Rwanda has started an international legal case against the United Kingdom, claiming it is owed £100m under an asylum agreement that was cancelled by Prime Minister Sir Keir Starmer’s government. The dispute is now heading towards international arbitration, with Rwanda accusing the UK of breaking the terms of the deal.

The asylum agreement was signed in 2022, during the previous Conservative government led by Prime Minister Boris Johnson. Under this deal, the UK agreed to send some asylum seekers who had arrived illegally in Britain to Rwanda. In return, the UK also agreed to make several financial payments to Rwanda to support the hosting of migrants and related arrangements.

In its official statement, the Rwandan government said it had decided to take the matter to arbitration after facing what it described as the UK’s “intransigence on these issues”. Rwanda argues that the UK has failed to meet its obligations under the treaty.

A spokesperson for the UK Home Office responded by criticising the previous government’s policy, saying, “The previous government's Rwanda policy wasted vast sums of taxpayer time and money. We will robustly defend our position to protect British taxpayers.”

According to Rwanda, it is making three main claims related to the Migration and Economic Development Partnership. First, Rwanda accuses the UK of breaching the agreement by publicly revealing the financial terms of the deal. Second, it says the UK failed to make payments totalling £100m that were due under the treaty. Third, Rwanda claims the UK has refused to make arrangements to resettle vulnerable refugees from Rwanda.

As part of the agreement, the UK had promised to resettle a small number of vulnerable refugees who were already in Rwanda and had not been sent there from Britain. In 2022, the Home Office said this would likely involve “tens” of cases, including people with complex needs such as serious health problems.

The previous Conservative government spent around £700m on the Rwanda policy, which was designed to deter migrants from crossing the English Channel in small boats. However, only four volunteers were sent to Rwanda while the deal was active. After Labour won the 2024 general election, Sir Keir Starmer described the plan as “dead and buried”.

The agreement also included a break clause allowing either country to end the deal by giving written notice. Of the £700m spent, £290m had already been paid to Rwanda. In December 2024, the Home Office said an additional £100m would have been due under the treaty, with £50m scheduled for the 2025–26 financial year and another £50m for 2026–27. The UK had also agreed to pay £120m after the transfer of 300 people to Rwanda.

Rwanda stated that in November 2024, the UK asked it to forgo the two £50m payments due in April 2025 and April 2026. Rwanda said it was willing to consider this request if the treaty was terminated and new financial terms were negotiated and agreed. However, Rwanda said such discussions never took place and that the money “remain[s] due and payable under the treaty”.

In its statement, Rwanda also claimed that the UK had “made clear that it has no intention of making any further payment” under the treaty, or honouring “its further commitment to make arrangements to resettle in the UK a portion of the most vulnerable refugees hosted in Rwanda”. Rwanda added, “Disappointingly, Rwanda's attempts to move the UK from its entrenched position have been unsuccessful.”

Rwanda further explained that the UK formally notified it of the termination of the treaty after responding to Rwanda’s notice of arbitration in November last year. According to Rwanda, the official termination of the treaty will take effect on 16 March 2026.

Under the treaty, any dispute that could not be resolved directly between the two countries must be referred to the Permanent Court of Arbitration (PCA). The PCA, based in The Hague in the Netherlands, is a forum that resolves international disputes between states. It operates in a similar way to arbitration processes used by companies to avoid long and complex court cases. The PCA has the authority to issue binding and final decisions if the dispute cannot be settled. So far, the PCA has not said when or how Rwanda’s complaint will be handled, and such cases can take years to conclude.

Reacting to the situation, Conservative shadow home secretary Chris Philp criticised the Labour government’s decision to scrap the scheme. He said the legal action was “yet another catastrophic consequence of Labour's decision to scrap the Rwanda scheme before it even started”. He added, “This legal action means the British taxpayer is now facing a huge bill for Labour's weakness and incompetence.” Philp also said Labour was “too weak to see this crucial policy through, and it's the British taxpayer who is left to pay the price”.

Earlier, the UK government had said it was exploring ways to recover some of the money spent on the Rwanda scheme after it was cancelled. However, Rwanda has said it is under “no obligation” to refund any of the funds already paid.

The Home Office has been contacted again for further comment as the dispute continues.