day 5 tullow uganda limited vs heritage oil.docx

Day 5 Tullow Uganda Limited v (1) Heritage Oil & Gas; (2) Heritage Oil Plc

19 March 2013

1 Tuesday, 19 March 2013

2 (10.15 am)

3 Housekeeping

4 MR JUSTICE BURTON: Yes, we were going to look at

5 timetabling. I, of course, had forgotten when I was

6 mentioning it yesterday about Mr Kabatsi which makes it

7 even worse.

8 MR WOLFSON: My Lord, my learned friend and I have had an

9 email and oral discussion. My Lord, what we would

10 propose is this, and I think this is agreed. Without

11 wishing at all to put any guillotines or anything else,

12 if my learned friend finishes with Mr Martin at

13 lunchtime so that we can start the next witness after

14 some re-examination at 2.30-ish, I will call Mr Inch.

15 If the cross-examination of Mr Martin goes on longer, so

16 that Mr Martin is effectively most of today, then

17 I would propose to call Mr Kabatsi so Mr Kabatsi can go

18 back to Uganda.

19 MR JUSTICE BURTON: Yes.

20 MR WOLFSON: Which would then mean that we wouldn't have to

21 interpose Mr Atherton, so to speak, within a witness and

22 we would have Mr Inch next week.

23 MR JUSTICE BURTON: Right.

24 MR WOLFSON: But, my Lord, I think that we are still --

25 I was going to say "confident", very hopeful -- I would

1 say confident, that we can finish the evidence, both

2 factual and expert, by the end of next week.

3 MR JUSTICE BURTON: I am sure we can. But what I needed

4 your complaisance about because, as I say, I am sure we

5 can; I'm sure we can't if we don't have Monday, Tuesday

6 or Wednesday morning.

7 MR WOLFSON: Absolutely. Frankly, obviously my client

8 would -- this may come as a surprise to your Lordship --

9 would rather I was here all the time, but --

10 MR JUSTICE BURTON: I share their pleasure in your company.

11 MR WOLFSON: Your Lordship is very kind. But given what

12 your Lordship says about how we will use that Monday,

13 Tuesday and Wednesday morning, we very much hope that we

14 can accommodate it and we are, therefore, willing to go

15 along with that timetable.

16 MR JUSTICE BURTON: So one way or another, there is no doubt

17 at all, whether Mr Inch starts on Monday or even on

18 Tuesday, we'll finish him next week because we are not

19 going to start the experts later than lunchtime

20 Wednesday and if we do start them lunchtime Wednesday

21 you will be back and not a problem.

22 MR WOLFSON: Exactly.

23 MR JUSTICE BURTON: As long as we have Mr Atherton this

24 week.

25 MR WOLFSON: Precisely, my Lord.

1 MR JUSTICE BURTON: So Mr Atherton is going to be Thursday.

2 MR WOLFSON: My Lord, yes.

3 MR JUSTICE BURTON: And we either have had Mr Kabatsi in the

4 meantime or we have started Mr Inch.

5 MR WOLFSON: Inch part 1.

6 MR JUSTICE BURTON: Exactly so.

7 MR WOLFSON: My Lord, so far as the Thursday, 26 April is

8 concerned, my Lord, we are --

9 MR JUSTICE BURTON: Friday.

10 MR WOLFSON: -- I am sorry, Friday, 26 April, my Lord, is

11 concerned, we are making efforts to ensure that I am

12 available for that and I hope to be able to confirm that

13 next week. At the moment there is a hearing before one

14 of your Lordship's fellow judges listed on that date and

15 we are trying to sort that out.

16 MR JUSTICE BURTON: Right. Well, I mean, I would hope that

17 that would be possible. As I said to you, I can't do,

18 for various reasons, the first two Fridays. Just let me

19 see whether -- I don't want to move off because I have

20 now sorted it out with the Commercial Court that

21 26 April is available to us. But 3 May isn't very good

22 is the answer.

23 MR WOLFSON: Right.

24 MR JUSTICE BURTON: I could only do a half day on 3 May.

25 MR WOLFSON: We need more than that.

1 MR JUSTICE BURTON: The 10 May I could myself do, I would

2 have to sort it out with the Commercial Court, but when

3 will we know whether you can do 26 April?

4 MR WOLFSON: My clerks are trying to sort it out at the

5 moment so I would hope to be able to update your

6 Lordship by the end of this week.

7 MR JUSTICE BURTON: By the end of this week we will go hard

8 on 26 April or alternatively, Mr Qureshi, what is your

9 position on 10 May?

10 MR QURESHI: My Lord, I am supposed to be starting

11 a two-week case at the end of that week, from 9 May

12 onwards.

13 MR JUSTICE BURTON: Not in the Commercial Court?

14 MR QURESHI: No, it is an LCIA arbitration.

15 MR JUSTICE BURTON: So the 10th isn't any good for you.

16 MR WOLFSON: We will look at the 26th and I will come back

17 on that.

18 MR JUSTICE BURTON: There is time enough to return that one,

19 if needs be.

20 MR WOLFSON: Yes, it is an application for permission to

21 appeal and costs of a trial which I have done, but,

22 my Lord, I had a junior in it, it is a fairly short one.

23 MR JUSTICE BURTON: (a) you have a junior and (b) if

24 necessary, tell me who my brother judge is and I can

25 perhaps persuade him to start at 9.30 or something of

1 that kind, him or her.

2 MR WOLFSON: It is Mr Justice Popplewell.

3 MR JUSTICE BURTON: I think we can prevail upon him to sit

4 early. He's young and enthusiastic.

5 MR WOLFSON: I am sure all judges are enthusiastic.

6 MR JUSTICE BURTON: Not all of us are young.

7 MR WOLFSON: My Lord, there are a couple of other points we

8 could discuss at the moment as we are on housekeeping.

9 The mention of LCIA arbitration reminds me of the

10 UNCITRAL arbitration of course. We haven't yet, I am

11 afraid, had a letter for us to countersign.

12 MR QURESHI: Can I answer that?

13 MR WOLFSON: We are hoping to have that.

14 MR JUSTICE BURTON: Yes, please.

15 MR QURESHI: My Lord, I can only amplify my learned friend's

16 comments so far as the judiciary of our court -- both

17 youthful and energetic, without exception.

18 MR JUSTICE BURTON: Thank you.

19 MR QURESHI: There has been considerable energy applied by

20 those who are instructing me in terms of communication

21 with the Ugandan authorities. If I can hand up to your

22 Lordship a cover email and letter which has been sent to

23 the lawyers for the Ugandan authorities (Handed).

24 Your Lordship will see that the cover is an email

25 from Mr Alex Strong an associate at McCarthy's, sent to

1 four members of the august legal team for Uganda.


3 MR QURESHI: And it identifies the arbitration:

4 "A copy of the letter that we intend to send to the

5 Arbitrators is attached."

6 Asking for confirmation that the Ugandan

7 Government -- which is of course, one mustn't forget,

8 the other party to the confidential arbitration.

9 MR JUSTICE BURTON: Of course, I don't forget, yes.

10 MR QURESHI: We see the letter is headed "Joint letter to

11 the Arbitrators." Your Lordship can see the names of

12 the distinguished Arbitrators.


14 MR QURESHI: "We, together with the respondent ...(Reading

15 to the words)... you may recall from the claimant's

16 letter dated 28 July claimant is currently defending an

17 action in the English Commercial Court [reference

18 numbers given]...(Reading to the words)... from the

19 claimant in respect of a payment made by Tullow to the

20 Ugandan authorities tax liabilities. The matter is now

21 a trial before the Commercial Court ...(Reading to the

22 words)... and the accordingly, write to let you know

23 this ..."

24 MR JUSTICE BURTON: I have read it. You have addressed it

25 with much more courtesy than I would have done but there

1 it is. You have done so.

2 What is the position?

3 MR QURESHI: My Lord, that letter has been sent.

4 MR JUSTICE BURTON: They have agreed to that?

5 MR QURESHI: No, forgive me, the email has been sent to

6 Messrs Curtis. Lest there be any doubt, I understand

7 there are two representatives from Messrs Curtis who

8 have been in court throughout.


10 MR QURESHI: There is a Miss Luciana Ricard, an associate of

11 Curtis, and a Victoria Atkinson, a trainee. I won't be

12 cruel and point out who the trainee is but she is

13 smiling. So I understand they have been present in

14 court throughout and what we intend to do, for the

15 avoidance of any doubt, we will give them a hard copy as

16 well.

17 MR JUSTICE BURTON: And you say you are attempting to

18 procure support too?

19 MR WOLFSON: That is the first I know of the email and the

20 letter but now we know of it, if there is anything we

21 can do, we will. We are not party to the arbitration.

22 MR JUSTICE BURTON: I think both those sitting listening and

23 those behind you who can assist and those behind you

24 should know that I would like this letter to go off

25 today to the Arbitrators. Every day that is lost is

1 a day which could be spent turning their minds to

2 finalising the award.

3 MR QURESHI: My Lord, we have done our best.

4 MR JUSTICE BURTON: You have.

5 MR QURESHI: We have contacted Curtis. There are two

6 representatives, one assumes at the expense of the

7 Ugandan taxpayer, who have been present in these

8 proceedings throughout and we respectfully observe we

9 can do no more than we have done.

10 MR JUSTICE BURTON: You can't. And given that I know there

11 are representatives of Curtis here, if I can emphasise

12 what I am after is the result and if at all possible,

13 clearly if the Arbitrators can't drop everything, but

14 they may be very near to conclusion of their thoughts

15 and if we can have that by next Thursday that would be

16 greatly appreciated.

17 MR QURESHI: Thank you, my Lord.

18 MR JUSTICE BURTON: That is the result from the Arbitrators,

19 the award from the Arbitrators.

20 MR QURESHI: Indeed, my Lord. We are all anxiously awaiting

21 that.

22 MR ALLEN GRAHAM MARTIN (continued)

23 Cross-examination by MR QURESHI (continued)

24 MR QURESHI: Mr Martin, good morning again.

25 A. Good morning.

1 Q. Yesterday you were telling us how a meeting had been

2 hastily summoned in Gulu, Northern Uganda, which ended

3 on the 18th, rather late on the day. On the 19th you

4 travelled back to Kampala with the Tullow -- forgive me

5 if I say entourage, but the Tullow group, and a meeting

6 took place in the Tullow offices on 19 November. Do you

7 recall?

8 A. Yes.

9 Q. And in the context of that meeting, could you just help

10 us, who was present at this meeting in the Tullow

11 offices?

12 A. It would have been Mr Inch, Mr O'Hanlon and myself from

13 Tullow, probably with Mr Glover, the local general

14 manager. From KAA, there was Mr Kabatsi, Mr Kambona,

15 Mr Mpanga and Mr Karuhanga. I'm not sure about

16 Mr Matsiko, I can't remember if he was there or not.

17 Q. Can I just you, just while we are talking about

18 Mr O'Hanlon, he who likes his scripts, can I ask you to

19 look at bundle E 17/4650. E17/4650.

20 A. Yes.

21 Q. Do you have that?

22 A. Yes.

23 Q. Does my Lord have it?

24 MR JUSTICE BURTON: You plough on.

25 MR QURESHI: Have a look, just refresh your memory,

1 Mr Martin. (Pause). This is an email that was sent by

2 Mr O'Hanlon, Vice President African Affairs, on

3 19 November, Friday, 2 o'clock. This is after you had

4 returned, yes?

5 A. Yes, it would have been.

6 Q. To Mr Shearman, UK High Commissioner, yes?

7 A. Yes.

8 Q. "Subject: Tim O'Hanlon notes, M7 script,

9 18 November 2010."

10 My Lord, if one turns over the page, one sees in

11 substance the text which in large part was seen

12 previously. Do you recall, my Lord, the 11 November

13 script?

14 Just help us. Have a look at this. In terms of the

15 meeting on 18 November, you told us that there wasn't

16 any attendance note produced by anybody within Tullow

17 that you could recall at the time, certainly we haven't

18 seen one, but would it be a fair observation that what

19 Mr O'Hanlon is doing by saying "M7 script, 18 November",

20 and sending this the day after the meeting, that this

21 was text that Mr O'Hanlon used at the meeting? Have

22 a look at it and tell us if it refreshes your memory.

23 A. He would have used themes from this. We really didn't

24 get the floor in the way that we might have hoped.

25 Q. This was a very significant meeting with His Excellency,

1 President Museveni, wasn't it?

2 A. Yes.

3 Q. Just help us then:

4 "Hi Martin, your info and amusement."

5 What's so funny about a script that has been

6 produced for a meeting with the President of Uganda?

7 A. I don't know what Tim would have been referring to there

8 to Mr Shearman.

9 Q. All right. Back to Tullow offices in Kampala. Just

10 help us understand, because this is an important meeting

11 on everyone's view -- your view, Mr Inch's view, this is

12 a meeting at which Mr Kabatsi opines. Just help us: at

13 this point in time where was Tullow's office within

14 Kampala? Were you within a purpose-built office block?

15 A. It was an office block on the golf course road. Yes, it

16 was purpose-built, I suppose.

17 Q. Within the office, how large is the office space? Do

18 you have a meeting room in your offices?

19 A. We all crowded into the room which I had been using

20 which was an executive office.

21 Q. The room that had had the desk full of notes that you

22 had to periodically destroy, is that the room?

23 A. The room I was using, yes.

24 Q. In terms of the size of the room, just help us

25 understand how big was the room? Did it have enough

1 space for one desk, two desks?

2 A. It had an executive desk but it also had a round meeting

3 table around which you could fit around half a dozen

4 chairs. If there were more people than that at the

5 meeting we must have squeezed more in. It was a bit of

6 a squeeze.

7 Q. It was an executive desk. I assume when you say "an

8 executive desk", not just an ordinary desk, an executive

9 desk is a bit larger? I am just trying to understand

10 the size of the room.

11 A. It's not a big room. Square footage, this sort of area

12 that we are all sitting in here.

13 Q. This?

14 A. From that pillar to his Lordship back to me. That sort

15 of space.

16 Q. That was the size of your office?

17 A. Yes.

18 Q. The office that you were using. A reasonable size?

19 A. Yes, a bit smaller, actually, on reflection.

20 Q. Certainly bigger than some of the rooms that we who

21 occupy buildings called chambers are used to but

22 certainly a room that you were using, a room that had

23 a table with half a dozen chairs around it?

24 A. Yes.

25 Q. Now, help us: where were you sitting? Were you sitting

1 behind the executive desk or were you sitting around the

2 table?

3 A. I don't remember. There had been a lot of meetings in

4 that room. I don't remember the layout for that

5 particular day.

6 Q. Does the executive desk have a computer on it?

7 A. Yes.

8 Q. Evidently, as you told us, the desk had drawers. The

9 round table with half a dozen chairs; how many other

10 chairs were in the room?

11 A. I don't remember.

12 Q. Who else was in the room?

13 A. I thought I had answered the question.

14 Q. If I have forgotten then perhaps you can refresh?

15 A. Well, there was Mr O'Hanlon, Mr Inch and myself,

16 possibly Mr Glover, our local manager, but I can't

17 remember. From KAA, we had Mr Kabatsi, Mr Mpanga,

18 Mr Kambona and I can't remember if Mr Matsiko was there.

19 Q. Say that again. So Mr Kabatsi, Mr Mpanga, Mr Kambona

20 and Mr Joe Matsiko?

21 A. I can't remember if Mr Joseph Matsiko was at that

22 meeting.

23 Q. What about --

24 A. Mr Karuhanga. Did I mention Mr Karuhanga?

25 Q. No. I was about to ask you that.

1 A. I think Mr Karuhanga was there.

2 Q. Elly, the President of Tullow of Uganda?

3 A. Yes.

4 Q. The founding father of KAA?

5 A. Yes.

6 Q. So at least four, potentially five, KAA people are there

7 at this meeting?

8 A. Yes.

9 Q. And there are Mr O'Hanlon, Mr Glover, Mr Inch and you?

10 A. Yes.

11 Q. So that is nine, and you have a table with six chairs

12 and you have the executive desk, so is that what you

13 meant about crowding round the table?

14 A. Yes, if that number of people were in the room we'd have

15 had to bring other chairs in. Perhaps Mr Glover wasn't

16 there. I can't remember.

17 Q. Mr Mpanga is the chap who had opined in August that

18 there was no way a court would find Tullow to be in

19 possession, do you remember?

20 A. Yes.

21 Q. And Mr Matsiko was the friend of Allen Kagina who had

22 appeared, who was making some progress trying to

23 persuade her that their position was not as hard and

24 fast as she thought?

