Rwanda is suing the UK for failing to formally terminate the controversial agreement.
It emerged on Tuesday that the east African country is seeking £50m in compensation, The Telegraph reported.
The Rwanda scheme would have involved some asylum seekers being sent to Rwanda to have their asylum claims processed there.
Following news of the lawsuit, Downing Street defended its decision to end the scheme, saying it had been a "complete disaster".
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The prime minister's official spokesman said: "The Rwanda scheme was a complete disaster. It wasted £700 million of taxpayer cash to return just four volunteers.
"The truth is that 84,000 people crossed the Channel from the day the Rwanda deal was signed to the day it was scrapped. It was never a deterrent.
"We will robustly defend our position to protect British taxpayers, and we're getting on with the job of focusing on effective ways to stamp out illegal migration, not costly gimmicks.
"And as I've said, we've removed under this Government almost 50,000 people who were here illegally.
"And more broadly, the Home Secretary set out the most sweeping reforms to tackling illegal migration in modern times to remove the incentives which draw people to the UK illegally, increase removals of those with no right to be on British soil."
Rwanda has launched arbitral proceedings against the UK through The Hague-based Permanent Court of Arbitration.
Rwanda began the inter-state arbitration proceedings under the asylum partnership agreement in November, according to the Netherlands-based court's website, which lists the case status as pending.
(c) Sky News 2026: Rwanda suing UK over scrapped deportation scheme
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