Tullow Uganda Ltd v Heritage Oil and Gas Ltd & Anor [2013] EWHC 1656 (Comm) (14 June 2013)

Tullow Uganda Ltd v Heritage Oil and Gas Ltd & Anor [2013] EWHC 1656 (Comm) (14 June 2013)

The claimant is entitled to indemnity under Article 7.2 of the SPA for the $313,447,500 paid to the Uganda Revenue Authority. The payment was made under legal compulsion in response to agency notices which, on the evidence and Ugandan legal advice, were at least reasonably believed to be valid. The claimant did not act voluntarily or in collusion, and no contractual defence or breach disentitles it from recovery. Restitution does not arise as the contract claim succeeds.

Citation
[2013] EWHC 1656 (Comm)
Parties
Claimant: Tullow Uganda Ltd; First Defendant: Heritage Oil and Gas Ltd; Second Defendant: Heritage Oil Plc
Jurisdiction
England and Wales
Judgment Date
14 June 2013
Procedural Posture
Commercial Contract Dispute / High Court Trial Judgment
Outcome
Claim allowed for contractual indemnity; counterclaim dismissed
Legal Topics
Indemnity Under Contract, Tax Liability Allocation, Restitution/unjust Enrichment, Interpretation of Agency Notices, Enforcement of Foreign Tax Claims
Contract Law Commercial Law Tax Law Indemnity Under Contract Tax Liability Allocation Restitution/unjust Enrichment Interpretation of Agency Notices Enforcement of Foreign Tax Claims

Case Brief

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Parties

Tullow Uganda Ltd

Claimant

Heritage Oil and Gas Ltd

First Defendant

Heritage Oil Plc

Second Defendant

Procedural Posture

Commercial Contract Dispute / High Court Trial Judgment

Legal Issues

  1. 1 Whether the claimant is entitled to indemnity under Article 7.2 of the SPA for payment of Ugandan tax assessed against the defendant
  2. 2 Whether the agency notices served by the Uganda Revenue Authority were valid under Ugandan law
  3. 3 Whether the claimant paid under legal compulsion or voluntarily

Ratio Decidendi

The claimant is entitled to indemnity under Article 7.2 of the SPA for the $313,447,500 paid to the Uganda Revenue Authority. The payment was made under legal compulsion in response to agency notices which, on the evidence and Ugandan legal advice, were at least reasonably believed to be valid. The claimant did not act voluntarily or in collusion, and no contractual defence or breach disentitles it from recovery. Restitution does not arise as the contract claim succeeds.

Court Disposition

Claim allowed for contractual indemnity; counterclaim dismissed

Orders

  • Defendants to indemnify claimant for $313,447,500 plus interest under Article 7.2 of the SPA
  • Counterclaim by defendants dismissed