25 A. Mr Matsiko was a partner in KAA; yes.

1 Q. Mr Kabatsi, you reminded us, you had met previously in

2 early 2010?

3 A. Early 2010, yes.

4 Q. And not before and not subsequent until

5 18 November 2010?

6 A. That might have been the way the question was phrased.

7 I might have met Mr Kabatsi a couple of times. I was in

8 the KAA offices a few times, but it would have just been

9 a matter of courtesy visits over coffee. He wasn't

10 working on our issues at that time.

11 Q. He was the managing partner?

12 A. No, I think Mr Karuhanga was the managing partner.

13 Q. At that time?

14 A. I think Mr Karuhanga was managing partner. That was my

15 impression.

16 Q. In terms of your recollection as to how Mr Kabatsi may

17 have been described by his colleagues to you, did you

18 know that he had been the former Director of Public

19 Prosecutions when you met him in early 2010 or even

20 subsequent to that?

21 A. I don't recall now what I was told about Mr Kabatsi's

22 history although I do know that he was described as the

23 former Solicitor General and the one who was holding

24 that office when our Block 2 PSA was signed. I don't

25 quite remember if I was told the rest of his history.

1 Q. And is it fair that that was really the critical feature

2 of Mr Kabatsi's background, that when that PSA was

3 signed he was the Solicitor General and am I right that

4 at that point in time the Solicitor General had to sign

5 off on contracts beyond a certain value?

6 A. I think I was told that afterwards. I wasn't aware of

7 that at the time.

8 Q. So Block 2 and payment of tax or otherwise on Block 2 is

9 a very important point for you, isn't it? That is the

10 reason why you, as appears, discussed this issue at

11 length on 19 and 20 October and the Ugandan authorities

12 sought to deploy case law and legal principles?

13 A. Yes.

14 Q. Mr Martin, we have got to your office now. We have

15 understood that there are eight, possibly nine, people

16 sitting round the table and Mr Kabatsi's central

17 qualification is his presence as Solicitor General when

18 the PSA was signed with reference to the Block 2 matter.

19 At this particular meeting do you recall whether anybody

20 was taking notes?

21 A. I don't recall. Mr Inch probably. I don't recall

22 whether the others were or not.

23 Q. Were you taking any notes?

24 A. Yes, I probably was.

25 Q. What time did the discussion, the debrief, the

1 post mortem on the Gulu meeting begin?

2 A. My recollection is that it began immediately after we'd

3 all -- I'm not sure. We flew back into Kampala, the

4 Tullow representatives would have gone to our office. I

5 can't remember if the KAA representatives came straight

6 to our office or they went to their office first and

7 then came to us. I think maybe everyone came to our

8 office immediately from the plane.

9 Q. Because you all travelled together?

10 A. Yes.

11 Q. But you mentioned that the meeting started late morning.

12 Would that be about right?

13 A. Yes, I think the plane left Gulu at about 9 which would

14 have meant a 10.30 arrival or so at the airfield outside

15 Kampala and that can take up to an hour to drive in from

16 Kajansi airstrip into Kampala.

17 Q. Is that a domestic airfield?

18 A. It is a very small private airfield.

19 Q. So you all flew -- this is not a criticism so don't

20 misunderstand. So you flew out on a private jet and

21 came back on a private jet?

22 A. It wasn't so much a jet. It was one of the planes we

23 use to get to our field operations.

24 Q. I understand. So it is about 11.30/12 on 19 November

25 the discussion commences. Was there any kind of an

1 agenda? You had nine people there?

2 A. I don't think -- I don't recall a formal agenda.

3 I recall us going through the issues that cropped up the

4 day before.

5 MR JUSTICE BURTON: We have in the bundle some summaries of

6 what had occurred but they are not dated

7 until November 21 and November 22: Tullow's

8 understanding of the package of agreed points. That

9 hadn't been put together at the time you had your

10 meeting?

11 A. I don't think it had, my Lord.

12 MR QURESHI: What time did the meeting end?

13 A. I don't recall.

14 Q. How long did it last, if you can help us?

15 A. I don't really recall, Mr Qureshi, but my best guess is

16 that we finished in time for a lateish lunch.

17 Q. So presumably when Mr O'Hanlon sent the email to

18 Mr Shearman for his information and amusement at

19 2 o'clock, that wasn't whilst you were immersed in

20 intricacies of the debrief of Gulu, this was after the

21 meeting ended?

22 A. I've no idea. I'm always a bit wary about these

23 timelines as well. You never quite know which time zone

24 the email or the BlackBerry is picking up.

25 Q. We can only go on the times identified on the copies

1 that have been provided to us. But anyway, the meeting

2 may have lasted a couple of hours?

3 A. That seems fair.

4 Q. Help us in terms of who took the lead in the meeting.

5 A. I don't recall a leader of the meeting. I think we all

6 chipped in. I probably led in the sense of making sure

7 we'd covered all of the agenda items from the day

8 before.

9 Q. That seems sensible when you have eight or nine people

10 in a room and after all you are the general counsel,

11 company secretary. So in terms of leading the meeting,

12 can you remember how the meeting started?

13 A. No.

14 Q. Can you remember when you first spoke to Mr Kabatsi in

15 the meeting?

16 A. No, it was one of those meetings where an issue would

17 come up and everyone would get the chance to give their

18 opinion and we would move on.

19 Q. Insofar as you can help us, the question of Tullow's tax

20 was not the first item on the agenda?

21 MR JUSTICE BURTON: Was it?

22 A. I don't recall, my Lord, which item we started off with.

23 MR QURESHI: Help us in terms of your discussion with

24 Mr Kabatsi. Just help us understand when you first

25 turned to Mr Kabatsi with regards to the Heritage issue,

1 let us call it that.

2 MR JUSTICE BURTON: Did you turn to Mr Kabatsi about the

3 Heritage issue?

4 A. Yes, I did, my Lord. I also seem to recall that we

5 touched on it briefly the night before as we were

6 leaving the President's area, not in great detail. We

7 had to find a place to stay that night, which was quite

8 tricky at about 11 o'clock at night in Gulu, and once

9 we'd found a place, some of us sat around and had a beer

10 before we went off to our rooms. We also had the

11 following morning before we got on our plane and at some

12 point I believe Mr Kabatsi gave me his view on the --

13 what we are calling the Heritage issue.

14 MR QURESHI: So we will look at your witness statement

15 shortly. Are you saying that on the 18th in the evening

16 at some stage the Heritage issue was discussed with

17 Mr Kabatsi?

18 A. I can't say with certainty, Mr Qureshi.

19 MR JUSTICE BURTON: It would help me, before we get on to

20 what you discussed with Mr Kabatsi about the Heritage

21 issue, as to where the Heritage issue ended with the

22 President. As I understand it, certainly looking at the

23 documents we have, it formed a very small part of the

24 meeting with the President. So can you just summarise

25 for me in a few words the outcome, or indeed the whole

1 gamut, if you can, if it is only short, of what happened

2 with the President, which then led you to discuss it

3 afterwards with Mr Kabatsi?

4 A. It didn't take up very much time, the meeting with the

5 President. The main issue that came up with the

6 President is we were still trying to maintain the idea

7 that we should only put 283 on the table and this was

8 dismissed very quickly in that meeting, and we realised

9 that was a lost cause, so we'd agreed to put 313 on the

10 table in that meeting.

11 MR JUSTICE BURTON: And that was it?

12 A. That was it.

13 MR JUSTICE BURTON: You'd already agreed 283, it now has to

14 be 318, gulp, okay. Was there any discussion at all

15 about the President, such as you had had previously,

16 about the basis on which you would be paying?

17 A. I don't believe there was, my Lord.

18 MR JUSTICE BURTON: It was taken as a given that you were

19 going to be paying?

20 A. It was taken as a given that the URA position was the

21 one we'd have to follow. There were some people from

22 the URA jumping up and making their points quite

23 strongly to the President in the meeting.

24 MR JUSTICE BURTON: What do you mean?

25 A. In the sense that when I would try and explain to the

1 President why we only had 283, someone from the URA, I'm

2 not sure who, would stand up and say, "But it's 313,

3 Your Excellency, that they owe", and there was no real

4 getting into that discussion on our part. We weren't

5 given very much of an opportunity to put much of a case.

6 MR QURESHI: So what you are saying now is that it is

7 possible, but you can't be certain, that there was

8 a discussion with Mr Kabatsi on the evening of the 18th

9 about what I have characterised as the Heritage issue.

10 It is possible, but you can't be certain, there was

11 a discussion with Mr Kabatsi on the morning of the 19th

12 about the Heritage issue, yes?

13 A. That's right. What I can be certain of is it came up in

14 the post mortem discussions in our office.

15 Q. Late morning, the 19th. So help us, who started that

16 discussion?


18 Q. Maybe we can look at your witness statement at paragraph

19 199/200/201. Do you have it, Mr Martin?

20 A. Yes, I do.

21 Q. 199/200, this is a witness statement that you produced

22 on 9 November 2012, yes?

23 A. Yes.

24 Q. Not that long ago, four months ago, a witness statement

25 that you obviously looked at again very carefully

1 because you provided, very helpfully, some typographical

2 corrections, and you just told us that you couldn't

3 remember who started the discussion but perhaps your

4 memory can now be refreshed when you look at 199/200:

5 "Shortly after the meeting ..."

6 This is the Gulu meeting. Do you have it?

7 A. Yes.

8 Q. "... I discussed with KAA the prospect for success of

9 our judicial review proceedings."

10 That is the Kingfisher licence:

11 "Peter Kabatsi's view ..."

12 MR JUSTICE BURTON: We can read it. You don't need to read

13 it out. You have read it again. It says here that the

14 issue arose as a result of your discussing what

15 obviously was uppermost in your mind which was the

16 apparent intransigence in relation to the Kingfisher

17 licence and according to you that is how the

18 conversation with Mr Kabatsi started and it led on

19 apparently to the discussion about the 313. Is that

20 right?

21 A. That's right, my Lord.

22 MR QURESHI: So at paragraph 201, where you say, "I also

23 then asked Peter's view on whether the Ugandan courts

24 would consider Tullow to be in possession of an asset

25 belonging to Heritage for the purposes of section 108,

1 meaning the 27 July notice would be effective", that is

2 correct?

3 A. Yes, but I'm not sure if that --

4 MR JUSTICE BURTON: If that's what you say in your witness

5 statement, why didn't you remember that a few moments

6 ago when you were asked?

7 A. With respect, my Lord, I'm not --

8 MR JUSTICE BURTON: Is this a general attempt to give

9 a general picture or is this actually a recollection of

10 how it happened, A, B, C? It gives the impression here

11 that it was clear to you now -- obviously it is not --

12 it is quite a bit of time ago, but it all began with

13 a discussion between you and Kabatsi about the

14 Kingfisher licence and it moved on with you raising the

15 question of 108. But it is not long ago you said the

16 opposite, namely you couldn't remember. I say the

17 opposite. You said you couldn't remember who started

18 the conversation.

19 A. No, I maybe misunderstood Mr Qureshi's question, my

20 Lord. I thought he asked me who started the discussion

21 at our meeting in Kampala.

22 MR QURESHI: No, forgive me, that's not what I asked.

23 A. I am sorry then.

24 MR JUSTICE BURTON: Who started the discission? I see. You

25 thought he was talking about the post mortem discussion?

1 A. Yes, my Lord.

2 MR JUSTICE BURTON: You are dealing here with what had

3 happened either the night before or the morning before

4 the post mortem.

5 A. Yes.

6 MR JUSTICE BURTON: And you are saying all this happened

7 before the post mortem meeting?

8 A. That is my recollection, my Lord. In the --

9 MR JUSTICE BURTON: When you went into the post mortem

10 meeting, these conversations had already occurred

11 between you and Mr Kabatsi on your own and he'd

12 expressed the views which you have set out -- I don't

13 want you to look at them again for the moment -- at 201?

14 A. I'm not sure about the "on my own", my Lord. I'm not

15 sure if Mr Inch and others were also round me when we

16 were having that discussion.

17 MR JUSTICE BURTON: It wasn't at the post mortem meeting?

18 A. We discussed it again at the post mortem meeting.

19 MR JUSTICE BURTON: Of course, we are coming to that. But

20 you'd already had this provisional discussion before the

21 post mortem?

22 A. Yes, my Lord.

23 MR QURESHI: We see at paragraph 201 that you are the one

24 who -- you are emphatic that you asked Mr Kabatsi's view

25 on whether the Ugandan courts would consider Tullow to

1 be in possession of an asset belonging to Heritage, yes?

2 A. Yes.

3 MR JUSTICE BURTON: He didn't volunteer it? He didn't say:

4 "Oh, I sat there listening to the President and what

5 about this? This is the way out of your problem", or

6 whatever? It was you who asked him?

7 A. I believe it was, my Lord, yes.


9 MR QURESHI: Just help us: you have Mr Mpanga there, who has

10 already told you that there's no way that a court would

11 find that you are in possession of an asset, 27 August.

12 You have had advice from your own internal lawyers,

13 Mr Sloan -- very clear advice if I may say so,

14 consistent advice -- and you are asking Mr Kabatsi this

15 question. Can you help us understand why it is that you

16 were asking Mr Kabatsi this question in that context?

17 A. Well, we had just had the rather depressing view that

18 a Ugandan court would find against us in relation to

19 some of the other issues that we had and I sought to ask

20 the follow-on question: well how would they regard the

21 agency notices? It was a very depressing evening and

22 day.

23 MR JUSTICE BURTON: It is really the flip side of the coin:

24 if they are going to make a wrong decision on A, they

25 could make a wrong decision on B. Is this what you are

1 putting forward?

2 A. Along those lines, my Lord.

3 MR QURESHI: You then tell us:

4 "It was Mr Kabatsi's view, as Tullow was a signatory

5 to the escrow account, that the Ugandan court would find

6 that Tullow was in possession of an asset."

7 Now, your witness statement at paragraph 201 tells

8 us what Mr Kabatsi says, that:

9 "As Tullow was a signatory to the escrow account the

10 Ugandan court would find that Tullow was in possession

11 of an asset."

12 Just pause there. So far as you are aware, at this

13 point in time had Mr Kabatsi seen the escrow

14 arrangement?

15 A. I don't know if he had or not. I don't recall.

16 Q. If you don't recall -- this is what he said to you.

17 What did you ask him? Did you take the discussion any

18 further and say, "Peter, have you seen the escrow

19 account arrangement?"

20 A. I believe I can't have had a discussion about whether or

21 not we were in possession of an asset without at least

22 describing to him how the escrow arrangement worked or

23 understanding that he had already seen it. KAA

24 obviously had it. I don't know whether or not he would

25 have seen it as part of that.

1 Q. All right.

2 MR JUSTICE BURTON: But you didn't ask him?

3 A. What I'm trying to say, my Lord, is that if I'm having

4 discussions with Peter on whether or not we are deemed

5 to be in possession of an asset or in possession of an

6 asset, I must have described to him the background of

7 how the escrow worked or reached a conclusion he knew

8 how it worked anyway.

9 MR QURESHI: But we can't see that from your witness

10 statement.

11 A. No.

12 Q. Can we see from your witness statement whether it is the

13 case that you had asked Mr Kabatsi what he had seen

14 before providing you with this one-line opinion?

15 A. No.

16 Q. Can you tell us whether it is the case that you had

17 asked Mr Kabatsi to elaborate upon the opinion that as

18 Tullow was a signatory to the escrow account, the

19 Ugandan court would find that Tullow was in possession

20 of an asset?

21 A. I think I seem to recall forming the view that this

22 approach was so different from the advice we already had

23 from KAA that we should leave it until the next day and

24 we can get all the partners of KAA to give us their

25 views and let's just work out how this new advice fits

1 in.

2 Q. So you wanted to park it -- I won't say bank it. You

3 wanted to park it and -- is it fair -- to let KAA work

4 this through themselves the following day?

5 A. At least as part of the post mortem, let's put this on

6 the table and find out --

7 MR JUSTICE BURTON: When you say "the following day", you

8 are assuming or recollecting now that this conversation

9 was on the 18th?

10 MR QURESHI: The 19th, Friday.

11 MR JUSTICE BURTON: No, I think --

12 A. Evening of the 18th, morning of the 19th. We had plenty

13 of opportunity.

14 MR JUSTICE BURTON: When you say "the following day",

15 I think you are referring to the following day being the

16 post mortem meeting, is it?

17 A. I think these initial discussions with Mr Kabatsi were

18 coming out of the depressing meeting with the President

19 and his entourage or perhaps on the way to the hotel, in

20 the hotel the next morning.

