Ghana has secured a major legal victory in an international tax arbitration case against Tullow Ghana Limited, with an arbitration tribunal ruling in favour of the Republic and upholding the Ghana Revenue Authority’s (GRA) tax assessment on business interruption insurance proceeds.
According to a statement issued by the Ministry of Finance, the arbitral tribunal, constituted under the Rules of Arbitration of the International Chamber of Commerce, delivered its award in proceedings brought by Tullow Ghana Limited challenging the taxation of business interruption insurance proceeds.
The tribunal dismissed all claims brought by Tullow and upheld in full the GRA’s tax assessment of US$393,091,993.70.
The ruling found that the assessment did not breach the petroleum agreements governing Tullow’s operations, that the penalty imposed was properly applied and that the assessment was not time-barred. The tribunal further concluded that the GRA’s enforcement action was lawful.
The Ministry of Finance commended the Office of the Attorney-General, the Ghana Revenue Authority and Ghana’s external legal counsel, Foley Hoag LLP, for successfully defending the interests of the state throughout the proceedings.
The government said the outcome validates Ghana’s long-standing position that every company operating in the country, regardless of size, is subject to the laws of Ghana and must comply with its tax obligations.
According to the ministry, the ruling comes at a critical period when Ghana and its Jubilee partners are working to maximise the prospects of the Jubilee and TEN oil fields.
Despite the legal victory, the government indicated that discussions with Tullow are ongoing to resolve other outstanding issues between the parties amicably. These include matters determined by the tribunal as well as separate proceedings relating to the disallowance of loan interest.
The statement noted that Tullow remains an important partner in Ghana’s petroleum sector and is the country’s largest oil producer. Its operations in the Jubilee and TEN fields contribute significantly to energy security, domestic gas supply and employment.
Government assured that it would work closely with Tullow to implement the tribunal’s award in accordance with Ghanaian law while ensuring operational continuity in the Jubilee and TEN fields.
The Ministry of Finance also stated that measures would be taken to secure revenues due to the Ghanaian people while preserving Tullow’s ability to continue operating and investing in the country.
Finance Minister Dr Cassiel Ato Forson said the government remains committed to enforcing Ghana’s tax laws fairly while safeguarding national interests and maintaining Ghana’s reputation as a favourable destination for investment.