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Monday, June 17, 2013
The verdict is in regarding the case between Tullow Uganda Ltd., a subsidiary of Tullow Oil, and Heritage Oil Plc’s Heritage Oil & Gas Ltd.. The High Court in London found in favor of Tullow in regards to Tullow acquiring Heritage’s assets in Uganda and the taxes owed to the Ugandan government by Heritage for the sale as capital gains tax (case No: 2011 Folio 471).
In 2010 Tullow agreed to acquire Heritage’s Ugandan assets, pursuant to a the Uganda Revenue Authority (URA) Tullow was designated as the agent in relation to the transaction. As the agent the URA required Tullow to pay, on Heritage’s behalf, $313 million to the URA. Tullow sought an indemnity from Heritage under the Sales and Purchase Agreement (SPA) in respect of this funds payment to the URA.
In the judgment, Justice Burton found in favor of Tullow’s indemnity claim for the $313 million in its entirety and also dismissed Heritage’s counterclaim. A further hearing will be scheduled to address matters such as the amount of interest Heritage owes Tullow on the funds and Tullow’s submissions in respect of payment of its costs by Heritage.
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