Rwanda has launched international legal action against the UK, claiming it is owed £100 million in unpaid funds after Prime Minister Sir Keir Starmer cancelled the controversial asylum relocation agreement.
The Rwandan government has confirmed it has filed an arbitration case against the UK, accusing Britain of breaching the Migration and Economic Development Partnership signed in 2022. The deal, agreed under the former Conservative government, would have seen some asylum seekers who arrived illegally in the UK sent to Rwanda in exchange for substantial financial support.
Rwanda says the UK has failed to honour payments due under the treaty and has refused to meet further obligations, including the resettlement in Britain of a small number of vulnerable refugees currently living in Rwanda.
Cancelled Policy, Unpaid Commitments
Sir Keir Starmer’s Labour government formally abandoned the Rwanda scheme shortly after winning the 2024 general election, declaring the policy “dead and buried” and criticising it as costly and ineffective.
The previous government had already spent around £700m on the programme, including £290m paid directly to Rwanda. The treaty also provided for further payments, including £100m split across the 2025–26 and 2026–27 financial years, and an additional £120m linked to the transfer of 300 people.
In December 2024, the Home Office confirmed that a further £100m would have fallen due under the agreement, even though no enforced removals had taken place. Only four voluntary migrants were ever relocated to Rwanda before the scheme was halted.
Rwanda Turns to International Arbitration
Rwanda says it agreed in principle to discuss revised financial terms when the UK asked in late 2024 to defer two £50m payments, but claims negotiations never took place and the money remains legally owed.
In its statement, the Rwandan government said the UK had shown “intransigence” and made clear it had “no intention” of making further payments or fulfilling its commitment to resettle a number of vulnerable refugees from Rwanda to the UK.
Under the treaty, unresolved disputes must be referred to the Permanent Court of Arbitration in The Hague. Rwanda has now triggered that process, seeking a binding ruling. The case could take years to conclude.
UK Response and Political Fallout
The Home Office said it would “robustly defend” the case, insisting the Rwanda scheme wasted large sums of public money and time. Ministers have also indicated they are examining whether any funds can be recovered from Rwanda, although Kigali says it is under no obligation to refund payments already received.
The formal termination of the treaty is due to take effect in March 2026 under the agreement’s break clause.
Conservative shadow home secretary Chris Philp accused the Labour government of exposing taxpayers to a major financial liability by scrapping the scheme, calling the arbitration claim “another catastrophic consequence” of ending the policy.
The dispute comes as the UK government shifts its focus towards processing asylum claims more quickly and expanding returns agreements with safe third countries, rather than using offshore relocation. Small boat crossings across the English Channel remain a major political issue, with ministers under pressure to reduce numbers while complying with international law.