1. Legal Practitioners & Arbitrators
THE AFRICAN CONTINENT – MANAGING GOVERNMENT INTERVENTION IN ENERGY CONTRACTS. HIGHLIGHTS FROM CONGO, UGANDA, NIGERIA AND GHANA
Presented By:
MRS. ‘FUNKE ADEKOYA, SAN
Partner
Legal Practitioners & Arbitrators

2. EXPECT POST CONTRACT INTERVENTIONAS A REVENUE RAISING /REVENUE PROTECTION EFFORT

3. CONGO NATIONALISATION – HAVE A STABILISATION CLAUSE
Agip SPA v People’s Republic of Congo (1979): the Government of Congo entered into an agreement with Agip under which Agip agreed to sell 50% of its shares to the Government of Congo. The Agreement included a stabilisation clause pursuant to which the government undertook not to apply certain laws and decrees as well as ‘any other subsequent law or decree that aims to alter the Company’s status as a limited liability corporation. The Government subsequently nationalised the company. The matter was submitted for arbitration and the investor’s claim was successful.

4. UGANDA RE-INTERPRETATION OF FISCAL CONTRACT TERMS – CLEAR DRAFTING IS ESSENTIAL
Tullow Uganda Operations Pty Ltd V. Republic of Uganda (2011): the Ugandan Revenue Authority levied income tax on profits made by Tullow from the transfer of its interests in some Exploration Areas. The Production Sharing Agreement (PSA) with the Republic of Uganda contained a clause exempting transactions which involve the assignment or transfer of an interest under the PSA from tax.
Heritage Oil v Uganda Revenue Authority: The Ugandan Revenue Authority claimed Heritage Oil owed US$435 million in capital gains tax from the US$1.45 billion proceeds of the sale of its rights to two oil blocks in Uganda’s Lake Albert region to the UK-listed Tullow Oil in July Heritage Oil disputed the assessment. The Ugandan Tax Appeal Tribunal ruled in favour of the Ugandan Government. The parties subsequently submitted the matter to arbitration by the UNCITRAL Tribunal where an award was given, once again, in favour of the Ugandan Government.

5. UGANDA RE-INTERPRETATION OF FISCAL CONTRACT TERMS – CLEAR DRAFTING IS ESSENTIAL
Total E&P Uganda BV v. Republic of Uganda (ICSID Case No. ARB/15/11): Total filed a request for arbitration in 2015 disputing stamp duties imposed by the Ugandan Government on the acquisition of Total’s interest in Exploration Area 2.

6. NIGERIA POSSIBILITY OF INTERVENTION BY NON –CONTRACTUAL PARTIES – NON- ARBITRABILITY CLAIMS
Shell Nig. Exploration & Production & 3 Ors v. FIRS & Anor [2016] : The 1st respondent brought an action at the Federal High Court to challenge the jurisdiction of an arbitral tribunal on the ground that the issues submitted for arbitration by the appellants bordered on tax matters and as such were non –arbitrable. The Federal High Court gave judgment in favour of the respondents and ruled that issues relating to taxation and government revenue are only within the exclusive jurisdiction of the Federal High Court and that the proceedings of the tribunal were a nullity. Dissatisfied with the ruling of the Federal High Court, the appellants appealed to the Court of Appeal which upheld the decision of the lower court.

7. GHANA DUE DILIGENCE ESSENTIAL IS LEGISLATIVE APPROVAL REQUIRED FOR OIL AND GAS CONCESSIONS?
The Constitution:
Section 268(1) of the Constitution of the Republic of Ghana provides –
“Any transaction, contract or undertaking involving the grant of a right or concession by or on behalf of any person including the Government of Ghana, to any other person or body of persons howsoever described, for the exploitation of any mineral water or other resource of Ghana made or entered into after the coming into force of this Constitution shall be subject to ratification by the Parliament.”

8. Conclusion
Successful arbitration outcomes will depend on the specificity of contract terms.
Putting fiscal terms into the contract is not a guarantee that disputes will be resolved by arbitration.

9. LEGAL PRACTITIONERS & ARBITRATORS
ACCRA
7th Floor, Suite B701
The Octagon
Accra Central, Accra
PMB CT 72
Accra, Ghana
T: ( )
224845
F: ( )224824
ABUJA
4th Floor
AdamawaPlaza
1st Avenue,
Off Shehu Shagari Way
Abuja, FCT, Nigeria
T: (+234-9) ;
(0)
F: (+234-9)520276
PORT HARCOURT
2nd Floor,
UPDC Building
26 Aba Road
Port Harcourt
Rivers State, Nigeria
T: ( ) ,464515
F: ( )
LAGOS
7th Floor
Marble House
1 Kingsway Road
Ikoyi, Lagos
Nigeria
T: (+234-1) , ,
F: (+234-1)

10. THANK YOU