Galp moves to arbitration over tax dispute in Mozambique

Portugal’s energy giant Galp has initiated international arbitration proceedings at ICSID—the World Bank Group institution for resolving disputes between investors and states—regarding a tax dispute linked to the sale of its stake in Area 4 of the Rovuma Basin in Mozambique.

According to information reported by Lusa, citing the International Centre for Settlement of Investment Disputes (ICSID), the request for arbitration filed by Galp Energia SGPS, Galp Energia Portugal Holdings B.V., and Galp East Africa B.V. against the Republic of Mozambique was registered on June 26 as case ARB/26/31.

ICSID, a World Bank Group body specialising in the administration of arbitrations and other dispute resolution mechanisms between foreign investors and states, notes in the case file that the dispute concerns the “tax treatment” applied to the investment in the oil, gas, and mining sectors.

According to the same information, the companies are invoking the bilateral investment promotion and protection agreements concluded between Mozambique and the Netherlands in 2001, and between Mozambique and Portugal in 1995.

The proceedings are currently pending, and the latest update provided by the center indicates that the ICSID Secretary-General registered the request to institute arbitration on June 26.

Source: Jornal Económico; image: Galp