Permanent Court of Arbitration Rejects Rwanda's $134 Million Claim Against the UK Over Scrapped Migrant Resettlement Deal
The Permanent Court of Arbitration (PCA), based in The Hague, has rejected all four of Rwanda's compensation claims against the United Kingdom arising from the cancellation of the controversial Rwanda migrant resettlement deal. The ruling, dated 15 May 2026 but formally announced on 2 June, dismisses two Rwandan claims of $67 million each — a combined $134 million — linked to two £50-million payments that were due in April 2025 and April 2026 to cover migration processing costs. The PCA also rejected two further Rwandan claims alleging UK breaches of the pact. The original deal was struck in 2022 under former Prime Minister Boris Johnson and involved sending asylum seekers arriving in the UK by boat or as stowaways to Rwanda for claim processing. Prime Minister Keir Starmer scrapped the deal immediately on taking office in 2024; his then-Home Secretary Yvette Cooper described it as the 'most shocking waste of taxpayer money I have ever seen.' In its 76-page ruling, the PCA found that written diplomatic exchanges after the deal's cancellation amounted to a binding agreement that the UK would not make the two outstanding payments. The UK government confirmed it 'robustly defended its position' and that the tribunal ruled in its favour on all grounds. Rwanda's government spokesperson said Rwanda 'respects the tribunal's award', while noting a dissenting opinion by one arbitrator that highlighted the case's legal complexity. The UK Supreme Court had previously ruled the policy unlawful on the basis that Rwanda was not a safe third country.
Why this matters
This is a significant state-to-state arbitration win for the UK, resolving a $134 million financial exposure arising from a politically contentious executive decision to cancel an intergovernmental treaty arrangement. The PCA's reasoning — that post-cancellation diplomatic exchanges constituted a binding agreement to waive the outstanding payments — raises important questions about how informal diplomatic communications can crystallise legally binding obligations under international law. For commercial lawyers, the case is a useful illustration of treaty-based arbitration at the PCA and how sovereign parties manage compensation claims arising from policy reversals. The dissenting opinion signals the legal complexity was genuine, and the case will be studied as a precedent for how bilateral agreements can be varied by conduct and correspondence.
On the Ground
A trainee supporting the UK legal team on this matter would have assisted with disclosure review and categorisation of the diplomatic correspondence at the heart of the case, prepared chronology bundles tracking the sequence of communications after the deal's cancellation, and assisted with court filing and service of procedural documents with the PCA.
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