An International Chamber of Commerce arbitral tribunal has ruled in favor of Ghana, upholding a $393.09 million tax assessment against Tullow Ghana Limited. The tribunal dismissed all claims brought by Tullow over tax arising from business interruption insurance proceeds. The ruling stated that the assessment did not breach the Petroleum Agreements between Ghana and Tullow.
The tribunal's decision also confirmed that the penalty imposed on Tullow was properly applied, the assessment was not time-barred, and the Ghana Revenue Authority's enforcement action was lawful. Dr. Cassiel Ato Forson, Minister of Finance, expressed satisfaction with the outcome, acknowledging the work of the Office of the Attorney-General, the GRA, and Ghana's external legal counsel, Foley Hoag LLP.
Dr. Forson emphasized that the outcome vindicated Ghana's position that every company operating in the country, regardless of its size, was subject to the laws of Ghana. He noted that the award came at a critical time when Ghana and the Jubilee partners were working to maximise the prospects of the Jubilee and Tweneboa, Enyenra and Ntomme (TEN) fields.
The Minister described Tullow as a vital partner to Ghana and the country's largest petroleum producer, noting that its operations in the Jubilee and TEN fields supported energy security, domestic gas supply, and thousands of Ghanaian livelihoods. He expressed the government's desire to maintain a positive relationship with Tullow, while ensuring that the award was implemented in accordance with Ghanaian law.
Dr. Forson revealed that prior to the tribunal's decision, the Government had been in discussions with Tullow to resolve outstanding tax matters amicably. These discussions would continue to cover both the matter determined by the tribunal and separate proceedings concerning the disallowance of loan interest.
The Minister assured that the Government would work closely with Tullow to give effect to the award, while having due regard to the continuity of operations in the Jubilee and TEN fields and Tullow's capacity to sustain the investments required in the fields. He explained that Ghana's laws empowered the GRA to determine the time and manner in which assessed tax liabilities were to be met.
Dr. Forson concluded that the Government would ensure that the award was implemented in a manner that secured revenues due to the Ghanaian people while preserving Tullow's ability to continue operating and investing in Ghana as a going concern. The implementation of the award would be done in accordance with Ghanaian law, ensuring a smooth continuation of Tullow's operations in the country.
Key points
- The International Chamber of Commerce tribunal upheld Ghana's $393.09 million tax assessment against Tullow Ghana Limited.
- The tribunal's decision confirmed that the penalty imposed on Tullow was properly applied and the assessment was not time-barred.
- The Government will implement the award in a manner that secures revenues due to the Ghanaian people while preserving Tullow's ability to continue operating in Ghana.
