Ghana has emerged victorious in a major international tax dispute with Tullow Ghana Limited, with an arbitral tribunal constituted under the International Chamber of Commerce (ICC) Rules of Arbitration dismissing the oil company's claims. The dispute centred on the taxation of proceeds Tullow received from business interruption insurance.
The tribunal upheld a tax assessment of more than $393 million by the Ghana Revenue Authority (GRA). Finance Minister Dr Cassiel Ato Forson stated that the tribunal rejected all the claims brought by Tullow, finding that the GRA's assessment did not violate the applicable Petroleum Agreements.
The tribunal also upheld the penalty imposed on Tullow, ruled that the assessment was not time-barred, and found that the GRA acted lawfully in enforcing the assessment. Dr Forson said the outcome reinforces the government's position that companies operating in Ghana must comply with the country's laws, regardless of their size or influence.
The Minister added that the ruling "vindicates the position Ghana has maintained throughout: that every company operating in this country, regardless of its size, is subject to the laws of Ghana." Dr Forson commended the Office of the Attorney-General, the GRA, and Ghana's external legal counsel, Foley Hoag LLP, for their roles in representing the interests of the Republic throughout the arbitration.
Dr Forson stated that the government would take steps to implement the tribunal's award in accordance with Ghanaian law. At the same time, he said the government would ensure that Tullow retains the capacity to continue its operations and investments in Ghana's Jubilee and TEN oil fields.
The ruling comes against the backdrop of broader tax disputes between Tullow Ghana and the GRA. Tullow has previously disclosed that its business-interruption-insurance tax assessment arose from proceeds received during the 2016–2019 financial years and that it had challenged the assessment through ICC arbitration.
The Finance Minister's statement concluded with an assurance that the government would work to maintain a positive relationship with Tullow, allowing the company to continue operating in Ghana's oil sector. The ICC arbitration ruling marks a significant victory for Ghana in its efforts to enforce tax compliance among international oil companies operating in the country.
Key points
- The ICC tribunal upheld a $393m tax assessment by the Ghana Revenue Authority against Tullow Ghana Limited.
- The tribunal found that the GRA's assessment did not violate the applicable Petroleum Agreements and acted lawfully in enforcing the assessment.
- The ruling reinforces the government's position that companies operating in Ghana must comply with the country's laws, regardless of their size or influence.