21 MR JUSTICE BURTON: That is what I had understood because

22 I was asking you, when you talk about thrashing it out

23 with the other members of KAA the next day, you are

24 referring to the post mortem?

25 A. Yes, I am, my Lord.

1 MR QURESHI: Thank you, that is very helpful. So now let us

2 go to the next day which is 19 November. You accept

3 that paragraph 201 of your witness statement on a fair

4 reading does not suggest that there was a meeting or

5 a discussion on 18 November, does it?

6 A. I don't think it's clear one way or another when that

7 discussion was.

8 MR JUSTICE BURTON: Go back to 199:

9 "Shortly after the meeting I discussed with KAA the

10 prospect for success."

11 What you are saying is "shortly after the meeting"

12 means either that evening in the hotel or possibly the

13 next morning and when it says "I discussed with KAA",

14 you mean "I discussed with Mr Kabatsi"?

15 A. Yes, Mr Kabatsi, but we would have discussed it with the

16 others as well, my Lord. We were all milling around and

17 getting on a bus together.

18 MR QURESHI: Just to be clear, 199/200/201, which part of

19 199/200/201 are we to read as relating to the night

20 before?

21 MR JUSTICE BURTON: Or the early morning?

22 MR QURESHI: Or the morning after?

23 A. I think what I'm doing here is condensing all the

24 discussions.

25 MR JUSTICE BURTON: You are condensing the pre-post mortem

1 discussions, or all the discussions including the

2 post mortem discussion?

3 A. We left the meeting with the President, my Lord, quite

4 late at night. We did have an opportunity to discuss

5 things among ourselves. We had left in a very depressed

6 mood, so nobody was in for long and detailed discussions

7 but we must have had some discussions and we left the

8 substantive discussions for the post mortem the

9 following day.

10 MR QURESHI: Just to be clear, the night before, you are

11 milling around in a bus and you are looking for a hotel,

12 you have a discussion with Mr Kabatsi. If I am

13 mischaracterising please tell me because it is important

14 that this is characterised fairly and accurately. And

15 when you have the discussion with Mr Kabatsi about the

16 Heritage issue is there anybody else there from KAA,

17 Mr Mpanga, for example?

18 A. I don't recall now.

19 MR JUSTICE BURTON: So when you said to me ten minutes ago

20 or so that you had this discussion with Mr Kabatsi and

21 then, in Mr Qureshi's words, you wanted to park it to

22 let KAA work this through themselves the following day

23 and you said: "At least as part of the post mortem,

24 let's put this on the table", do I understand you to be

25 saying -- whether there were other people within earshot

1 doesn't matter terribly -- your conversation with

2 Mr Kabatsi when he indicated what we have been

3 discussing about his view, which was just the two of you

4 largely, and you left it there and you would want to

5 take it through with the other members of KAA, then, as

6 I understand it, we are now moving on to the post mortem

7 and you are going to be asked questions about whether

8 anything was discussed about this at the post mortem and

9 if so whether it was with other members of KAA as well

10 as with Mr Kabatsi?

11 A. It was at the post mortem, my Lord. Whether or not

12 there were people in the discussions we were having when

13 we were moving from one room to another or on to a bus

14 and into the hotel, I don't recall.

15 MR JUSTICE BURTON: We have dealt with that now. 199 to

16 201, as I understand it, is your summary of what

17 happened in the basically one-to-one conversations,

18 either that night or the next morning, and it was parked

19 as a result of that and you were expecting him or

20 expecting yourself to thrash it out with the other

21 members of KAA the next day, by which you mean the

22 post mortem meeting?

23 A. Yes, my Lord.

24 MR JUSTICE BURTON: So let us get to the post mortem meeting

25 and see what thrashing out was done.

1 MR QURESHI: Mr Martin, let us then come back to 201. Can

2 you identify within 201 or 202 where it is that you

3 refer to KAA thrashing it out amongst themselves in

4 their offices?

5 A. With respect, I don't think I used the words "thrashing

6 out".

7 MR JUSTICE BURTON: No, Mr Qureshi did, but I thought you'd

8 agreed with it. I thought where we had got to is you

9 had had a preliminary discussion with Mr Kabatsi, it was

10 parked -- again, that was Mr Qureshi's words -- and you

11 were going to discuss it again with the other members of

12 the KAA. What you are being asked about is where is

13 there mention in your witness statement of any

14 discussion, which you are no doubt about to tell us

15 about, with the other members of KAA in which

16 Mr Kabatsi's overnight, off the top of his head opinion

17 was further discussed?

18 A. It's not in here, my Lord. I'm -- I'm obviously happy

19 to give the flavour of it.

20 MR JUSTICE BURTON: Was there any such discussion?

21 A. There was at the post mortem meeting, yes.

22 MR JUSTICE BURTON: Perhaps you should tell us about it.

23 MR QURESHI: In your own words.

24 A. The issue, it wasn't the most important issue for us at

25 the time. There were far bigger issues in terms of the

1 package of proposals as they evolved. When this issue

2 came up, it was clear that Mr Kabatsi was at odds, in

3 his understanding of whether or not the agency notices

4 were valid, with the other members of the KAA team,

5 Mr Mpanga and Mr Kambona. I seem to recall that

6 Mr Karuhanga was slightly on the side of Mr Kabatsi but

7 that's just my recollection now from the meeting, and

8 from that we said to Mr Kabatsi could we have this issue

9 confirmed in an opinion, along with all the other issues

10 which were frankly far more important to us at the time.

11 MR QURESHI: So you have a discussion, Mr Kabatsi,

12 Mr Karuhanga onside, offside, I'm not sure, in the room

13 anyway?

14 A. Yes.

15 Q. And Mr Mpanga, so this discussion is taking place, an

16 exchange of views?

17 A. Yes.

18 Q. Reference to Mr Mpanga's 27 August advice?

19 A. I don't know if there was specific reference to it but

20 we were clear as to the earlier advice we had received.

21 Q. Do you recall whether or not anybody said, "Peter, what

22 about what David Mpanga said on 27 August?"

23 MR JUSTICE BURTON: David was there, wasn't he?

24 A. He was at the meeting and he was well able to express

25 his views. It was, I do recall it -- not embarrassing

1 but it's a bit embarrassing when a couple of partners in

2 the firm are taking a different view from the others.

3 MR JUSTICE BURTON: Mr Kambona, Mr Mpanga and Mr Matsiko had

4 all opined the other way?

5 A. Yes.

6 MR JUSTICE BURTON: All three of them were there?

7 A. I don't remember if Mr Matsiko was in the room.

8 MR JUSTICE BURTON: Certainly Mr Kambona was there, and you

9 say they were at odds with Mr Kabatsi?

10 A. Yes, in a very polite way as they argue these things.

11 MR QURESHI: Just help us in terms of -- I am not trying to

12 understand the level of politeness -- your witness

13 statement identifies this as a critical turning point,

14 yes?

15 A. Yes.

16 Q. I am just trying to understand what the content of this

17 turning point is. And you are saying there is

18 a discussion, you have the entire KAA team at your

19 disposal, you have had previous consistent, clear,

20 unequivocal advice from KAA and you are saying there is

21 a polite discussion taking place. Was there any

22 reference to Mr Kabatsi having seen the agency notices?

23 A. I don't recall specifically. I am presuming he must

24 have done but I don't recall a discussion around that.

25 The discussion would have gone on on the basis that

1 everyone in the discussion was familiar with the facts.

2 Q. And you are saying that equally, the discussion would

3 have gone on on the basis that Mr Kabatsi was familiar

4 with the escrow arrangement, escrow agreement as well?

5 A. I believe so. If he had had any questions on it, it

6 would have been an ideal opportunity for any one of us

7 to explain how we felt it operated.

8 Q. Did he have any questions?

9 A. I don't recall now. I just recall the thrust of the

10 discussion, which I don't think was a very long

11 discussion. There were plenty of other things to talk

12 about.

13 Q. Did you have any -- you had parked it the night before

14 because you wanted this, what I have described as

15 a "thrashing out", a meeting of collective minds within

16 KAA to work out the distillation of their position,

17 given that you had had diametrically opposite advice

18 from the remainder of the KAA team. Just pausing there,

19 had Mr Karuhanga opined by this point on the Heritage

20 issue so far as you can recall?

21 A. I don't recall. I recall him being part of that

22 discussion. My recollection was he was more on the

23 Peter Kabatsi side, but that's just my recollection.

24 I recollect a split camp within the firm and a slight

25 deference to the elder, more experienced lawyers.

1 Q. But you can't recall whether or not Mr Karuhanga himself

2 gave any advice or expressed a view?

3 A. No, as I have said, I think he inclined to Mr Kabatsi's

4 view but equally, earlier I think he had inclined to the

5 previous view, so that was a bit confusing.

6 Q. You yourself don't recall probing, enquiring or testing

7 Mr Kabatsi's position?

8 A. No, we agreed that he or the firm would confirm that

9 along with all the other issues we'd asked him to

10 confirm. There were half a dozen issues we needed

11 a slightly more detailed --

12 MR JUSTICE BURTON: Was there any discussion, either in the

13 pre-post mortem meeting or the post mortem meeting

14 itself, about the other aspect of the 108 position,

15 namely whether the tax was payable?

16 A. I don't recall, my Lord.

17 MR QURESHI: Let us not forget, as his Lordship has very

18 helpfully reminded us, there were essentially two points

19 with regards to the section 108 notice. One it didn't

20 bite, because no tax was payable, not due because it had

21 been disputed; and the second was whether or not you

22 were in possession of an asset. And on both points the

23 answer was clearly and emphatically "no" hitherto, yes?

24 A. That's right.

25 Q. But in any event, there is no probing or challenging or

1 questioning or seeking of clarification from you with

2 regards to Mr Kabatsi?

3 A. As I have said, I have tried to make clear it wasn't --

4 we didn't feel it was the most important issue on the

5 table. It was important but there were a lot of other

6 issues to talk about and get clarity on and I can't say

7 now how long the discussion took and there was clearly

8 some embarrassment that the firm were not able to give

9 a consistent view to us at that point.

10 Q. So what were you looking for on the Heritage issue once

11 this discussion had taken place from KAA?

12 A. Confirmation of Mr Kabatsi's view.

13 Q. Confirmation of his view?

14 A. An opinion on the validity of the notices.

15 Q. From whom?

16 A. I think we'd asked for it from Mr Kabatsi.

17 Q. Had any other names been mentioned for such an opinion,

18 Mr Mpanga, Mr Kambona?

19 A. Obviously the opinion we did get came from the late

20 Justice Mulenga as well. I can't remember. It

21 certainly wouldn't have been our idea to suggest that.

22 It must have been the firm's idea to confer with him to

23 come to a view.

24 Q. I wasn't asking about the late retired Justice Mulenga.

25 I was asking you about the people who were present

1 within the room, namely -- unless you are telling me

2 that the retired late Justice Mulenga appeared during

3 the 19th or soon thereafter?

4 A. No.

5 Q. Did you meet him at any point in your dealings with KAA?

6 A. I have a memory of -- well, I was introduced as a matter

7 of courtesy to all of the partners who were in the

8 office at one point and consultants, and I have a memory

9 of meeting various retired practitioners and I think

10 maybe I did meet Justice Mulenga. I couldn't say with

11 certainty now that that's who it was. This was quite a

12 few months before.

13 Q. Well before this issue arose?

14 A. Yes.

15 Q. But certainly not in the context of the provision of the

16 advice we will come to shortly?

17 A. No.

18 Q. So we have this discussion taking place within your

19 offices, Mr Mpanga, Mr Kambona and Mr Matsiko are there?

20 A. I'm not sure about Joseph, but ...

21 Q. All right, Mr Kambona and Mr Mpanga are both there?

22 A. Yes.

23 Q. They are the ones who provided you with very clear

24 opinions, and let us not forget Mr Mpanga was head of

25 legal services at PricewaterhouseCoopers for Uganda, and

1 Mr Kambona was a specialist in the field of tax and

2 revenue, legal assistant to the head of legal services,

3 Ugandan Revenue Authority, legal adviser to the

4 Commissioner General of the URA and a consultant to the

5 Tax Appeal Tribunals.

6 MR JUSTICE BURTON: How old were they, in terms of

7 comparison with Mr Kabatsi?

8 A. Oscar I've always thought of as very young, David a bit

9 older. I'm going to do them an injustice here. I would

10 say Oscar late 30s/early 40s, David mid 40s.

11 MR JUSTICE BURTON: And Kabatsi, well we'll see him.

12 A. You'll meet Mr Kabatsi.

13 MR JUSTICE BURTON: He's much older, is he?

14 A. Yes.

15 MR QURESHI: Would it help if we see -- to help Mr Martin's

16 memory at tab 5 we have extracts from the KAA website.

17 MR JUSTICE BURTON: Yes. This is your skeleton?

18 MR QURESHI: Yes.

19 MR JUSTICE BURTON: It doesn't have ages as far as

20 I recollect. But we can work it out from an educational

21 background.

22 A. I'm told I don't have that, Mr Qureshi.

23 MR QURESHI: We are about to hand it up. (Handed).

24 The first picture, a serious looking gentleman,

25 Mr Mpanga:

1 "David has over ten years' professional experience

2 in legally advisory consulting in East Africa. Prior to

3 joining" --

4 MR JUSTICE BURTON: I am looking at his educational

5 background on the next page and if he got his degree in

6 1994, I would think he was about 22 or so then, so that

7 makes him in his 40s, and Kambona is actually the same

8 age because he also got a degree the same year.

9 A. It looks like it. I'm giving Oscar the credit for

10 looking younger.

11 MR JUSTICE BURTON: Matsiko looks as though he's a couple of

12 years older and Mr Kabatsi is actually not that much

13 older. Unless he went to university late, he got his --

14 or am I right? No, no, of course, 20 years older. So

15 he's 60 and they're 40.

16 A. Roughly, my Lord.

17 MR JUSTICE BURTON: Mr Karuhanga is also 60.

18 A. Yes.


20 MR QURESHI: Given that Mr Mpanga was in the room,

21 Mr Kambona was in the room, possibly Mr Matsiko was in

22 the room --

23 MR JUSTICE BURTON: I don't know if we have a photograph.

24 MR QURESHI: Possibly. If you were looking for

25 a comprehensive opinion from KAA, it would have made

1 sense for Mr Mpanga and Mr Kambona to have signed off on

2 such an opinion, wouldn't it?

3 A. I don't recollect how it came about that the opinion

4 came from Peter Kabatsi and the late Justice Mulenga.

5 David and Oscar had previously opined on a lot of these

6 issues and it might seem appropriate to us to get fresh

7 views. I don't recall. But when we ask for an opinion

8 from the firm we are not specifically asking for it to

9 be signed by any one particular partner.

10 Q. Am I understanding you correctly, that after Mr Kabatsi

11 has opined at least once, if not twice, KAA are asked to

12 produce an opinion, by you?

13 A. I believe it would have been, yes.

14 Q. But you don't specify who within KAA should produce the

15 opinion?

16 A. I don't recall specifying that, no.

17 Q. Mr Kabatsi's views as expressed on 19 November were, you

18 say, within the context of a meeting where you had lots

19 to consider but you say at paragraph 12 of your witness

20 statement and again at paragraph 17 and again at 191:

21 "However, as I explain in this statement [12] we

22 received legal advice shortly after a meeting with the

23 Government on 18 November from Peter Kabatsi, the head

24 of litigation, a former Solicitor General and Director

25 of Public Prosecutions of Uganda. This advice changed

1 our assessment."

2 At paragraph 17, you say:

3 "However, whilst we accept that Tullow clearly had

4 commercial motivations for making the payment to

5 Government, there was also in any event a legal

6 obligation. Although our initial assessment of 27 July

7 notice did not bind Tullow, the advice we received from

8 Peter Kabatsi shortly after 18 November changed our

9 assessment."

10 And it is the same point that you make at

11 paragraph 191.

12 MR JUSTICE BURTON: A fundamental change in their thinking?

13 MR QURESHI: Yes, it is Peter Kabatsi, Peter Kabatsi and

14 Peter Kabatsi. It is not KAA, is it?

15 A. Yes, it was Peter Kabatsi who was a partner of KAA.

16 Sorry, I am missing the point you are making. Yes, it

17 was Peter Kabatsi.

18 Q. And it was a fundamental change of thinking and this was

19 after the meeting on 18 November -- this wasn't the

20 discussion in the evening of the 18th November, this is

21 the meeting in your offices, yes?

22 A. Yes.

23 MR JUSTICE BURTON: Because he repeated it; is that right?

24 A. He was repeating at the meeting in our offices what

25 I had heard him say the night before, yes.

1 MR QURESHI: This fundamental change in your thinking,

2 because it was fundamental was a highly significant

3 factor, yes?

