railways (RVR) Investments (RVRI) Ltd.
They initiated arbitral proceedings at the London Court of Arbitration against both the Kenyan and Ugandan governments.
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Documents reveal that between 2006 and 2011, Kenya and Uganda engaged in agreements with various companies to construct and manage a railway line spanning 1,660 kilometers, linking Mombasa, Nairobi, Nakuru, Eldoret, Malaba, Jinja, Kampala, and Kasese in Uganda.
The Kenya Railway Corporation (KRC) and Uganda Railway Corporation (URC) signed concession documents.
These agreements involved transferring railway assets to RVR in exchange for an 11.1% share of gross revenue over 25 years for freight services and 5 years for passenger services.
However, problems arose when RVR struggled to secure financing from lenders, leading to breaches of the concession agreements.
Negotiations ensued between Kenya and RVR from 2008 to 2011 to restructure the agreement, but RVR continued to fall short of its obligations.
Kenya attempted to terminate the concession in 2017 due to unpaid fees, insufficient investment, and failure to meet freight volume targets.
Despite legal interventions, including a temporary injunction, RVR ultimately consented to the termination.
The lawsuit alleges that Kenya and Uganda are jointly responsible for compensating KURH and RVR for breaches of the concession agreements, totaling $2,005,900,000.
Legal proceedings commenced on March 4th in London and are scheduled to continue until March 15th.
AG Muturi heads the legal team, which includes legal experts such as Kings Counsel Michael Sullivan, Githu Muigai, and Albert Mumma.
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