RVR gets more time on Kenyan railway

August 18, 2009

, NAIROBI, Kenya, Aug 18 – The High Court has ruled that Rift Valley Railways (RVR) will manage the country’s rail network on a temporary basis until a case it has filed in court has been heard and determined.

High Court judge Abida Ali-Aroni directed the Attorney General and the management of the Kenya Railways Corporation to respond to the application filed by RVR within seven days.

Justice Aroni has also extended orders issued last week that barred the government and Kenya Railways from terminating the contract signed in January 2006, until the case has been heard and determined.

Last week, the concessionaire moved to court seeking among other things the maintenance of status quo until its grievances are determined by a three-judge bench appointed to hear the case.

RVR rushed to court fearing that the government and Kenya Railways would terminate the contract after the lapse of consent order agreed in court on July 29. Then, all parties agreed that the concession agreement remains in force awaiting judicial review proceedings pending in court.

By consent, the parties agreed that the contract would be extended following extension of the lenders’ cure period invoked by RVR’s financiers and lenders under the concession agreement.

The cure period was to expire on August 7 and as its expiry drew nearer, RVR was apprehensive that the government would terminate the agreement.

In papers filed in court, RVR argues that the termination of the agreement would lead to immeasurable loss and damages. The concessionaire argues that other that some 3,000 employees and their dependents loss; numerous suppliers, contractors and other business partners would also be affected.

Through lawyer Njoroge Regeru, RVR further argued that if not granted the interim orders, the case already filed in court seeking the maintenance of status quo would be rendered useless.

According to Mr Regeru, the entire railway network across the country risked grounding to a halt, occasioning general public and regional economic loss.

When the parties appeared before the Judge on Tuesday, the AG through a state counsel said that a previous lawyer handling the matter had been transferred to another ministry and he was yet to file a response.

On his part, Professor Albert Mumma for Kenya Railways told the court that the company’s Managing Director was out of the country while the Company Secretary was not in Nairobi to enable them prepare an affidavit of defence.

The judge granted both lawyers time to file their response and for Mr Regeru to answer to their defence ahead of the hearing.

According to Prof Mumma, Kenya Railways would be opposing the application for maintenance of status quo. The case will be heard on September 10.

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