4 A. Yes.

5 Q. Can I ask you to look at E17/4649, please. The type is

6 rather small, my Lord. Mr Martin has a magnifying

7 glass. Unfortunately it seems I need one as well but

8 I don't have one. Do you see this, Mr Martin?

9 A. Yes.

10 Q. This is an email from you sent at about 1 o'clock,

11 "Uganda update". Just read it and help us if you can.

12 Where is there a reference to this advice of Mr Kabatsi

13 which provides the fundamental change of thinking, the

14 turning point as it has been described?

15 A. I don't think I cover it in this note to the board.

16 I think, as I said earlier, that issue was not the most

17 upper -- it wasn't uppermost in our mind at that stage.

18 Q. You didn't cover it in this note to the board?

19 MR JUSTICE BURTON: Paragraph 1 records that aspect of the

20 package, that you are now going to be paying 313.

21 A. Yes.

22 MR QURESHI: The penultimate paragraph:

23 "Obviously if we are to consider accepting any such

24 or similar solution there are a lot of other points we

25 would insist on being clarified or nailed down, such as

1 the GOU continuing to fight Heritage and our rights to

2 recover the 283 million if they lose. While there was

3 no opportunity to air those yesterday, they would need

4 to be addressed at the MOU stage.

5 "More flavour will be given in our next conference

6 call."

7 If you had a conference call, just to be clear, my

8 friend can correct me if I am mistaken, but we have no

9 documentation evidencing any conference call with the

10 board or any note to the board subsequent to this which

11 identifies Mr Kabatsi's sea change point of view; do you

12 agree?

13 A. Yes.

14 MR JUSTICE BURTON: What does it mean, "there were a lot of

15 other points we would insist on being clarified or

16 nailed down"? Nailed down by whom?

17 A. Between ourselves and the Government in the MOU,

18 my Lord. I was just giving an overview of the issues

19 which we thought were in the package.

20 MR JUSTICE BURTON: The position still remained that you

21 would be reliant on the Government establishing that the

22 tax was due?

23 A. Yes, my Lord.

24 MR JUSTICE BURTON: Not establishing the entitlement to

25 claim the tax from you under the 108 notice?

1 A. I think I was just saying that this was just the outline

2 of a package, my Lord. The detail would have to be

3 thrashed out in an MOU.

4 MR QURESHI: Was there a conference call with the board?


6 Q. When would the next conference call have taken place,

7 because you refer to it?

8 A. I don't recall. If there was an official conference

9 call with the board there would have been a minute to

10 that effect.

11 MR JUSTICE BURTON: The first paragraph refers to there

12 being one on Monday. I don't know whether we have seen

13 minutes of that, have we?

14 MR QURESHI: No. We haven't seen any minutes of that.

15 MR JUSTICE BURTON: So it looks as though there were regular

16 conference calls, or at any rate not irregular ones.

17 A. Yes, my Lord.

18 MR JUSTICE BURTON: Did they always have minutes?

19 A. Invariably -- well, they do. Quite a few of the

20 conference calls around that time were very sparsely

21 attended. We were just keeping up-to-date those who

22 were available to attend the call. I'm surprised that

23 there are not minutes available if it was a full

24 conference call.

25 MR QURESHI: We haven't been provided with them. My friend,

1 no doubt with his able assistance, will correct me if

2 I have made a mistake and I will of course apologise if

3 we have received them.

4 MR JUSTICE BURTON: You have seen minutes of conference

5 calls, have you? I don't mean this one. This is

6 a fairly regular thing to have minutes of conference

7 calls?

8 A. Yes, they are, my Lord, and we provided all of the

9 documentation available to the other side.

10 MR JUSTICE BURTON: So there ought to be minutes of the

11 conference call in the first paragraph and if the

12 conference call in the last paragraph took place there

13 ought to be minutes of that?

14 A. There should have been. The trouble with quite a few of

15 these is that I would generally be the one taking the

16 minutes and I wasn't -- because I was stuck in Gulu or

17 wherever else I wasn't always around to minute the

18 calls.

19 MR QURESHI: Forgive me, this is a FTSE 100 company,

20 correct?

21 A. Yes.

22 Q. Which has obligations to shareholders?

23 A. Yes.

24 Q. Not just yourself?

25 A. Yes.

1 Q. And you understand your responsibilities as the general

2 secretary and general counsel?

3 A. Yes.

4 Q. And if you are the minute-taker for board meetings you

5 understand what your responsibilities are?

6 A. Yes.

7 Q. Let us forget about your responsibilities as general

8 counsel and as a solicitor of the Supreme Court of

9 England and Wales, you are telling his Lordship that

10 when you are assuming responsibility for taking minutes

11 of board meetings, those minutes may not have been taken

12 and/or those minutes may in fact have been destroyed, is

13 that right?

14 A. No, board minutes would not have been destroyed,

15 Mr Qureshi. I'm -- first of all, "More flavour will be

16 given in our next conference call", perhaps that didn't

17 take place. I don't recall, and in the first line,

18 "shortly after the board conference call update",

19 I don't recall who might have been on that. It might

20 have been very short. I just don't know. But if it had

21 been an official board conference call, minutes should

22 have been taken but had they been taken they would have

23 been provided as part of this litigation.

24 Q. But they should have been taken by you?

25 A. If I was on the call, and I missed quite a few because

1 of being stuck.

2 Q. All right, but somebody would have taken the minutes?

3 A. Somebody should have taken the minutes, yes.

4 Q. Could I ask you to look at 4661, please. Does

5 my Lord have this?

6 MR JUSTICE BURTON: 4661?

7 MR QURESHI: Yes.


9 MR QURESHI: Monday, 22 November, so we have had Friday

10 afternoon, we have had the weekend, and we have had the

11 entirety of Monday. Monday evening, this is sent

12 directly to Mr Bitature and copied to Mr O'Hanlon,

13 Mr Inch, Mr Mpanga, Mr Kambona and Mr Kabatsi. Do you

14 see that?

15 A. Yes.

16 Q. "Gulu meetings. Gulu meetings notes version 3."

17 My Lord, I am not sure whether we received versions

18 1 and 2 but if we did no doubt Messrs Ashurst can

19 confirm that.

20 "Patrick, further to our conversation ..."

21 Which presupposes a conversation took place

22 I assume?

23 A. It must have done, yes.

24 Q. "... I attach my record of what I think was agreed at

25 Gulu, to which I have added some of the related explicit

1 and implicit agreements.

2 "Please let me have your thoughts.

3 "All the best."

4 Over the page:

5 "Tullow's understanding of the 'package' ..."

6 Why is "package" in inverted commas?

7 A. That was a word that was used at the Gulu meeting. I'm

8 not sure who first used it but it became an accepted

9 term. It is one of these positions where I think nobody

10 wants to concede one point unless it's understood that

11 the whole package is agreed.

12 Q. All right. The first point is, apart from the honest

13 broker, as you described Mr Bitature, all of the other

14 people are, forgive me for saying this, part of the

15 Tullow entourage that went to Gulu, aren't they?

16 A. Yes.

17 Q. So we have Tullow's understanding of the package of

18 agreed points and actions from meetings of

19 18 November 2010, yes?

20 A. Yes.

21 Q. Bullet point 1:

22 "Payments to Government -- 328 million.

23 "Tullow will make the following payments to

24 Government:

25 "283.5 million and 30 million on account of the

1 Heritage tax assessments. This will be paid within 10

2 working days after signing the Total and CNOOC

3 agreements; and

4 "14.5 million as stamp duty ...

5 "Additional agreements to give effect to the above:

6 "The Government will give consent to Tullow's sale

7 of 33.33 per cent ..."

8 The next bullet point:

9 "The Government and Tullow knowledge that in making

10 such payments Tullow is deemed to be acting under the

11 authority of the URA agency notice."

12 There is that word again, "deemed", Mr Kambona's

13 whizz idea?

14 A. Mr Mpanga.

15 Q. Mr Mpanga, forgive me, yes, let us not confuse Mr Mpanga

16 with Mr Kambona:

17 "... deemed to be acting under the authority of the

18 URA agency notice which involves certain mutual rights,

19 obligations and indemnities; and

20 "Government and Tullow will work actively together

21 to ensure all available contractual and legal procedures

22 are followed to collect all tax due from Heritage in

23 accordance with the laws of Uganda."

24 Bullet points on tax assessments, development master

25 plan, Kingfisher, exploration area 3, exploration area

1 1.

2 Can you help me? Where in this note of actions from

3 Gulu meetings of 18 November, which was sent internally,

4 the day before the honest broker, is there any reference

5 to there being an opinion provided by Mr Kabatsi on 18

6 or 19 November concerning the possession of the assets

7 point?

8 A. This paper was prepared to make sure everyone was

9 aligned on what we had understood the outcome of the

10 meeting with the Government side was. It wasn't

11 intended to cover any internal opinions or issues that

12 we might have had. This was going to form the basis of

13 an MOU with the Government, we hoped.

14 MR QURESHI: My Lord, is that a convenient moment to break?

15 MR JUSTICE BURTON: No, I think we'll go on until quarter to

16 12, thank you.

17 MR QURESHI: Of course, this is produced on 22 November, it

18 seems, or certainly circulated on 22 November and

19 Mr Kabatsi has already opined on 18 November briefly, on

20 19 November in committee, that you will be considered by

21 a Ugandan court to be in possession of the asset, namely

22 the escrow account, yes?

23 A. Yes.

24 Q. Once you have had this opinion, which provides the

25 fundamental change in your thinking, why do you have the

1 language in the bullet point:

2 "The Government and Tullow acknowledge that in

3 making such payments Tullow is deemed to be acting under

4 the authority of the agency notice"?

5 What is the need for the language and the use of the

6 word "deemed"?

7 A. I think I was just using a shorthand way of referring

8 back to this, the deeming the escrow account to be in

9 our possession.

10 MR JUSTICE BURTON: Of course you were. But what counsel is

11 asking you is why were you still doing that when you, if

12 Mr Kabatsi was right, didn't need to have the deeming

13 fiction any more because you would be acting under the

14 basis of a valid notice on the basis, of course if

15 Mr Kabatsi's advice was right at the moment, he was at

16 odds with his partners. But the question you are being

17 asked really is why you were still sticking to the

18 deeming.

19 A. Because I believe, my Lord, we weren't physically in

20 possession of this asset so we had to be deemed to be in

21 possession. It wasn't a physical object we had in our

22 hands or we weren't in control of a ship, for example,

23 it was we were -- we believed the advice was that we

24 would, by a Ugandan court would have been deemed to be

25 in possession of that escrow account.

1 MR JUSTICE BURTON: Was "deemed" used in this conversation?

2 You said they were at odds. Can you remember whether

3 Mr Mpanga mentioned his deeming proposal in his

4 discussion with Mr Kabatsi or not?

5 A. It was an issue that was being discussed amongst us all

6 at the time so I can only assume --

7 MR JUSTICE BURTON: Yes, but I am talking about the meeting

8 when Mr Kabatsi and Mr Mpanga and Mr Kambona appeared to

9 be at odds.

10 A. I can't specifically recall, my Lord. The phrase was

11 used a lot, so I presume it came up in that meeting.

12 MR QURESHI: Just help me in terms of understanding this.

13 Mr Kambona advances the fiction, 19/20 October, of

14 deeming to be in possession, yes?

15 A. Yes, Mr Mpanga it was, but, yes.

16 Q. Forgive me, Mr Mpanga. Then on 18/19 November

17 Mr Kabatsi makes it clear to you that there is no need

18 for a fiction because the reality is that the Ugandan

19 court, for reasons which we will shortly explore, would

20 find that you were in possession. So what I am

21 struggling with, and I hope you can help me, is why

22 still use the word "deemed"?

23 MR JUSTICE BURTON: I think he has said that he was advised

24 or he had understood the advice was that the Ugandan

25 court would deem them to be in possession.

1 That is what you say, is that right?

2 A. Yes.

3 MR JUSTICE BURTON: So whatever may have been a fiction,

4 even if it is a fiction it is a fiction which would

5 apparently be acceptable, Mr Kabatsi thought, to the

6 Ugandan court. Is that what you understood?


8 MR QURESHI: 4763, please. Mr Martin, do you see 4763 is an

9 email from you a week after the meeting in your offices

10 in Uganda?

11 A. Yes.

12 Q. "Uganda update. Gulu meeting notes.

13 "Could I suggest the Execs give an update to the

14 board at 5 pm on Monday 29th by conference call."

15 You have the dial-in details.

16 "Should anyone not be able to dial in at that time,

17 I can give separate updates as required.

18 "In the meantime I attach my note of the agreements

19 and actions from the Gulu meetings which I sent to the

20 Government team. I have had no response to this from

21 them.

22 "We are due to respond to the Government's 'package

23 proposal' before close of business on Thursday,

24 2 December and I have meetings lined up next week with

25 COOO ..."

1 Who is that?

2 A. CNOOC, it should have been.

3 Q. The Chinese National Oil Corporation?

4 A. Yes.

5 Q. "... on Monday and Total on Wednesday."

6 And over the page we have the understanding of the

7 package.

8 The first point, can you help us whether the

9 conference call actually took place on the 29th?

10 A. I can't. This was the 26th. I don't recall if it did

11 or not.

12 MR JUSTICE BURTON: If it did, is this going to be the one

13 that was mentioned at which the further flavour would be

14 given or is this yet another one?

15 A. The timings would suggest it might be, my Lord, but

16 these things were arranged ad hoc just because of the

17 speed at which things were moving.

18 MR QURESHI: Over the page we have the same text again.

19 I apologise for asking this question once more, but it

20 is a slight variation. 4764, under "Additional

21 agreements to give effect to the above", the second

22 bullet point:

23 "The Government and Tullow acknowledge that in

24 making such payments Tullow is deemed to be acting under

25 the authority of the URA agency notice ..."

1 Just to be clear, what exactly are you saying there:

2 Tullow is deemed to be acting under the authority of the

3 URA agency notice"?

4 A. I think there's the same paper as before, isn't it?

5 Q. Yes, I know, but we have already talked about deeming of

6 possession, deeming in fiction, deeming by the court.

7 But this is just to clarify?

8 A. I don't think it was -- this was for the Government's

9 attention, this whole paper. We were trying to make

10 sure we were at least aligned on the package for the

11 drafting and on reflection it wasn't very well phrased.

12 Q. But this was not just for the Government as they

13 mention. This was for the board, the decision-makers

14 within Tullow, the board that ultimately have

15 responsibilities to the shareholders, yes?

16 A. Yes.

17 Q. Are you saying that this was sloppily drafted?

18 A. No, I'm not. I'm just saying it wasn't drafted as

19 a legal document. It was drafted in a note form and as

20 I read it now, it could have been better phrased,

21 probably. It was just trying to make sure we had nailed

22 down some of the key issues so we can get on with the

23 detailed drafting.

24 Q. But you yourself are just saying that it's at best

25 inelegantly drafted, so what key issue, when you send

1 this to the reader does it suggest that you have nailed

2 down where you say "The Government and Tullow

3 acknowledge that Tullow is deemed to be acting under the

4 authority of the URA agency notice", what is the key

5 issue which is nailed down there?

6 A. We are accepting that we would be making this payment

7 under the authority of the agency notice.

8 Q. Right. Could I ask you, please, next to turn to 4766.

9 We see at the bottom of the chain at 4766 is your email

10 about: "Let's have a con call." Does my Lord see it?

11 MR JUSTICE BURTON: Yes, yes.

12 MR QURESHI: Then we have above that Clare Spottiswoode.

13 Who is that?

14 A. She was a non-executive director at the time of Tullow.

15 Q. "Can I have an email update, please?"

16 And then you respond:

17 "I'll certainly give you an update next week."

18 That is on the 28th. And then on the 29th, she is

19 saying she's back Saturday morning. You email her:

20 "With the board meeting on Tuesday the 7th, it might

21 be as well to wait until then for an update but of

22 course I'll let you know of anything material before

23 then."

24 Now, this would suggest that a con call took place

25 on the Monday, wouldn't it?

1 A. Yes.

2 Q. And it would suggest that there was a board meeting on

3 Tuesday, 7 December as well, wouldn't it?

4 A. Yes.

5 Q. "We have meetings this week with CNOOC and Total and are

6 due to respond to the Government on Thursday. At the

7 moment the Execs are inclined ..."

8 Who were the Execs?

9 A. The five executives of Tullow.

10 Q. If you say that they are included to accept a Government

11 package proposal which you have summarised, is it a fair

12 inference to draw that you would have said that after

13 you had spoken to them?

