An international arbitration panel has ruled that the United Kingdom does not have to pay Rwanda millions of dollars in disputed costs arising from the collapse of a controversial asylum transfer scheme.

The decision by the Permanent Court of Arbitration in The Hague closes a high-profile financial and diplomatic dispute triggered by the UK’s attempt to outsource part of its asylum system to the East African nation. Under the agreement, people arriving irregularly in Britain were to be flown to Rwanda to have their asylum claims processed there, with Kigali receiving substantial funding in return.

The scheme, championed by the former Conservative government as a deterrent to small-boat crossings in the Channel, was beset by legal challenges, human rights concerns and political backlash. Britain’s Supreme Court ultimately found the plan unlawful, concluding that Rwanda could not be treated as a safe third country for asylum seekers.

After taking office, Prime Minister Keir Starmer formally scrapped the policy, branding it unworkable and incompatible with the UK’s international obligations. His home secretary, Yvette Cooper, condemned the project as an extraordinary misuse of public funds, pointing to hundreds of millions already committed without a single deportation flight taking off.

Rwanda argued that, despite the scheme’s collapse, it was still entitled to more than 130 million dollars in outstanding payments for infrastructure, staffing and other preparations it said were made in good faith. Kigali claimed the UK had breached the agreement and should honour the remaining financial commitments.

The arbitration tribunal rejected those claims, finding that London was not liable for two additional years of costs and dismissing two further Rwandan complaints linked to alleged UK violations of the pact. The detailed reasoning has not been fully disclosed, but the ruling effectively shields British taxpayers from a substantial extra bill.

Rwandan government spokesperson Yolande Makolo said Kigali accepted the outcome and regarded the dispute as closed, while highlighting a dissenting opinion from one arbitrator as evidence of the case’s legal complexity. She stressed that Rwanda would continue to engage with international partners on migration and development under what it views as fair and cooperative arrangements.

The UK government welcomed the ruling and said it is now concentrating on a new border and asylum strategy, focused on reducing irregular arrivals, tightening enforcement and accelerating the removal of people who have no legal right to remain in the country.