Tullow loses $393m tax arbitration case against Ghana – Finance Minister

The Government of Ghana has won an international tax arbitration case brought by Tullow Ghana Limited over the taxation of business interruption insurance proceeds.

An arbitral tribunal constituted under the Rules of Arbitration of the International Chamber of Commerce (ICC) delivered its award on Tuesday, September 29, ruling in favour of Ghana.

The tribunal dismissed all claims brought by Tullow and upheld in full the Ghana Revenue Authority’s (GRA) tax assessment of US$393,091,993.70, according to a statement issued by Finance Minister Dr Cassiel Ato Forson on Wednesday, September 30.

The tribunal also found that the tax assessment did not breach the Petroleum Agreements, the penalty was properly applied and the assessment was not time-barred.

It further ruled that the GRA’s enforcement action was lawful.

The Finance Minister commended the Office of the Attorney-General, the GRA and Ghana’s external legal counsel, Foley Hoag LLP, for their work in defending the interests of the Republic.

He said the outcome supported the government’s position that all companies operating in Ghana, regardless of their size, are subject to the country’s laws.

Dr Ato Forson, however, said the government had been engaging Tullow before the tribunal’s decision to find an amicable resolution to outstanding tax matters.

Those discussions, he said, would continue to cover both the matter determined by the tribunal and a separate proceeding concerning the disallowance of loan interest.

“Government intends to ensure that the award is implemented in a way that secures the revenues due to the Ghanaian people while preserving Tullow’s ability to continue operating and investing in Ghana as a GOING CONCERN,” he said.

The government said Tullow remains a key partner to Ghana and the country’s largest petroleum producer, with its operations in the Jubilee and TEN fields supporting energy security, domestic gas supply and thousands of livelihoods.