14 MR JUSTICE BURTON: Or had the conference call?

15 MR QURESHI: Yes.

16 A. I would have somehow or other have had discussions with

17 each of the Execs or perhaps heard from the chief

18 executive that everyone was agreed or --

19 Q. So you could have spoken to them individually or in the

20 conference call or exchanged emails?

21 A. Yes.

22 Q. The chief executive could have told you: "Everyone else

23 is in agreement"?

24 A. Everyone --

25 Q. Or you could have had the conference call?

1 A. There are only four other Execs, it is not difficult to

2 ascertain their views.

3 Q. "We feel that the critical matter at the moment is

4 reducing our basin interest to 33.33 per cent."

5 What is that?

6 A. We were inclined to accept the package because we were

7 sitting on 100 per cent of the assets, paying

8 100 per cent of the costs, and much as we didn't like

9 some aspects of the so-called "package" we felt the

10 critical matter is getting the farmout done, the sales

11 done, to CNOOC and Total. So we sell two-thirds and

12 retain one-third, reduce our exposure.

13 Q. Could I ask you, please, next to turn to 4786?

14 MR JUSTICE BURTON: Shall we break now?

15 MR QURESHI: My Lord, yes.

16 (11.43 am)

17 (A short break)

18 (11.53 am)

19 MR QURESHI: Mr Martin, if we could look at the document at

20 E17/4786, please.

21 A. Yes.

22 Q. It is a two-page email with some drafts which we will

23 get to in a second. It is from you. Does my Lord have

24 it? E17/4786. Do you have it, Mr Martin?

25 A. I have it, yes.

1 Q. It is an email from you, Wednesday, 1 December 2010,

2 5.37, to Patrick Bitature, Elly Karuhanga, Tim O'Hanlon,

3 "Letter to Onek". Onek being, of course, Minister Onek?

4 A. Yes.

5 Q. The Minister for Energy and Minerals.

6 "Patrick, Elly, as you know Aidan is meeting Total

7 in Paris this evening ...(Reading to the words)...

8 I would appreciate your thoughts.

9 "We also plan on attaching the attached draft MOU

10 and consent letter as it was a condition of our board's

11 acceptance of our invidious position that we put down

12 a form of words which would translate the 'package' into

13 acceptable wording."

14 The first point, the reference to board's acceptance

15 would presuppose that a meeting took place or some

16 discussion took place?

17 A. It would suggest that, yes.

18 Q. The fact that a condition is stipulated would suggest

19 that at this meeting there was discussion of the

20 Heritage issue in the overall translation of Gulu and

21 that the board was expressing a very clear view because

22 you say it is a condition, yes?

23 A. Yes.

24 Q. And what do you mean by an invidious position?

25 A. I think just the position we had been put in in terms of

1 the package. We seemed to be losing out on certain

2 rights every time we met the Government.

3 Q. The draft letter is at 4788/4789 and behind it is the

4 appendix?

5 A. Yes.

6 Q. The document that we were looking at earlier?

7 A. Yes.

8 Q. If we just look at the draft letter, "Gulu meeting

9 package proposal", we can see that the letter in fact is

10 signed off on 2 December, 4809. Do you see that?

11 A. Yes.

12 Q. The next day?

13 A. Yes.

14 Q. And if we look at 4810, it is signed by you?

15 A. Yes.

16 Q. Just help us. We have seen a letter signed by

17 Mr O'Hanlon, we have seen letters signed by Mr Heavey.

18 Is there any particular reason why the general counsel,

19 which is you, would sign off on this letter?

20 A. We would generally have Mr Heavey sign off to the

21 President, or Mr O'Hanlon. I would deal with the

22 Ministry of Energy but there were no rules, it was

23 whatever seemed appropriate at the time.

24 Q. Would it be fair to say that it was appropriate at this

25 time for you as the general counsel to write to Mr Onek

1 because the letter is providing confirmation of the

2 acceptance of the package and ultimately there are

3 a great many legal issues which are a part of that

4 package and you, as the general counsel, are probably in

5 the best place possible to signify the acceptance of

6 Tullow, is that right?

7 A. Yes, that is a fair assumption.

8 Q. Then let us look at the letter, 2 December, "Gulu

9 meeting package proposal". It is a two-page letter.

10 Did you draft this?

11 A. Yes.

12 Q. "Further to our constructive meetings in Gulu two weeks

13 ago chaired by His Excellency the President, we would

14 like to take this opportunity to respond formally to

15 respond formally to the package proposal that was

16 offered to us at those meetings within the 2 week time

17 frame that was agreed.

18 "We summarised our understanding of the package

19 proposal in correspondence with the Government

20 negotiating team dated 23 November ..."

21 That was the appendix 1 document, the understanding

22 of the package, correct?

23 A. Yes.

24 Q. "... and have based our subsequent discussions with our

25 board and prospective new partners, CNOOC and Total, on

1 these principles."

2 Just pausing there, you have already said there is

3 a meeting with Total the night before and if that goes

4 well then you are going to move on to acceptance of the

5 package proposal, so of course the meeting has gone

6 well, hasn't it?

7 A. Yes.

8 Q. "Having discussed the package with our board and with

9 CNOOC and Total, we are able to confirm as follows:

10 "1. We are pleased to confirm our agreement in

11 principle with the package offered.

12 "2. Subject to agreeing a form of memorandum of

13 understanding with Government and the URA which reflects

14 the package and receiving the relevant consents,

15 $470 million will be paid to the Government and the URA

16 (327 to the Government, 142 to the URA) under the terms

17 of the agreed package.

18 "We would hope that the above mentioned payments

19 could be deposited [very soon]."

20 To formalise the package find attached the proposed

21 MOU, draft form of letter from the Minister providing

22 the requisite consents.

23 It is signed by you, copied to the President,

24 Mr Bbumba?

25 A. Mrs.

1 Q. Mrs, my apologies, Mrs Bbumba. The Permanent Secretary,

2 Ministry of Energy, Mr Fred Kaliisa; the Permanent

3 Secretary, Ministry of Finance, Mr Kiiza, is that right?

4 A. No, Mr Kassami.

5 Q. Mr Kassami, and the Commissioner General, URA, Allen

6 Kagina. All of the people we have been seeing in the

7 correspondence so far, central people, yes?

8 A. Yes.

9 Q. If I could invite you next to turn to 4826, please.

10 4826 is a cover email from you to Patrick Bitature and

11 Andy Demetriou, yes?

12 A. Yes.

13 Q. "M7 letter attached. M7 letter dated 2 December 2010."

14 The letter over the page, His Excellency, signed by Tim

15 O'Hanlon. The signature is not legible on the copy

16 I have:

17 "Your Excellency, following the constructive

18 meetings we had with you and your technical team in Gulu

19 ... pleased to enclose a letter we have written today to

20 Minister Onek confirming that Tullow accepts the package

21 proposal which was offered to us."

22 That was your letter of 2 December?

23 A. Yes.

24 Q. "We look forward to finalising all relevant details soon

25 so that payments of over 470 million can be made to

1 Government accounts and Tullow with our new partners,

2 CNOOC and Total, can proceed with the early development

3 of the Lake Albert Basin."

4 On any view the letter to His Excellency,

5 Mr Museveni, and Minister Onek would have been sent

6 before 1.30 on Thursday, 2 December, correct?

7 A. How are you getting that timing? The email from --

8 Q. The email, it is Thursday, 2 December, 1.32, yes?

9 A. Yes, it looks like it.

10 Q. The letter has been sent by that time, yes?

11 A. Yes.

12 Q. It has either been sent before it is sent to Mr Patrick

13 Bitature or Mr Patrick Bitature in his role as honest

14 broker is playing the postman, is that right?

15 A. Sorry, I was looking at the dates. Could you repeat the

16 question, please?

17 Q. Yes, it appears from --

18 MR JUSTICE BURTON: I think it is a simple question. Either

19 it has been sent already by some other means before 1.32

20 or 1.32 is the method by which it is being despatched to

21 the President, ie you are expecting Mr Bitature to pass

22 it on?

23 A. That looks like that.

24 MR JUSTICE BURTON: One way or the other 1.32 is D Day?

25 A. Yes.

1 MR JUSTICE BURTON: Or D Hour?

2 A. Yes.

3 MR QURESHI: Could I ask you, please, to look at the

4 document at page 4833 of the same bundle. E17/4833.

5 Peter Kabatsi, Thursday, 2 December 2.26, just over

6 an hour after that letter signifying the acceptance had

7 been sent, yes?

8 A. Yes.

9 Q. To you, and only to you within Tullow, yes?

10 A. Yes.

11 Q. And to the partners at KAA Advocates and Justice Mulenga

12 who is also, lest we forget, at KAA Advocates, and the

13 subject is "Comprehensive opinion: Tullow versus

14 Government of Uganda":

15 "Dear Graham, please find attached the comprehensive

16 legal opinion on the Tullow-GOU dispute as requested."

17 A. Yes.

18 Q. So it would seem from this cover email that Mr Kabatsi

19 understood that you had requested the comprehensive

20 legal opinion?

21 A. Yes, I'm not sure -- you could read that into it, yes.

22 Q. He is only addressing you, isn't he?

23 A. Yes.

24 Q. He is not addressing Mr O'Hanlon?

25 A. It could be as requested by Tullow, but, yes, fine.

1 Q. Tullow, we are told, is a substantial organisation,

2 there are lots of people in Tullow but he didn't send it

3 to [email protected], he sent to you, and the reason he

4 sent it to you is because it would appear that you had

5 requested it?

6 A. Yes.

7 Q. Could I ask you, please, to look at bundle 18. Does

8 my Lord have this?

9 MR JUSTICE BURTON: Yes, I have already got it. Core bundle

10 713.

11 MR QURESHI: Yes.

12 This is a document headed "Kampala Associated

13 Advocates", 30 November?

14 A. Yes.

15 Q. Seven partners are identified on the left-hand side with

16 Mr Elly Karuhanga first, Oscar Kambona second, Samuel

17 Mayanja, Peter Kabatsi, Charles --

18 MR JUSTICE BURTON: We can see it, yes.

19 MR QURESHI: Yes. "Opinion and advice on various legal

20 issues surrounding the current impasse between Tullow

21 and the Government of Uganda."

22 It is addressed to you?

23 A. Yes.

24 Q. If you could just turn forwards to 4884, it is an email

25 from you on Friday evening to Richard Inch and Alasdair

1 Murray. This is the next day, yes?

2 A. Yes.

3 Q. You have received it at 2.30 in the afternoon on the

4 Thursday. On the following evening you forward this

5 email a day and a half later to Mr Inch and Mr Murray,

6 yes?

7 A. Yes.

8 Q. "Weekend reading.

9 "I haven't read it yet myself."

10 Your words, yes?

11 A. Yes.

12 Q. Can you help us as to when it is that you recall first

13 reading this opinion?

14 A. I can't specifically but the fact that I'm saying

15 "weekend reading", I'm guessing I read it myself over

16 the weekend. This was 6.30 on a Friday so I will have

17 read it over that weekend.

18 Q. When Mr Kabatsi sent it to you on Thursday at 2.26 he

19 said:

20 "Dear Graham, please do not hesitate to contact us

21 for any clarifications you may require."

22 That was an invitation to you, wasn't it?

23 A. Yes.

24 Q. Do you recall contacting Mr Kabatsi for clarification?

25 A. I don't think I did.

1 Q. But you recall that you probably read it over the

2 weekend, yes?

3 A. Yes.

4 Q. Now, as you appreciate, we have been provided with

5 a largely blank document but insofar as we have text,

6 before I take you through it I am assuming that you have

7 read this before giving your evidence in court today?

8 A. Yes.

9 Q. On several occasions, I assume?

10 A. Yes.

11 Q. Maybe even over the weekend?

12 A. I'm not sure.

13 Q. "Dear Mr Martin, this paper is prepared for Tullow's

14 benefit and in relation to the various issues that

15 remain unresolved arising by reason of Heritage Oil &

16 Gas farmout to Tullow and the proposed farmdown by

17 Tullow to Total and CNOOC."

18 That is what the opinion is addressing, yes?

19 A. Yes.

20 Q. You mentioned that the opinion was co-authored, as you

21 understand it, by Mr Kabatsi, the former Solicitor

22 General, and Mr Justice Mulenga, retired and late?

23 A. Yes.

24 Q. Let us look at 4858. Does my Lord have 4858?


1 MR QURESHI: We have "Caveat", left-hand side, a signature,

2 "Peter C R Kabatsi, Managing Partner, with the

3 concurrence of Justice Joseph Mulenga, Retired Judge of

4 the Supreme Court of Uganda (consultant)", "pp"; it

5 would appear that retired late Justice Joseph Mulenga

6 didn't actually sign this document, did he?

7 A. It would look like that, yes.

8 Q. Can you help us as to who that signature might belong

9 to? Does it look like Elly Karuhanga's signature?

10 A. It does to me.

11 MR JUSTICE BURTON: It looks more like "Kalumiya", doesn't

12 it?

13 A. I'm not actually familiar with --

14 MR JUSTICE BURTON: Is it Dr Charles Kalumiya, page 4834?

15 A. I am not familiar with his signature, my Lord.

16 MR QURESHI: Are you familiar with Elly Karuhanga's

17 signature?

18 A. If I saw it, I might recognise it. I can't immediately

19 think what it looks like.

20 Q. Unfortunately we don't have much trace of Mr Karuhanga,

21 save repeated references and I'm not aware of there

22 being a copy of his signature to compare. But in any

23 event, it is clear that late retired Justice Mulenga has

24 not signed this document, has he?

25 A. It would appear so.

1 Q. You have read it over the weekend. You didn't go back

2 to Peter Kabatsi for any clarifications on the opinion,

3 right?

4 A. That's right.

5 Q. Did you ask: "I have read this and it doesn't look as if

6 late retired Justice Mulenga has signed this. Any

7 reason why?"

8 A. No, I didn't ask that question.

9 Q. Did you ask: "There is a signature there but I can't

10 read whose it is"?

11 A. No.

12 MR JUSTICE BURTON: Mr Kabatsi will be able to help us, I am

13 sure.

14 MR QURESHI: My Lord, it is just that the recipient --

15 MR JUSTICE BURTON: No, of course, I understand that.

16 MR QURESHI: The second paragraph:

17 "This opinion is based on our understanding of the

18 facts as explained and presented to us by Tullow's

19 various executives."

20 It is not saying: "On our understanding of the facts

21 as explained and presented to us by Tullow's various

22 executives and Oscar Kambona, David Mpanga, Joseph

23 Matsiko", is it?

24 A. No.

25 Q. So just to be clear, whether on the 18th or 19th or at

1 any stage before 30 November, did you provide an

2 explanation, you or anybody in Tullow provide an

3 explanation to Mr Kabatsi because we know that

4 Mr Justice Mulenga features prominently in his absence,

5 even his signature doesn't appear on the document, did

6 you provide an explanation of the facts to

7 Mr Peter Kabatsi?

8 A. No.

9 Q. Did any other of the Tullow various executives provide

10 an explanation of the facts to Peter Kabatsi?

11 A. I don't believe so in the period you are referring to,

12 no.

13 Q. Did you provide Mr Peter Kabatsi with any form of

14 instructions for the provision of this opinion?

15 A. No.

16 Q. Just so we are clear, where the opinion is setting the

17 basis of the understanding you are not aware of any

18 facts having been explained to Mr Kabatsi by you or any

19 other Tullow executive?

20 A. In the post Gulu period you are referring to --

21 Q. Yes.

22 A. -- no. During the Gulu meetings certain facts would

23 have been explained and possibly before then.

24 Q. Is there any reference here to documents that have been

25 reviewed by Mr Kabatsi and Mr Justice Mulenga?

1 A. No.

2 Q. "... this had been based on our understanding of the

3 facts as explained and presented to us by Tullow's

4 various executives and on the assumption that those

5 facts can be proved as such."

6 You told us that facts were explained at Gulu. Can

7 you just tell us now what those facts may have been?

8 A. This opinion covered five or six or six or seven

9 different topics. There would be a whole series of

10 facts given to him in terms of those other issues, and

11 in relation strictly to the Heritage issues I'm assuming

12 he's referring to things like facts around the escrow

13 agreement. I don't know.

14 MR JUSTICE BURTON: The dates of payments?

15 A. Dates of payment, my Lord?

16 MR JUSTICE BURTON: Dates of payments of the monies under

17 the SPA.

18 A. We didn't specifically provide those to Mr Kabatsi, but

19 we had previously provided them to the law firm.


