Under Article 119(4) (c) of the 1995 Constitution, the functions of the Attorney General include to represent the GOU in courts or any other legal proceedings to which the GOU is a party. However the TAT Act envisages one respondent, Uganda Revenue Authority. Though the Uganda Revenue Authority is an agent for GOU, it did not sign the EA2 PSA. The contractual obligations of the GOU cannot be determined when it is not a party before the Tribunal. However, the Tribunal is not interested in the contractual obligations of the parties. What is of interest to the Tribunal are the tax liabilities of the taxpayers, in this case the applicants. Tax liability is set by statute. Be what it may, what the parties say was their intention may not help when it comes to determining tax liability. Where an agreement is involved, the taxman should determine whether it is in line with the taxing legislation. Does Article 23.5 of the EA2 PSA afford protection to the taxpayers, the applicants? This involves interpretation of the Article 23.5 of the EA2 PSA in light of the ITA.

The taxman has to make an objective analysis or interpretation of the agreement in light of the statutory provisions. In Investors Compensation Scheme Ltd V West Bronwich Building Society 1998 1 ALL ER 98 Lord Hoffman LJ said: “(1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation which they were at the time of the contract. (2) The background was famously referred to by Lord Wilberforce as the matrix of fact; but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonable to the parties and to the exception to be mentioned next, it includes anything which would have affected the way in which the language of the document would have been understood by a reasonable man. (3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action of rectification. The law makes this distinction for reasons of practical policy and in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. (4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammar; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean…” The said authority was cited in Golden Leaves Hotels and Resorts Limited and Apollo Hotel Corporation V Uganda Revenue Authority Civil Appeal 64 of 2008. The Tribunal is interested in how a reasonable man would have interpreted Article 23.5 of the EA2 PSA in light of the ITA rather than the intentions of the parties.

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