Published by Global Banking and Finance Review
Posted on May 22, 2025
By Muvija M and Michael Holden
LONDON (Reuters) -Britain signed a deal on Thursday to cede sovereignty of the Chagos Islands to Mauritius, after a London judge overturned a last-minute injunction and cleared the way for an agreement the government says is vital to protect the nation's security.
The multibillion-dollar deal will allow Britain to retain control of the strategically important U.S.-UK air base on Diego Garcia, the largest island of the archipelago in the Indian Ocean, under a 99-year lease.
The signing went ahead after a carefully choreographed ceremony was postponed when lawyers representing a British national born in the Chagos Islands were granted an interim injunction at the High Court in the early hours of Thursday.
Judge Martin Chamberlain then lifted that injunction following a hearing, saying Britain's interests would be "substantially prejudiced" if the injunction were to continue.
The government, which has been criticised by opposition parties for pursuing a deal they say is overly costly and would play into the hands of China, has long said the agreement is essential to secure the future of Diego Garcia.
The signing ends months of wrangling over the deal, the details of which were first announced in October, after the then-Mauritian leader Pravind Jugnauth was replaced by Prime Minister Navin Ramgoolam, who raised concerns about it.
It was further delayed after the inauguration of U.S. President Donald Trump in January, with London wanting to give the new administration time to examine the details of the plan. In February, Trump indicated his backing for the deal.
LATEST LEGAL CHALLENGE
The injunction was the latest legal challenge to the deal in the last two decades brought by members of the wider Chagossian diaspora, many of whom ended up in Britain after being forcibly removed from the archipelago more than 50 years ago.
It was granted following action by Bertrice Pompe, a British national who was born in Diego Garcia and has criticised the deal for excluding Chagossians.
James Eadie, the government's lawyer, said the delay was damaging to British interests and "there is jeopardy to our international relations ... (including with) our most important security and intelligence partner, the U.S."
It is one less headache for Starmer, who is under fire from his own governing Labour Party for implementing welfare cuts to try to better balance Britain's books.
But Starmer's political opponents were again critical of the accord, arguing it was both costly and by ceding sovereignty, China could further deepen its ties with Mauritius, benefiting Beijing's influence in the Indian Ocean.
"Labour's Chagos Surrender Deal is bad for our defence and security interests, bad for British taxpayers and bad for British Chagossians," Conservative Party foreign affairs spokeswoman Priti Patel said on X.
The financial component of the deal includes 3 billion pounds to be paid by Britain to Mauritius over the 99-year term of the agreement, with an option for a 50-year extension and Britain maintaining the right of first refusal thereafter.
The base's capabilities are extensive and strategically crucial. Recent operations launched from Diego Garcia include bombing strikes on Houthi targets in Yemen in 2024-2025, humanitarian aid deployments to Gaza and, further back, attacks on Taliban and al-Qaeda targets in Afghanistan in 2001.
(Reporting by Muvija M, Michael Holden and Sam Tobin in London and Mike Stone in Washington; editing by William Schomberg, Elizabeth Piper, Hugh Lawson, William James and Mark Heinrich)
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