21 A. And I might have explained to Mr Kabatsi again how

22 I felt that funds had moved on different dates. I don't

23 recall.

24 MR QURESHI: This would all have been oral explanation, yes?

25 A. I believe so, I can't point to anything else at the

1 moment.

2 Q. If we are to understand the situation we have a document

3 that numbers some 25 pages which bases its understanding

4 of facts on oral explanations?

5 A. Yes.

6 Q. And what does it mean: "On the assumption that those

7 facts can be proved as such"? How do you understand

8 that?

9 A. Well, the opinion was given on the basis that the

10 information the authors had was accurate.

11 Q. Paraphrasing, we have been told A,B,C,D by you and we

12 will assume that that is correct, yes?

13 A. Yes.

14 Q. 1.0:

15 "Following the farmout transaction between Heritage

16 Oil and goes [I will call them HOGL for short

17 my Lord] and Tullow in respect of blocks 1 and 3A

18 Government insists that Tullow should pay the CJT that

19 is otherwise payable by HOGL resulting from the gain

20 realised by HOGL from the disposal of its interest to

21 Tullow in the said blocks. The Government argues that

22 Tullow was under an obligation to withhold tax from the

23 purchase price paid to HOGL on the basis that Tullow had

24 been issued with a letter from the URA designating

25 Tullow as a withholding agent."

1 Pause there. That's an understanding that

2 Mr Kabatsi had derived from Tullow's executives. Can

3 you help us, what did he mean by you being under an

4 obligation to withhold tax from the purchase price on

5 the basis that you had been designated as a withholding

6 agent? What does that mean?

7 A. I'm assuming he's referring to the 27 July notice and

8 the designation --

9 MR JUSTICE BURTON: He thinks that the notice was received

10 before the money was paid out, doesn't he?

11 A. It might suggest that.

12 MR JUSTICE BURTON: Is there any other explanation for that?

13 The Government argues, admittedly it is a case that has

14 been made on which he hasn't opined, but his

15 understanding was that the Government's case was that

16 you had paid out the purchase price, whether it was into

17 the escrow account or not doesn't matter, in breach of

18 an obligation, having received a notice, to withhold the

19 tax and that wasn't the facts.

20 A. But I think in the next paragraph, my Lord, he goes on

21 to say Tullow's view. He's in the first paragraph

22 saying his understanding of the Government view and in

23 the second paragraph Tullow's view.

24 MR JUSTICE BURTON: Yes, we'll come to that. But it wasn't

25 the Government's view, was it?

1 A. It had been at one point.

2 MR JUSTICE BURTON: Really?

3 A. When there was a bit of confusion over the timings.

4 MR QURESHI: But it is correct, isn't it, that that was, as

5 you pointed out, the Government's view and they

6 maintained that view and if they were firm and

7 unwavering on anything that was their position?

8 A. I think the Government's view was that the timing didn't

9 matter.

10 Q. We are not going to go back to the document where you

11 say, well, that was a bit slick, but the issue was so

12 far as the Government were concerned that you ought to

13 have obeyed the notice because you were in possession of

14 monies and that the monies, certainly the Government's

15 perception, clear perception was that the monies were

16 transferred after you had received the notice.

17 MR JUSTICE BURTON: It sounds as though I'm in a different

18 courtroom, Mr Qureshi, but I thought the Government's

19 case was that once you received the notice, even though

20 the money had been paid to the escrow account, Tullow

21 was, the claimants were sufficiently in control of the

22 money in the escrow account for it to be regarded as in

23 their possession or treated as in their possession. And

24 when they were told that the money had already been paid

25 out they said that doesn't matter because you are still

1 in control of it. I don't think there has ever been a

2 suggestion, if there was there it was a very early

3 misunderstanding, but no doubt I'll be told about it,

4 but I don't think there has ever been a suggestion by

5 the Government that the money was paid out after service

6 of the notice and thus in devastating breach of it.

7 A. That is my understanding, my Lord.

8 MR JUSTICE BURTON: That is your understanding too,

9 thank you.

10 The point that is being made, assuming your and my

11 understanding is correct, Mr Martin, that Mr Kabatsi

12 seems to have understood that the Government was arguing

13 that you had paid out money after receipt of the notice,

14 and if that's what Mr Kabatsi understood it was

15 a misunderstanding.


17 MR QURESHI: So that is what he understood.

18 A. But I think in the next paragraph he goes on to explain,

19 to clarify.

20 MR JUSTICE BURTON: Of course but it is a misunderstanding

21 of what the Government's case was.

22 A. Yes, my Lord.

23 MR JUSTICE BURTON: We'll come to your case.

24 MR QURESHI: "The Government insists that Tullow ignore this

25 letter" and instead the point that my Lord makes about

1 a misunderstandings which we'll address subsequently,

2 with Mr Kabatsi, no doubt, "Tullow ignored this letter

3 [so you have the letter] and instead subsequently paid

4 the entire purchase price HOGL without withholding the

5 tax. On the basis of their position Government refused

6 to consent to the transfer of the HOGL's interest at

7 Tullow in blocks 1 and 3A. Tullow on its part insists

8 that it is under no legal obligation to withhold tax

9 from payment to HOGL because at the date and time of

10 payment the agency designation letter had not been

11 delivered to Tullow by the URA."

12 This timing point:

13 "The agency appointment was delivered to Tullow on

14 27 July when payment of the purchase price to HOGL had

15 been done on 26 July."

16 MR JUSTICE BURTON: And that is your case and always has

17 been your case.

18 A. Yes, my Lord.

19 MR JUSTICE BURTON: He doesn't appear to be addressing in

20 that paragraph at any rate, the possession.


22 MR JUSTICE BURTON: Or the payable point.

23 A. Yes.

24 MR QURESHI: "Tullow's position notwithstanding and in the

25 interests and in consideration of reaching a resolution

1 of the issue with the Government on this and all Tullow

2 is agreeable to paying the amount due from HOGL on

3 account of tax. This payment would be made on the

4 basis..."

5 Ie that you have agreed to make that payment, you

6 are agreeing to make the payment on the basis; is that

7 fair?

8 A. Yes.

9 Q. That in accordance with 108 of the Income Tax Act and

10 Tullow being one of the signatories to the escrow

11 account into which up to 283 million was paid you are

12 agreeing that you are in a position of being deemed to

13 be in possession of HOGL's assets, correct?

14 A. Yes.

15 Q. "On making this payment and on the basis of the

16 indemnity contained in the same 108 of the ITA Tullow is

17 able to recover the amount paid from the escrow

18 account."

19 Just pause there. That third paragraph, just help

20 me, where in that third paragraph does Mr Kabatsi opine?

21 A. I don't think he does opine as such in this paragraph.

22 Q. Let us look at the next paragraph:

23 "Tullow's real chance of recovery of the 283 million

24 from the escrow account is invariably" -- just help me,

25 what does "invariably" mean? Completely?

1 A. I don't know.

2 Q. "... dependent on URA undertaking and completing steps

3 towards enforcement of tax recovery measures against

4 HOGL."

5 What did you understand that to mean?

6 A. Consistent with what we had been saying all along, that

7 we needed to make sure that the Government continued to

8 pursue the Heritage tax appeal procedures.

9 Q. Where in the two pages that we can see, ignoring the

10 caveat and the signature, and the PP, where in the two

11 pages has Mr Kabatsi, let alone the late retired

12 Justice Mulenga, confirmed the opinion that was provided

13 to you on 18 November or 19 November?

14 A. I don't think it is a clear statement of opinion. I'm

15 agreeing with you.

16 Q. Let us forget about clear or not. Where is any

17 statement of opinion produced that is confirmatory of

18 what was said on 18 or 19 November?

19 A. I don't think there is in this paragraph.

20 Q. Well, is it secreted under the redactions?

21 A. No, they cover different issues completely.

22 Q. The reality is much simpler, isn't it: Rather than seek

23 to disparage the ability or understanding of Mr Kabatsi

24 the simple fact of the matter is there is no opinion

25 being expressed by Mr Kabatsi let alone

1 Mr Justice Mulenga in this document because he wasn't

2 asked to express an opinion in this document on what

3 I have described as the Heritage issue, correct?

4 A. No, I don't think that's right. I was very clear on

5 Mr Kabatsi's opinion at the Gulu meeting and at the

6 meeting in our office the day after I don't think -- and

7 that was a depressing opinion and that we would lose in

8 the Ugandan courts on this being deemed to be in

9 possession of the escrow account. Ugandan courts would

10 find a way of agreeing with the URA. That opinion --

11 MR JUSTICE BURTON: He doesn't say that, does he?

12 A. He doesn't say that in here.

13 MR JUSTICE BURTON: And at that stage in the meeting on the

14 19th his colleagues disagreed with him.


16 MR JUSTICE BURTON: There is no resolution of that dispute

17 in this opinion, is there?

18 A. No, there isn't.

19 MR QURESHI: Did you not find having had the weekend to

20 review this document it a little odd, let alone

21 disappointing and depressing that this uplifting moment

22 that had been provided to you on 18th or 19th by

23 Mr Kabatsi was not carried through in this opinion?

24 A. I didn't see it as an uplifting moment. I saw it as

25 a rather depressing moment on all of the issues we were

1 dealing with with the Government. I don't know when

2 I focused on this opinion. It was clearly not on the

3 day we received it. And it may seem strange but I was

4 completely distracted by all the other issues we were

5 trying to get over the line.

6 MR JUSTICE BURTON: There were 23 pages of no doubt

7 catenating advice.

8 A. Yes, my Lord, on a whole host of other issues.


10 MR QURESHI: Mr Kabatsi had given you a very clear

11 invitation to seek clarification if you required it,

12 hadn't he?

13 A. Yes, he had.

14 Q. And you never took that invitation up?

15 A. No, I didn't. I was completely distracted and trying to

16 get the deal over the line, our sales deal.

17 Q. It is actually more correct to say that you weren't

18 distracted. What mattered at this point in time, and

19 the only thing that mattered, was concluding the deal

20 because you had accepted the package proposal on

21 2 December, hadn't you?

22 A. We had accepted the package proposal. There was a lot

23 of drafting still to do and agreement yet to reach with

24 the Government but in principle, yes.

25 Q. The substance of this opinion, which is heavily redacted

1 we can infer, relates to the Tullow tax issues and the

2 Tullow issues with the Government, correct?

3 MR WOLFSON: I am not sure that my learned friend is

4 entitled to put that to the witness.

5 MR QURESHI: My Lord --

6 MR JUSTICE BURTON: I think we have to understand the basis

7 of the redaction, have we not? He is not asking about

8 the substance of the advice.

9 MR QURESHI: No.

10 MR JUSTICE BURTON: Can you just put it by reference to the

11 wish list?

12 MR QURESHI: Yes.

13 MR JUSTICE BURTON: It related to the wish list, did it?

14 A. Not exclusively, my Lord. It did relate to some other

15 issues including the possibility that if the package

16 deal fell apart we might be somehow able to still

17 acquire 100 per cent of the base and interest from the

18 Government but that was on our technical interpretation

19 of the Ugandan petroleum law under which we had asked

20 them to opine.


22 It is such a dense opinion, the parts we can't see

23 that it is difficult to know how Mr Kabatsi was able to

24 give such a comprehensive opinion in relation to all

25 these other matters without having really got his head

1 round those issues, but there was no discussion between

2 you and him between the oral conversation on the 19th

3 and his production of the opinion?

4 A. No, my Lord.

5 MR QURESHI: But you have agreed that there is nothing on

6 the part of the opinion that we can see which confirms

7 what it is that you say Mr Kabatsi said on 18th or 19th

8 of November?

9 MR JUSTICE BURTON: He has agreed to that.

10 A. Yes.

11 MR QURESHI: Could I invite you to please turn to 4885 and

12 4886.

13 MR JUSTICE BURTON: Just to dot the Is and cross the Ts are

14 you going to ask about reliance as at 2 December? It

15 follows really but if you are going to invite me to

16 reach some conclusions it might be helpful.

17 MR QURESHI: My Lord, I am grateful. The simple fact is,

18 Mr Martin, that your witness statement, as I identified

19 previously, paragraph 12 -- let us just go to it again.,

20 Paragraph 12, paragraph 17, paragraph 191. Let us just

21 go back because this is a fairly important point. It is

22 the central element of the case as advanced by Tullow so

23 let us look at it again.

24 12:

25 "However, as I explain in this statement we received

1 legal advice shortly after a meeting with the Government

2 on 18 November from Peter Kabatsi, the head of

3 litigation and former Solicitor General. This advice

4 changed our assessment."

5 Paragraph 17.

6 MR WOLFSON: Can you read the last bit.

7 MR QURESHI: Yes, of course:

8 "The advice was later confirmed in writing by others

9 at KAA."

10 We'll get to the others in a second. Let us just

11 stick to Mr Kabatsi. Paragraph 17:

12 "However, whilst we accept that Tullow clearly had

13 commercial motivations for making the payment to the

14 Government there was also in any event a legal

15 obligation on us by virtue of the notice. Although our

16 initial assessment of 27 July notice had been that it

17 did not bind Tullow the advice that we received from

18 Peter Kabatsi shortly after 18 November changed our

19 assessment."

20 MR JUSTICE BURTON: And then 191.

21 MR QURESHI: "However, as I explain below, subsequent legal

22 advice from Peter Kabatsi of KAA brought about

23 a fundamental change in our thinking."

24 Do you see that?

25 A. Which paragraph are you on now?

1 Q. 191.

2 A. Yes.

3 Q. Three times Peter Kabatsi?

4 A. Yes.

5 Q. "Fundamental change in our thinking".


7 MR QURESHI: It is helpfully pointed out that --

8 MR JUSTICE BURTON: What is the answer to that?

9 MR QURESHI: Mr Martin, so far as Peter Kabatsi's advice is

10 concerned, there is not a shred of evidence as to what

11 that advice was in any of the documents that we have

12 seen, is there?

13 A. There is not, not in that opinion as such, no. I was

14 very clear on Mr Kabatsi's advice post Gulu and in the

15 discussions with KAA in our meeting afterwards and it

16 was at odds with his partners' advice.

17 MR JUSTICE BURTON: At odds with his partners' advice and

18 when he produces a written opinion he doesn't mention

19 either the advice or why the "oddsness", if that is the

20 right noun, has been resolved.


22 MR QURESHI: So not only is there no evidence of this

23 advice, plainly, if that advice had been given you would

24 have expected it to have been confirmed in the document

25 of 30 November which was intended to provide you with

1 confirmation of the advice and it wasn't there, was it?

2 A. No, there was no formal opinion as such. It seemed

3 to -- on an initial reading it seemed to reflect what

4 I had heard from him but on a clear reading it is just

5 a statement of the Tullow position. I agree with that.

6 Q. Just to be clear, are you saying that the clear reading

7 is something that you undertook over the weekend after

8 receipt of the opinion?

9 A. I don't recall when I focused on that opinion. It was

10 not uppermost in my mind. There were too many other

11 things taking up my attention in those days after the

12 2 December.

13 Q. So given that there is no substantive advice on the

14 Heritage issue in the opinion -- you agree with that,

15 the written opinion?

16 A. There is no opinion as such, that's right.

17 Q. Just help me, at paragraph 213 under the heading "final

18 legal opinion from KAA" -- does my Lord have it,

19 section 5?


21 MR QURESHI: This is a reference to KAA, not Peter Kabatsi,

22 KAA. This is Mr Mpanga and Kambona. Reference to the

23 22 February 2011. My Lord, we have seen that but we'll

24 get to that shortly.

25 "The opinion was given jointly by Mpanga and Kambona

1 and was in agreement with the opinion previously given

2 by Kabatsi and Mulenga discussed above."

3 If there was nothing in the opinion of Mulenga and

4 Kabatsi, there was nothing for them to agree with, was

5 there?

6 A. I don't think the 30 November document reflected the

7 opinion I had received from Peter Kabatsi. It took us

8 a while to focus on the fact that -- as I said earlier,

9 it was not the most material issue that we were looking

10 at that time. A lot of the other issues that came out

11 of that opinion were more important to us. When we

12 began to focus on it it was clear we needed a more

13 detailed opinion on the validity of those notices.

14 Q. Let us just take this slowly. This is a witness

15 statement which is substantial. It is a 70 page

16 document including your signature. A document you have

17 plainly had plenty of opportunity to consider in draft

18 form. What I am asking your assistance on, Mr Martin,

19 is the last sentence of paragraph 213. What I am asking

20 you, you can agree or disagree, the Mulenga/Kabatsi

21 opinion, let us give Mr Justice retired late Mulenga

22 some credit even though it would appear on the face of

23 it that there is no evidence that Mr Justice Mulenga

24 late retired, was a contributor to the opinion.

