‘Glenn Lall steps out of boundary to challenge tax waiver’ …Exxon tells High Court
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Kaieteur News – Exxon Mobil’s Subsidiary Esso Exploration and Production Guyana Limited (EEPGL) is maintaining its contention that Kaieteur News Publisher, Glenn Lall stepped outside his boundary when he moved to the High Court to challenge the Government of Guyana’s decision to grant extensive tax waivers to the oil operator and its affiliates.
Kaieteur News Publisher Glenn Lall.
The oil subsidiary which is a respondent to Lall’s application against the government raises several contentions for the court’s consideration including whether the agreement between the Government of Guyana (GoG) and ExxonMobil are subject to the principles of private law or public law; whether the acts of the Minister of Natural Resources and certain sub-articles of the Petroleum Agreement were ultra vires and in breach of sections 10 and 51 of Petroleum Exploration and Production Act (PEPA), sub-sections 1A and 1B of section 6 of the Financial Administration (and Audit) FAA; and Whether upon its proper interpretation the PEPA permits the payment of taxes due on behalf of licensees.
In its submission, the Exxon oil subsidiary which sought extra time from the Court to seek expert advice on the matter, outlined a number of grounds in which it contends is valid enough for the court to toss out Lall’s application. In the document, EEPGL through its attorneys, Senior Counsels, Edward Luckhoo and Andrew Pollard noted the plaintiff will only have locus standi in private law proceedings for declaratory relief not involving any public law element if he can establish that his rights are either being infringed or are threatened with infringement by the defendant.
Further, the oil company reasoned that for the court to entertain declaratory relief in private law proceedings, the applicant [Lall] must show an act or omission had infringed or threatened to infringe any right of the applicant derived from private law.
Added to this, EEPGL said that in his private capacity, for declaratory relief alleging breach of public rights without claiming any special loss or damage or injury suffered over and above the public. “There is no assertion that there was any infringement on the applicant in his private rights whereby the application alleges he suffered special loss or damage… It is pellucid that the legal basis on which Lall application is premised is misconceived,” the submissions outlined.
The issue of private law was also raised by the GoG. In its first submission, the GoG had also described its deal with the oil companies as a matter of private law. The case which was filed in January by Mr. Lall through his attorney Mohamed R. Ali contends, among other things, that many of the provisions listed under Article 15.1 of the Petroleum Agreement, dated June 27, 2016 between the GoG and the oil companies, grants exemptions to persons other than licensees, which violate the Petroleum Exploration and Production Act (PEPA), the Financial Administration (and Audit) Act, the Prevention of Discrimination Act, and the Constitution.
With respect to violations of the Petroleum Law, the publisher contended that this occurs at Article 15.1 of the oil contract which states: “…no tax, value-added tax, excise tax, duty, fee, charge or other impost shall be levied at the date hereof or from time to time thereafter on the Contractor or Affiliated Companies, in respect of income derived from Petroleum Operations or in respect of any property held, transactions undertaken or activities performed for any purpose authorised or contemplated hereunder…”
Lall therefore requested declarations from the Court that the provisions are unlawful, null and void, and of no legal effect.
However in an affidavit in response to the case, Gopnauth Bobby Gossai Jnr., a Senior Petroleum Coordinator at Ministry of Natural Resources, defended the decision by the government to grant Exxon, its subsidiary and its partners broad tax waivers. He noted that the Minister has the express power by virtue of sections 10 and 51 of the Petroleum Act to enter into the said petroleum agreement and direct by the order, which was subject to the affirmative resolution of the National Assembly, that specified Acts relating to tax, shall not apply to a person who enters into a PSA with the GoG.