Thanks guys! My putty terminal was using ISO-8859 encoding by default and my java client was generating ASCII files
Changing putty to UTF8, I was able to get it working by creating the file directly on the filesystem :/# file .dovecot.sieve .dovecot.sieve: UTF-8 Unicode text and through telnet :/# file .dovecot.sieve .dovecot.sieve: UTF-8 Unicode text, with CRLF line terminators