25 Mr Kabatsi will no doubt tell us differently. But there

1 was nothing in that opinion which addressed the Heritage

2 issue, was there?

3 A. It clearly referred to the Heritage issue.

4 Q. Yes, but there was no -- the opinion previously given by

5 Peter Kabatsi and Justice Mulenga --

6 MR JUSTICE BURTON: He has already said that there was no

7 opinion in that document.

8 MR QURESHI: Yes. So there was nothing for them to agree

9 with, was there, on the Heritage issue?

10 A. They were clear as to Peter Kabatsi's view following in

11 the discussions we had in our office post Gulu.

12 Q. I am sorry, Mr Martin, I apologise for having to press

13 you on this. It is, as I'm sure you are aware, a very

14 important point, because you are talking about

15 a fundamental change in thinking and now I am sure we'll

16 hear that in fact it was the Kambona/Mpanga opinion of

17 22 February that was critical. Let us take that line

18 down as far as we can.

19 What you are saying here couldn't be clearer,

20 Mr Martin. We can forgive Mr Demetriou and Mr McDade

21 for their terminology. This is a witness statement

22 produced for these proceedings which you corrected and

23 which I asked you whether or not you wanted to correct

24 again. The opinion of 22 February was given jointly by

25 Mpanga and Kambona and was in agreement with the opinion

1 previously given by Kabatsi and Mulenga.

2 I will ask the question again. On the Heritage

3 issue there was nothing for them to agree with, was

4 there, because there was nothing in the Kabatsi/Mulenga

5 opinion?

6 A. There was no opinion as such in that document.

7 Q. You agree? Is that a yes to my question?

8 A. Yes.

9 Q. Thank you. Could we turn to E18/4885 and 4886. Do you

10 have this, Mr Martin?

11 A. Yes.

12 Q. If we start at 4886 all we see is this is part of an

13 email chain between David Salcedo of Ashursts addressing

14 Alasdair Murray. Who at the material time was

15 Alasdair Murray?

16 A. He was a senior lawyer in Tullow.

17 Q. Just help us, how many lawyers are there in the Tullow

18 legal team?

19 A. Across the globe about 18 I think.

20 Q. Where do you normally sit, apart from your temporary

21 office in Tullow, Uganda, Kampala -- when was this,

22 forgive me, it was 2012?

23 A. Yes.

24 Q. Middle, late, beginning?

25 A. It would have been around the time we signed the PSAs,

1 in February I think.

2 Q. February 2012?

3 A. Yes.

4 Q. So February 2012 is when you vacated the Tullow Ugandan

5 office and that is when you would have cleared out

6 whatever was left in the desk?

7 A. No, I would have been clearing out as I went along.

8 Q. But if there was anything left that is the last point in

9 time in which you would have cleared it out?

10 A. Yes.

11 Q. Just coming back to London, Tullow Oil Plc HQ is where?

12 A. In Chiswick.

13 Q. How many people in the Tullow Oil Plc HQ building at

14 present?

15 A. About 600.

16 Q. Approximately the same at the material time?

17 A. No, substantially fewer.

18 Q. How many would there have been around

19 about December 2010?

20 A. 300-ish I think.

21 Q. So it has doubled in size?

22 A. Yes.

23 MR JUSTICE BURTON: I am sorry to interrupt, but you have

24 said it was around about the time you signed the PSA you

25 left the office, February 2012. But you signed the PSA

1 in January 2010.

2 A. We initialled -- sorry, these were the PSAs, my Lord.

3 These were the -- did I say SP? Sorry, I meant as part

4 of the MOU we had the right to get new production

5 sharing agreements which took about ten months to

6 finalise.

7 MR JUSTICE BURTON: These were new ones, not those that are

8 in issue before me.

9 A. Yes.

10 MR JUSTICE BURTON: Yes, thank you. That was the SPA which

11 was 2010. The PSAs were 2012. Thank you.

12 A. Yes.

13 MR JUSTICE BURTON: Sorry to interrupt.

14 MR QURESHI: That is a substantial increase

15 from December 2010 to the present: doubling of numbers

16 in the space of just over two years?

17 A. It's not far off it, yes.

18 Q. Just help us, if you were to be able to attribute the

19 evident success of Tullow to any particular factors what

20 would they be in the intervening period?

21 MR WOLFSON: Are we back to the Sunday Times again, my Lord?

22 MR QURESHI: I am not sure. Given that I don't read the

23 Sunday Times I'm not sure what my friend is referring

24 to.

25 It is just a question. You have indicated what was

1 the position in December 2010. Evidently Tullow has

2 grown substantially since then, hasn't it?

3 A. It has grown substantially in staff, yes.

4 Q. How many staff presently do you have in the legal

5 department?

6 A. Gosh, I think about 18 across the world.

7 Q. And in London?

8 A. In London it must --

9 Q. Chiswick, forgive me.

10 A. It must be nine or ten.

11 Q. December 2010 how many were there?

12 A. I don't immediately remember. Six or seven.

13 Q. Just so we can understand, December 2010, general

14 counsel is you?

15 A. Yes.

16 Q. Then is it Mr Peter Sloan?

17 A. Mr Sloan came and went. I don't think Mr Sloan was

18 there at that point in time.

19 Q. In December 2010?

20 A. Yes.

21 Q. Who else was there?

22 A. Mr Alasdair Murray and a number of other legal staff.

23 Q. Just again help us, Tullow Legal, let us just call it

24 Tullow Legal Chiswick, would you all be within the same

25 area, floor space?

1 A. The legal department was. I didn't sit with the legal

2 department.

3 Q. What floor did the legal department sit in in the Tullow

4 office?

5 A. The third floor.

6 Q. Where did you sit?

7 A. Also on the third floor but in a different part.

8 Q. How far from the legal department?

9 A. 50 yards, through a few days.

10 Q. Would the Tullow Legal sit in an open plan format?

11 A. Yes.

12 Q. How many doors would Tullow Legal have to get through in

13 the 50 yards to you?

14 A. If my door was closed, three.

15 Q. But am I taking it that you operated an open door

16 policy?

17 A. Yes.

18 Q. So people could come in and out if they had any queries?

19 A. Yes, there's times when my door's closed and in that

20 case they have to open it.

21 Q. Understood, but they knock first I assume?

22 A. Yes.

23 Q. So 4885/4886, is an email exchange between Mr Salcedo

24 and Mr Murray. Just help us, you have half a dozen

25 lawyers in your department. When does the general

1 counsel become involved in legal matters?

2 MR JUSTICE BURTON: That's much too wide a question. He's

3 copied into this email. I am not sure where we are

4 going.

5 MR QURESHI: My Lord, he isn't. Not on this one. He's

6 copied in on the one subsequently.


8 MR QURESHI: "Dear Alisdair [3 December, David Salcedo].

9 Thank you for your note which Ronnie and I have

10 discussed ...(Reading to the words)...there is some

11 doubt as to whether the notice issued by the URA is

12 valid."

13 3 December, this is the same day that you are

14 forwarding the Kabatsi/Mulenga opinion -- no disrespect

15 to Mr Kabatsi, he is in court -- for what it's worth.

16 MR JUSTICE BURTON: But he hadn't read it.

17 MR QURESHI: No.

18 "Section 106 applies ... where the tax payable is

19 not the subject of dispute... Can you confirm whether or

20 not Heritage is disputing tax assessment in relation to

21 the transfer of its interests in blocks 1 and 3A. If

22 so, this position appears to be ousted".

23 Then we have text in square brackets which I assume

24 is an answer:

25 "Section 108 gives the commissioner the power to

1 require a person who is in possession of an asset

2 including money belonging to a nonresident taxpayer to

3 pay tax on behalf of the nonresident. That language

4 does not seem to apply to Tullow in the present

5 circumstances: clause 3.6...(Reading to the words)...

6 Tullow in possession of an asset belonging to Heritage."

7 Then the question is raised. The comments are

8 Mr Murray's. Over the page Mr Salcedo's answer in which

9 you are copied in on together with Richard Inch and

10 Reshma Shah and Mr Ronnie King.

11 MR WOLFSON: My Lord, so the witness is put in the picture

12 of course, the witness is also copied on Mr Murray's --

13 when Mr Murray is responding, he is putting his capitals

14 in and the witness should be shown he was copied in on

15 this part.

16 MR QURESHI: Of course, yes.

17 MR JUSTICE BURTON: Yes, so the capitalised comments which

18 were, as Mr Qureshi has said, those in response rather

19 than those of Mr Salcedo were copied to you, Mr Martin.

20 MR QURESHI: You can see that at the top of page 4885.

21 A. It looks like that, my Lord, yes.

22 Q. You can see that?

23 A. Yes.


25 MR QURESHI: Page 4885, Mr Salcedo's answer which you are

1 copied in on. The first part is redacted.

2 "You have received a notice from the URA requiring

3 you to pay 30 million to the URA."

4 This is the 2 December 2010 notice, isn't it?

5 A. Yes.

6 Q. "It refers to both sections 106 and 108. However, we

7 think it is important to establish if possible whether

8 or not the tax assessment to which the URA notice

9 relates has been contested. We do not think that

10 section 108 applies to Tullow..."

11 MR JUSTICE BURTON: Without reading it all it makes the two

12 point: payable and possession; is that right, yes?

13 A. It seems to.

14 MR QURESHI: Subsequent to this --

15 MR JUSTICE BURTON: It says it will be sensible to seek

16 advice from Ugandan counsel on the effect of the two

17 sections, yes?

18 A. Yes.

19 MR QURESHI: Could I ask you to look at 4921, please. This

20 is an email from Mr Inch to Mrs Kagina, cc's you,

21 Friday, 10 December, 11.30, Heritage collection. Before

22 you answer any question on this, you didn't go back, you

23 have already explained, but just for the avoidance of

24 any doubt, you didn't go back to the Mr Kabatsi to ask

25 him for any advice on the points that Mr Salcedo raised?

1 A. No.

2 Q. 4921:

3 "Dear URA team, thanks for listening to our points

4 last night. We in turn took on board your comments

5 regarding 104 and understand your position. Having

6 reviewed the escrow and indemnity arrangements again,

7 our view currently is that we would be able to agree to

8 section 1 of the MOU as drafted if we could please have

9 a letter from the URA on the same day as the MOU along

10 these lines:

11 "Liabilities under notices issued under 106 and 108

12 in respect of Heritage.

13 "We write to advise that objections decisions under

14 99 ITA were issued on 15 November 2010 rejecting

15 objections made by HOGL. In the absence of any appeal

16 under section 100 these assessments shall be finally

17 determined on 31 December. You are hereby required to

18 pay the balance due in respect of these assessments of

19 313 on 7 January. Your attention is drawn to 108(6)

20 interest will accrue under section 136 in respect of

21 late payment.

22 "I hope this is acceptable but let's discuss, and I

23 will also explain how the dates arise. If we can agree

24 the form of this letter and your letter confirming our

25 understanding of the points discussed last night,

1 I think we have agreement on the collection process.

2 So far as the main meeting I understand that

3 Elly" -- who is Elly?

4 A. Mr Karuhanga.

5 Q. "... is asking the SG" -- who is the SG?

6 A. The Solicitor General, I think.

7 MR JUSTICE BURTON: Yes, but who is it referring to?

8 A. The particular person who was SG at the time, my Lord?

9 MR JUSTICE BURTON: Is it referring to the then Solicitor

10 General or an ex-Solicitor General?

11 A. It must be referring to the current, the current one in

12 2010 who has responsibility for the Government side of

13 the MOU.


15 MR QURESHI: Thank you, my Lord.

16 "... to send us the latest draft so we can review

17 and mark it up for discussions. So we are down the last

18 few issues before a meeting. We are on our way now!"

19 Just help us, why was this text being sent to

20 Mrs Kagina of the URA?

21 A. I think we were beginning to narrow down some of the

22 issues under the MOU and we were engaging at that point

23 in time.

24 Q. That is evident that you were engaging. But why were

25 you suggesting draft language for a letter that you

1 wanted from the URA on the same day as the memorandum of

2 understanding?

3 A. My understanding was that having accepted that the

4 notices were valid, we had a real problem regarding

5 interest. We were extremely concerned that by accepting

6 they were valid it shouldn't mean that we were accepting

7 interest was due from 27 July 2010 and this was

8 a mechanism whereby we would restart the clock in terms

9 of interest if we were to close quickly as it felt like

10 at the time.

11 Q. So just to be clear --

12 A. I am happy to --

13 Q. The purpose, is this the only purpose for the request

14 for a letter from the URA, the purpose was to, as you

15 put it, stop the clock or shift the clock when it came

16 to interest?

17 A. That was my understanding of it. Clearly I was copied

18 on this email trail. I was completely distracted at

19 this point in time by all the other issues we were

20 having to deal with with our partners.

21 Q. Could I ask you, please, to look at 4922?

22 MR JUSTICE BURTON: Just before we move on, can I go back

23 for a moment to 4885. When Mr Salcedo copied to you

24 on December 6, the words "it would be sensible to seek

25 advise from Ugandan counsel on the effect of sections

1 106 and 108"; do you see that?

2 A. Yes -- I don't actually but ...

3 MR JUSTICE BURTON: It is the third paragraph, second and

4 third lines of the main email on that page, sent by

5 Mr Salcedo to Mr Murray, copied to you and Mr Inch.

6 A. Yes.

7 MR JUSTICE BURTON: What was your reaction to that: "it

8 would be sensible to seek advice from Ugandan counsel on

9 the effect of sections 106 and 108"?

10 A. I don't recall, my Lord, focusing on this email trail at

11 the time. Clearly it was copied to me but my

12 colleagues, my legal colleague Alasdair Murray and the

13 tax colleagues were dealing with interactions with

14 Ashursts at that time. I was aware in general of what

15 was going on.

16 MR QURESHI: Just come back to 4921, please. I understand

17 your evidence is that you are being copied in on this

18 but you are distracted so you are not paying attention.

19 4921. The sentence beginning "Having reviewed the

20 escrow and indemnity arrangements again". Just the

21 words "indemnity arrangements". The indemnity

22 arrangements are referring to what?

23 A. I believe Mr Inch is referring to the indemnity

24 arrangements under section 108(5) but I am reading it as

25 you are and trying to read his mind.

1 Q. Let us not try and read Mr Inch's mind. "Having

2 reviewed the escrow and indemnity arrangements again",

3 Mr Inch is referring to the review and a view, "our

4 view". Now, he is using the plural, you are copied in,

5 as is Mr Murray. It is right, isn't it, that he's

6 referring to a review of the contractual escrow and the

7 contractual indemnity arrangements?

8 A. I apologise, on reflection that would seem to be the

9 better interpretation of that.

10 Q. The review was carried out by who?

11 A. I don't know.

12 Q. He says, "our", you are copied in. Do you recall

13 whether you were involved in the review?

14 A. I wasn't, no.

15 Q. You recall that you were not?

16 A. I recall I was not. I was doing a whole host of other

17 things at the time.

18 Q. Do you recall anybody communicating to you what the

19 outcome of that review was apart from this sentence?

20 A. Not specifically, no.

21 Q. 4922, please. 4922 is a cover email sent by Mr Salcedo.

22 The document appears to end at 4931 and the document we

23 can see from page 4923 consists of instructions to my

24 learned friend Mr Wolfson to advise in consultation; do

25 you see that?

1 A. Yes.

2 Q. This is towards the end of the week after Mr Salcedo

3 suggested you should get Ugandan board advice on

4 effectively the 106/108 points, and what is said here:

5 "Dear all, I hope things are going well in Kampala.

6 Further to our call on Wednesday I attach draft

7 instructions to counsel in relation to the points on

8 which we agreed to seek David Wolfson's advice. Please

9 let me know if you have any comments on the draft.

10 Ideally, we would like to send our instructions to David

11 in anticipation of a consultation with him on Thursday."

12 The instructions are of course heavily redacted but

13 what we see here, pages 4928 and 4929, are reflections

14 of the advice that has already been given.

15 MR JUSTICE BURTON: The English advice?

16 MR QURESHI: Yes, forgive me, the English advice. Do you

17 see that?

18 A. Yes.

19 Q. Do you recall being provided with a copy of the draft or

20 being asked to provide comments?

21 A. No, I was aware of this going on but I -- it looks like

22 I wasn't copied on this specific one.

23 Q. At any stage after you received the Kabatsi/Mulenga

24 opinion did you in this context where you have your

25 English lawyers opining in a way which is strikingly

1 similar to that of Messrs Kambona and Mpanga, did you

2 consider it would be helpful, if not necessary, for

3 Ashursts to communicate with Mr Kabatsi or Mr Mulenga or

4 Mr Mpanga or Mr Kambona?

5 A. No, as I say, I was doing -- involved in all the other

6 aspects of our arrangements at that time.

