US firm to defend government in fresh Tullow lawsuit
Posted Monday, February 18 2013 at 15:47
It is not clear how the company already handling the London arbitration case, was assigned to defend government in Washington D.C.
The government has reportedly hired an American law firm to represent it in a tax arbitration case that UK oil company, Tullow, filed with the International Centre for Arbitration of Investment Disputes (ICSID) in Washington D.C.
Tullow took the government to the World Bank-created court last October, and the dispute relates to “assessment of value added tax (VAT) on Tullow’s import of certain goods and services” for exploration works, according to the Ugandan general manager, Mr Jimmy Mugerwa.
Curtis, Mallet-Provost, Colt & Mosle LLP also represents Uganda at the ongoing parallel $404 million capital gains tax dispute adjudication in London that Tullow initiated against Uganda and Heritage oil company.
The disagreements emanated from Heritage’s refusal to pay capital gains tax on the sale to Tullow, at $1.45 billion, of its 50 per cent stakes in the Albertine Graben oilfields.
Deputy Attorney General Freddie Ruhindi said he had not been “briefed” on the reported hiring of Curtis, Mallet-Provost, Colt & Mosle LLP and referred this newspaper to Attorney General Peter Nyombi. An aide said the chief government legal advisor was held up in meetings for most of Thursday.
We could not establish how much the government would pay the foreign law firm, the amount it has so far spent on the London case or why lawyers in the Attorney General’s chambers do not argue the cases themselves.
By May 2012, government had exhausted the $1.5 million (Shs3.9b) budgeted for the London arbitration case, and Mr Nyombi said then they required an extra Shs5 billion.
The Attorney General has, since his appointment in 2011, and more recently a fortnight ago, flown with selected attorneys in his office to attend proceedings of the London arbitration case, whose details remain scanty. Some Members of Parliament too flew to London as observers.
Analysts say reliance on foreign experts raises professional competence and capacity concerns about the Attorney Generals’s office, even when many lawyers in the chamber keep flying abroad at an additional cost to the taxpayer, mostly to witness proceedings run by hired expatriates.
In the latest arbitration case at ICSID in Washington D.C, Tullow has hired top UK law firm Ashurst and Uganda’s Kampala Associated Advocates to represent it.
ICSID secretariat, in reply to our email enquiries about specifics of Tullow’s complaints against the government, noted that it is a “neutral organisation” and does not, as policy, “comment on cases” before it.