The applicants argued that Article 152(2) of the Constitution sets out the procedure applying to laws enacted under Article 152(1).  Article 152 of the Constitution provides that where under a law enacted by Parliament, one is given powers to waive or vary a tax that person should report to Parliament periodically. There is no evidence to show that the Minister of Energy and Mineral Development who signed the EA2 PSA ever reported to Parliament on the exercise of such powers, if she had any. There is no evidence that she declared the grant of a tax exemption under Article 23.5 to Parliament. Such an omission is fatal as the Constitution is clear.

The applicants argued that Article 23.5 of the EA2 is not a waiver or variation of taxes at all. Secondly it is not a waiver or variation granted “pursuant to a law enacted under Article 152(1) of the Constitution, as it is in an agreement. “It is a fait accompli.” An exemption is given by law. A waiver is given by an authority exercising its discretion taking into account special consideration. A waiver ends it an exemption. It is a question of semantics. An agreement to confer on a minister, powers to grant exemptions or waive taxes, there must be an enabling Act. In the case of the EA2 PSA there was no enabling Act that empowered the Minister of Energy to grant exemptions or waivers or variations of taxes.   Therefore the Tribunal finds that the Minister of Energy and Mineral Development did not have legal authority to grant an exemption under Article 23.5 of the EA2 PSA.

Any such grant offended the tax provisions of the tax laws including the ITA.   Issues 1.3 which was in respect of the application of international law to Article 23.5 of the EA2 PSA was abandoned by the applicants. The applicants however in the later issues discussed the principle of pacta sunt servanda. This is a principle of international law. We shall cross the bridge when we reach it.   Issue 1.4 was dependent on the findings on issues 1.2 and 1.3.  However the applicants submitted that the respondent is an agent of the GOU. The applicants argued that as an agent it is bound by the EA2 PSA signed by its principal, the GOU. The applicants cited Heritage Oil and Gas v URA Civil Appeal 14 of 2011 where the High Court held that the URA is a statutory body established under S. 2 of the URA Act as an agent of GOU.

The court noted that: “It follows that URA as a statutory agent is part and parcel of Government. It cannot therefore in my opinion be seen to disassociate itself from the PSA, which is the principle the Government lawfully signed with the Applicant. To attempt to do so would just be splitting hairs.” The applicants argued that the respondent is therefore bound by Article 23.5 of the EA2 PSA. It therefore should not deny the Minister’s authority to enter into the PSA, including Article 23.5   The Tribunal does not deny that the respondent is an agent of GOU.

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