Rwanda Seeks £100m from UK Over Cancelled Asylum Deal

Rwanda has launched an international arbitration case against the UK, claiming £100 million in unpaid funds under a controversial asylum agreement scrapped by Prime Minister Sir Keir Starmer.

The dispute centers on a deal signed in 2022 under the previous Conservative government, which aimed to send some asylum seekers arriving illegally in the UK to Rwanda. As part of the agreement, the UK had committed to making payments to Rwanda for hosting asylum seekers and resettling vulnerable refugees already in Rwanda.

Rwanda Takes Legal Action

In a statement, the Rwandan government said it had turned to arbitration after what it described as the UK’s “intransigence” in resolving financial and operational issues under the deal. Rwanda is making three key claims:

1. Public disclosure of financial terms of the agreement.
2. Failure to pay £100 million owed under the treaty.
3. Refusal to arrange the resettlement of vulnerable refugees from Rwanda to the UK.

The UK’s Response

A Home Office spokesperson defended the government’s position:

“The previous government’s Rwanda policy wasted vast sums of taxpayer time and money. We will robustly defend our position to protect British taxpayers.”

Conservative figures have also criticised Labour’s decision to cancel the deal. Shadow Home Secretary Chris Philp called the arbitration a “catastrophic consequence” of Labour’s actions, warning that taxpayers could face a substantial financial burden.

Background: The Rwanda Asylum Deal

The Migration and Economic Development Partnership was designed to deter irregular migration across the English Channel. Key points included:

• Only four volunteers were sent to Rwanda under the deal.
• The UK government had already spent around £700 million on the scheme, including £290 million in payments to Rwanda.
• A further £100 million would have been due over the 2025-26 and 2026-27 financial years, with £120 million payable upon transferring 300 asylum seekers.
• The agreement included a break clause, allowing either country to terminate the treaty with written notice.

After Labour’s victory in the 2024 general election, Prime Minister Sir Keir Starmer described the plan as “dead and buried”.

Arbitration at the Permanent Court of Arbitration

Under the treaty, unresolved disputes are to be referred to the Permanent Court of Arbitration (PCA) in The Hague, Netherlands. The PCA functions similarly to commercial arbitration, offering a binding resolution to international disputes without prolonged court battles.

• Rwanda formally notified the UK of its arbitration in November 2025.
• The UK subsequently informed Rwanda of the treaty’s termination, set to take effect on 16 March 2026.
• The PCA has yet to announce a timetable for handling the case, which could take years to resolve.

Rwanda has stated it is under no obligation to refund any money, while the UK has indicated it is reviewing whether any payments can be recovered.

Key Takeaway:
The dispute highlights the ongoing fallout from the cancelled Rwanda asylum scheme, with potential financial and diplomatic consequences for the UK as the case moves to international arbitration.