Ghana secures $393m tax victory over Tullow in international arbitration

Ghana has secured a major victory in an international tax arbitration case involving Tullow Ghana Limited, after an arbitral tribunal ruled in favour of the Republic over the taxation of business interruption insurance proceeds.

The tribunal, constituted under the Rules of Arbitration of the International Chamber of Commerce (ICC), 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 press statement issued by the Minister for Finance, Dr Cassiel Ato Forson, on Wednesday, September 30, the tribunal found that the GRA’s assessment did not breach the Petroleum Agreements.

It also ruled that the penalty imposed was properly applied, the assessment was not time-barred and the GRA’s enforcement action was lawful.

“The Tribunal ruled in favour of Ghana,” Dr Forson stated, adding that the 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.”

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

He said the government would work to implement the award in accordance with Ghanaian law while ensuring that Tullow retains the capacity to continue operating and investing in the Jubilee and TEN fields.