The International Court of Arbitration of the International Chamber of Commerce (ICC) has dismissed a challenge to a $393 million tax assessment liability and a penalty on Tullow Ghana Limited (TGL) by the Ghana Revenue Authority (GRA).
The decision of the tribunal, which is final and binding means that there is no legal hurdle currently impeding Ghana from enforcing the $393 million tax assessment.
The tribunal was presided over by Professor Albert Jan van den Berg, with Dr Michael Pryles Ao PBM, nominated by Tullow Ghana and J. Christopher Thomas KC, nominated by Ghana as co-arbitrators, with Tarunima Vijra as its Secretary.
In an arbitral award dated September 22, 2026, the tribunal based in London, United Kingdom, held that the tax assessment was reasonable, did not breach any law, such as the Petroleum Income Tax Law, PNDCL 188, as well as the Petroleum Agreements (PA) between Ghana and TGL and other partners.
“The Tribunal is satisfied that the tax assessment cannot be regarded as unreasonable,” the tribunal added.
With regard to the penalties imposed by GRA after the tax assessment, the tribunal held that they were not covered under the PA and, therefore, could not be termed as under the PA.
“Accordingly, the tribunal determines that the penalty in the GRA assessment does not fall within the scope of Article 12 of the Petroleum Agreements.
It follows that the imposition of the penalty cannot as a matter of principle, constitute a breach of Article 12,” the court added.
Background
The arbitration initiated by TGL followed a tax assessment by GRA in 2022 in which the revenue authority accused Tullow of tax evasion by under-declaring its income between 2016 and 2019 in order to reduce its tax liability.
According to the GRA, the said undeclared income amounted to more than $561 million, which TGL received as insurance proceeds to make up for losses the oil company would have made following the shutdown of FPSO Kwame Nkrumah.
After extensive investigations, the GRA made a tax assessment of more than $196 million on the $561 million and further imposed a penalty, bringing the total tax liability to $393 million.
Tullow Ghana vehemently opposed the assessment by the GRA and its notice of dispute before the ICC, and made its case on many grounds which could be summed up in two.
First, that the assessment was in breach of the PA of which TGL was a party to and secondly, the said insurance arrangement was put in place by Tullow Oil PLC, its parent company, and it was Tullow PLC that paid the insurance premium.
In its response, Ghana rejected the claims by TGL and argued that the assessment was not in breach of any law or the PA, and that indeed the entire process leading to the assessment was in conformity with the laws of the country and its contractual obligations.
Regarding the insurance, Ghana contended that TGL was a bona fide subsidiary of Tullow PLC, and that it was the direct beneficiary of the insurance.
“As the owner of the asset and who was directly and negatively impacted financially by the physical damage to the insured asset, TGL is the insured in law and in-fact under the insurance policy,” it stated.
Responses
The Minister of Finance, Dr Cassiel Ato Forson, and the Commissioner-General of GRA, Anthony Kwasi Sarpong, have both welcomed the ruling, saying it affirmed the country’s position that every company operating in the country, regardless of its size, was subject to Ghanaian law.
Tullow has also issued a statement acknowledging the ruling, but expressed disappointment at the tribunal’s decision.
The company said it would now consider next steps after further engagement with the government and provide an update in due course.
Dialogue
In a statement, Dr Forson said the government would continue discussions with Tullow to resolve the outstanding tax matters amicably.
“The discussions cover the matter determined by the tribunal and separate proceedings concerning the disallowance of loan interest,” the Finance Minister said.
Dr Forson described Tullow as a vital partner and Ghana’s largest petroleum producer, whose operations in the Jubilee and TEN fields supported the country’s energy security, domestic gas supply and thousands of Ghanaian livelihoods.
He said it was in the national interest for the relationship between Ghana and Tullow to endure.
He said the country’s laws empowered the GRA to determine the time and manner in which assessed liabilities were settled.
Dr Forson said the government would ensure that revenues due to the Ghanaian people were secured while preserving Tullow’s ability to continue operating and investing in Ghana as a going concern.
The Finance Minister and GRA also acknowledged the work of the Office of the Attorney-General, officials of the GRA and the ministry, and Ghana’s external legal counsel, Foley Hoag LLP, in defending the interests of the Republic.
GRA
In a statement, the GRA said the outcome underscored the importance of strong institutions, sound tax administration and the consistent application of Ghana’s laws.
It recognised the important contribution of the petroleum sector to Ghana’s economy and said it remained committed to administering the tax laws in a fair, transparent, consistent and predictable manner.
