Ghana Wins $393 Million Tax Dispute Against Tullow Ghana in International Arbitration

Ghana has won a major tax arbitration case against Tullow Ghana Limited, with an international tribunal upholding a Ghana Revenue Authority (GRA) tax assessment of US$393,091,993.70.

In a press release issued by the Ministry of Finance on Tuesday, Finance Minister Dr Cassiel Ato Forson announced that an arbitral tribunal constituted under the Rules of Arbitration of the International Chamber of Commerce (ICC) on Monday delivered its award in proceedings brought against the Republic of Ghana by Tullow Ghana Limited over the taxation of business interruption insurance proceeds.

According to the statement, the Tribunal ruled in favour of Ghana, dismissing all claims brought by Tullow and upholding in full the GRA’s tax assessment.

The Tribunal found that the assessment did not breach the Petroleum Agreements, the penalty was properly applied, the assessment was not time-barred, and the GRA’s enforcement action was lawful.

Dr Forson acknowledged the work of the Office of the Attorney-General, the Ghana Revenue Authority and Ghana’s external legal counsel, Foley Hoag LLP, in defending the interests of the Republic.

“This outcome 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,” the statement said.

The government noted that the award has come at a critical time when Ghana and the Jubilee partners are working to maximise the prospects of the Jubilee and TEN Fields.

The Ministry disclosed that prior to the award, the Government was in discussions with Tullow to resolve the outstanding tax matters between the parties.

The discussions, which also cover a separate proceeding concerning the disallowance of loan interest, will continue and will be resolved in the mutual interest of both parties.

“Tullow remains a vital partner to Ghana and is the country’s largest petroleum producer. Its operations in the Jubilee and TEN fields support Ghana’s energy security, domestic gas supply and thousands of Ghanaian livelihoods. It is in the national interest that this relationship endures,” Dr Forson stated.

The Government said it will work closely with Tullow to give effect to the award in accordance with Ghanaian law, with due regard to the continuity of operations in the Jubilee and TEN fields and Tullow’s capacity to sustain investments required in those fields.

“Ghana’s laws provide the Ghana Revenue Authority with the means to determine the time and manner in which assessed liabilities are met. The 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,” the statement added.

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