Incomplete response received from application when non-ascii character in html

I have an Ubuntu 18.04 server with Nginx and Phusion Passenger (non-Rails app) and it is working for websites with ASCII characters in HTML only.

But when I put a non-ascii character to the index.erb like á for example, I get error:
Incomplete response received from application

My locale is:

LANG=C.UTF-8
LANGUAGE=C.UTF-8
LC_CTYPE="C.UTF-8"
LC_NUMERIC="C.UTF-8"
LC_TIME="C.UTF-8"
LC_COLLATE="C.UTF-8"
LC_MONETARY="C.UTF-8"
LC_MESSAGES="C.UTF-8"
LC_PAPER="C.UTF-8"
LC_NAME="C.UTF-8"
LC_ADDRESS="C.UTF-8"
LC_TELEPHONE="C.UTF-8"
LC_MEASUREMENT="C.UTF-8"
LC_IDENTIFICATION="C.UTF-8"
LC_ALL=C.UTF-8

All files are in UTF-8 as well, of course.

Any ideas? I'm out of mine already..

Thanks