7 MR JUSTICE BURTON: Did you show them the 30 November

8 opinion?

9 A. I think there is an email trail where I copied it to

10 some of my colleagues saying "weekend reading".

11 MR JUSTICE BURTON: Yes, but did you produce it to Ashursts?

12 A. I didn't, but I can only assume --

13 MR JUSTICE BURTON: You were the person who was attending

14 the consultation.

15 MR QURESHI: They did, my Lord, there is reference in one of

16 the redactions I have been taking --

17 A. I didn't attend the consultation, my Lord.

18 MR JUSTICE BURTON: But you are saying, Mr Qureshi, that

19 there is evidence that the 30 November opinion was

20 before Ashursts.

21 MR QURESHI: Yes, it was provided to my learned friend.

22 We'll see that in some of the redactions. This is

23 a different point which is at no stage is general

24 counsel -- did you consider it would be useful,

25 necessary or appropriate for Kabatsi, Kambona, Mpanga

1 one or all, or Mulenga, one or all, to liaise by

2 telephone, by email with Ashursts let alone my learned

3 friend Mr Wolfson?

4 A. I didn't, Mr Qureshi. As I said, I was dealing with

5 other things and my colleagues were dealing with this

6 issue.

7 MR JUSTICE BURTON: Would that be a convenient moment?


9 MR JUSTICE BURTON: 2 o'clock.

10 (1.00 pm)

11 (Luncheon Adjournment)

12 (2.00 pm)

13 MR WOLFSON: My Lord, can I just deal with one housekeeping

14 point, very shortly?


16 MR WOLFSON: My Lord, I am conscious that a number of

17 documents have been added into your Lordship's core

18 bundle as we have been going along. We have been trying

19 to keep a note.

20 MR JUSTICE BURTON: You want to borrow my core bundle? It

21 sounds a very good idea.

22 MR WOLFSON: On the undertaking neither I or my learned

23 friend will look at any notes or anything, just somebody

24 from Ashurst --

25 MR JUSTICE BURTON: It sounds a very good idea. Some of

1 them I did at the time put As and Bs, some of them I put

2 in without renumbering but I tried to put them in date

3 order in each case, but yes is the answer.

4 MR WOLFSON: Just for closing submissions.

5 MR JUSTICE BURTON: So overnight, borrow my core bundles.

6 MR WOLFSON: We will have them back for your Lordship

7 tomorrow morning. I am grateful.


9 MR QURESHI: My Lord, in terms of my learned friend's

10 generous offer from Messrs Ashurst to review your

11 Lordship's core bundles, in the circumstances -- no

12 aspersions are being cast on anybody -- would it be more

13 appropriate for that exercise to be undertaken jointly?

14 MR JUSTICE BURTON: Then it is going to cost twice the

15 amount of money, isn't it? I don't think there is any

16 need. No one is going to be able to get any benefit.

17 What, however, we must have is a list provided of the

18 results of your lucubrations, so that both sides can

19 accord their core bundles with this but there really

20 isn't --

21 MR QURESHI: My Lord, that is absolutely fine.

22 MR JUSTICE BURTON: It would need a miraculous understanding

23 of hieroglyphics in order to understand what I have

24 written down.

25 MR WOLFSON: My Lord, I suspect the person who does it will

1 not have worked on this case at all anyway.

2 MR JUSTICE BURTON: That is fine.

3 MR WOLFSON: Thank you.

4 MR QURESHI: Mr Martin, good afternoon.

5 A. Good afternoon.

6 Q. We were looking at bundle E18. Could I invite you to

7 turn to document 4932, please. Do you see it?

8 A. Yes.

9 Q. There are three elements to this email. Let us start at

10 the bottom of the page first. This is an email from

11 Mr Inch to Mrs Kagina, copying yourself and

12 Alasdair Murray and Oscar Kambona. Subject: "heritage

13 collection":

14 "Dear URA team, further to last week's meeting we

15 have looked at how to ensure the 313 million payment can

16 be made even if Heritage obtains an injunction

17 preventing payment under the 108 notice."

18 Just pause there. What is that referring to?

19 A. I believe it is referring to the fact that at this

20 particular point in time, if I have got the timeline

21 right, we owed Heritage some monies.

22 Q. "We expect the payment will have to be made public by an

23 announcement to the market when the SPAs are signed ..."

24 A. Sorry, I am reading it as I go on. It is nothing to do

25 with monies.

1 MR JUSTICE BURTON: I don't think it can be anything to do

2 with that.

3 A. It's not.

4 MR JUSTICE BURTON: It is someone, but you will tell us who

5 if you can remember, has thrown up the possibility of:

6 what happens if an injunction was sought preventing

7 payment under the section 108 notice?

8 A. Yes.

9 MR JUSTICE BURTON: Although it would actually be to seek to

10 prevent you making the 313 payment to the Government.

11 A. That's right, my Lord. I am reading that more clearly

12 now.

13 MR QURESHI: But you can't tell us who it was?

14 A. Sorry, who was?

15 Q. Sorry, whose idea or who had considered the question of

16 an injunction to prevent payment under the 108 notice?

17 A. I don't know. Someone in our team I'm guessing.

18 Q. "We expect the payment will have to be made public by an

19 announcement to the market when the SPAs are signed ..."

20 Is this the farmdown?

21 A. Yes, yes.

22 Q. "... and so there is a risk they [Heritage] will act on

23 that information whether we send a letter or not."

24 Just pause there. What does that mean: "whether we

25 send a letter or not"?

1 A. I'm not entirely sure. I presume it means whether we

2 send a letter to Heritage or not.

3 MR JUSTICE BURTON: That is the question.

4 A. I think that's the way to understand it, my Lord.

5 MR JUSTICE BURTON: Yes, but what do you understand from

6 that, ie was there some talk of sending a letter to them

7 saying that that's what you were going to do? I think

8 that's really what Mr Qureshi is asking.

9 A. Yes, I believe there would have been at some point.

10 MR QURESHI: And also plainly consideration being given to

11 not providing Heritage with any notice at all, yes,

12 because they were going to find out anyway when it's

13 made public?

14 A. Yes.

15 MR JUSTICE BURTON: It says "when the SPAs are signed"; does

16 it mean that?

17 A. I think it probably means -- should have read "when the

18 MOU is signed", but I'm --

19 MR JUSTICE BURTON: Or "when the SPA goes unconditional"?

20 A. Yes.

21 MR JUSTICE BURTON: There we are. This is Mr Inch's note

22 anyway. Yes?

23 MR QURESHI: Obviously, yes, as my Lord points out, this is

24 Mr Inch's email which is headed "Heritage collection"

25 but it is copied to you and Alasdair Murray, legal, and

1 Mr Kambona, legal?

2 A. Yes.

3 Q. And Mr Kambona's position thus far, as we have

4 understood it, is the clear unequivocal "no" that he

5 communicated on 27 August, correct?

6 A. I don't know what his position is on 13 December.

7 Q. Are you aware of any change in his position?

8 A. I hadn't spoken to him about that.

9 Q. Had anybody told you about any change in his position?

10 A. I don't believe so.

11 Q. So you are not aware of there being any change in his

12 position as of 13 December?

13 A. No.

14 Q. But evidently, Mr Inch is alive to the question of

15 notice being given to Heritage or Heritage becoming

16 aware of a payment under the 108 notice route, isn't he?

17 A. Yes.

18 Q. We saw in previous correspondence that there had been

19 consideration given to the escrow and indemnity

20 arrangements a few days earlier and you agreed that that

21 must be the contractual indemnity arrangements?

22 A. Yes.

23 Q. And the contractual indemnity arrangements stipulate

24 notice when a claim -- we say a tax claim -- is made,

25 don't they?

1 A. Yes.

2 Q. If you can help us, help us. When you received the

3 27 July 2010 so-called agency notice you didn't at that

4 time or any time thereafter seek to provide a copy of

5 that notice to Heritage, did you?

6 A. No.

7 Q. When you had received the sea change opinion that you

8 have referred to in your witness statement of Mr Kabatsi

9 on 18/19 November, you didn't seek to provide a copy of

10 the notice to Heritage at that point either?

11 A. No, it was of course on the face of it -- it seemed to

12 have been copied to Heritage on the face of it.

13 Q. Yes, but we have already seen on at least two occasions

14 in the communications that we have looked at that you

15 placed yourself in a position of making enquiries where

16 letters had seemingly been addressed to Heritage, but

17 the senders, namely the Ugandan authorities, could not

18 provide you with confirmation as to whether they had

19 been received or not, yes?

20 A. That's right.

21 Q. So when you felt it was necessary, you didn't just send

22 copies of documents to Heritage but you also chased the

23 senders to check whether or not they had actually sent

24 them to Heritage, yes?

25 A. Yes.

1 Q. But it is the case that at no stage prior to the

2 entering into and the execution of the MOU did you

3 provide a copy of that 27 July notice?

4 A. That's right.

5 MR JUSTICE BURTON: Did it occur to you at the time? What

6 I am really trying to got get at is did you say to

7 yourselves: "Ah, they have given notice to them already

8 so we don't need to" or did it not occur to you one way

9 or the other?

10 A. It was probably a bit of both, my Lord. At the time we

11 received it we didn't think it was valid so we would

12 have thought: no need to pass it on to Heritage. We

13 were engaged in trying to explain to the URA why it

14 wasn't valid. Thereafter, I don't think the issue

15 arose.

16 MR JUSTICE BURTON: Did you at any stage turn your mind to

17 the aspect of it which you have answered to counsel,

18 namely: well, it was addressed to them? Is that a legal

19 answer or is that a factual one, ie, "Well, we looked at

20 it and we thought, well, as they'd had it we didn't need

21 to send it"?

22 A. I think it was the latter, my Lord. It looked on the

23 face of it as if they'd had it.

24 MR JUSTICE BURTON: When did that occur to you?

25 A. I can't remember, my Lord. The document on the face of

1 it shows it being copied to Heritage. I can't remember

2 when we might have gone back and asked ourselves: "Has

3 this actually been copied to Heritage? Should we

4 engaged with them?"

5 MR JUSTICE BURTON: No, but did you at any stage say to

6 yourself -- notice that it had been copied to them and

7 said: "Therefore we don't need to give notice to them"?

8 A. Yes, my Lord, I think that was our --

9 MR JUSTICE BURTON: When was that?

10 A. I don't recall, my Lord, I am afraid.

11 MR JUSTICE BURTON: Yes?

12 MR QURESHI: "We don't see much benefit to Heritage from an

13 injunction but our suggestion is for the MOU to provide

14 additional protection such that in the event an

15 injunction is obtained we agree to pay an equivalent

16 amount as security against payment by Heritage,

17 refundable on collection of the tax due. If you would

18 like me to draft some wording please let me know.

19 "Here is a draft of the letter amended to take

20 account of the appeal by Heritage to be issued when we

21 confirm the SPAs have been signed and an announcement is

22 to be made."

23 My Lord, we saw the substantive text of this in the

24 previous exchange.


1 MR QURESHI: If we go over the page back to 4932, we get

2 a response from Mrs Kagina:

3 "Dear Richard, we will study your proposal and get

4 back to you with detailed response. Initial discussions

5 with my team indicate that if you choose this course of

6 action, ie instead of taxes as we had agreed, the

7 Government will then have to wait for the outcome of the

8 TAT appeal by Heritage before considering consent to

9 grant Kingfisher, Kanywataba and area 1."

10 You go back to her very rapidly:

11 "Dear Allen, thanks for the ..."

12 When I say "you", I mean Tullow. Obviously you are

13 copied in on this:

14 "Thanks for the response but to be clear I am not

15 proposing we change the agreement to pay the 313 as tax

16 payment. I am only targeting a very unlikely situation

17 where ...(Reading to the words)... from doing that."

18 Again, if you can help us: the injunction, insofar

19 as it was being considered within Tullow, was an

20 injunction from which court, can you help us? Was it

21 the Ugandan court or the English court, given that the

22 escrow arrangement was governed by English law?

23 A. I don't recall having given very much thought to this at

24 the time. I was, as I said earlier, completely engaged

25 in all the other aspects of trying to get our deal

1 completed but I think an injunction would have to have

2 been obtained in the domicile of the paying company,

3 which would be Tullow Uganda Limited which was Isle of

4 Man.

5 Q. In the Isle of Man?

6 A. That's my guess at the moment.

7 Q. Why not Uganda or why not England for that matter? Why

8 the deemster?

9 A. I agree with you. Why not? Maybe there was more than

10 one possibility. You asked me for my view. I would

11 have thought you go to the domicile of --

12 MR JUSTICE BURTON: Well, this is Mr Inch's point.

13 A. Yes.

14 MR JUSTICE BURTON: Did you have any thoughts about this at

15 all?

16 A. No, my Lord.

17 MR QURESHI: Can we move on to page 4965, please.

18 MR JUSTICE BURTON: Just so that I am clear, as I understand

19 it, what had been 280 until the President put his foot

20 down on 18 November and said it has to be 313 --

21 A. Yes, my Lord.

22 MR JUSTICE BURTON: -- was now a new position, 313 was new,

23 and there was no issue about that extra 30 arising out

24 of the first notice?

25 A. That's right.

1 MR JUSTICE BURTON: And there was now a 106 notice as well

2 -- well, there wasn't yet, it was just about this time

3 you get a 106 notice as well?

4 A. I think it was on 2 December, my Lord, and it seemed to

5 have been under 106 and 108.

6 MR JUSTICE BURTON: So the advice which had been given can

7 only have related to the 280 or did it relate to the

8 313, the advice that Mr Kabatsi gave?

9 A. It was the 283. Only the 283, my Lord.

10 MR JUSTICE BURTON: Mr Kabatsi, that was the ...?

11 A. The 283.

12 MR JUSTICE BURTON: So you hadn't had any advice which could

13 justify, assuming you felt you had some justification

14 from Mr Kabatsi, on the 30, he could only have been

15 relied on, if at all, on the 283?

16 A. That is my recollection, my Lord, yes.


18 MR QURESHI: 4965, please. Do you have that, Mr Martin?

19 A. Yes.

20 Q. This is from you to Harriet Lwabi, who we can see was

21 the then Solicitor General for Uganda. Page 4973, the

22 signature page for the draft document makes that clear.

23 Because of course you signed off on the MOU on behalf of

24 Tullow, didn't you?

25 A. Yes.

1 Q. Together with Brian Glover.

2 Graham Martin to Harriet Lwabi, "Re: MOU

3 30 December":

4 "Dear Harriet, thank you for your draft ...(Reading

5 to the words)... on that draft including our suggestions

6 for clauses 5.2 and 8.2. We have also tried to clarify

7 the timings of various actions, consents and payments.

8 We hope you will find our suggestions helpful.

9 "To assist your review of our revisions we have

10 added comments where we felt it appropriate. I have

11 sent this email to some of the Government team but

12 I would appreciate it if you could circulate it to those

13 whom I have missed.

14 "I confirm we are available at your convenience to

15 meet and discuss the matter tomorrow."

16 So that is 13 December and as at 13 December your

17 expectation is that you can all sign off on the dotted

18 line the day after which was 14 December?

19 A. I'm not sure if it was the 14th but we were certainly

20 hoping it could be done within days.

21 Q. If we look at the draft, which is at 4966 to 4973, do

22 you see the top left-hand side says "Tullow comments,

23 13 December 2010"?

24 A. Yes.

25 Q. In terms of your substantive comment on what I will

1 describe as the Heritage issue, this is to be found from

2 the bottom of page 4966 as follows, under the block

3 capital bold text:

4 "Now therefore it is hereby agreed by the parties as

5 follows.

6 "1. Payment by Tullow as agent in respect of

7 Heritage tax.

8 "1.1. In accordance with the terms of the agency

9 notice served on Tullow by the URA Tullow shall pay 313

10 ..."

11 Defined as:

12 "The tax collected under agency notice under

13 section 108."

14 "The Minister of Energy and Mineral Development of

15 Uganda shall consent. The said consent shall become

16 effective on receipt by URA of taxes."

17 Your comment:

18 "The consent will not become effective until we have

19 paid the 108 but we will need the consent to be provided

20 prior to payment so that the Total/CNOOC's SPAs can be

21 signed, ie the condition to this consent would be that

22 we paid the 108 ..."

23 Just explain to me how a consent can be given and

24 then its effectiveness suspended?

25 A. The consent is conditional on making a payment. So that

1 when the payment is made it is automatically -- it has

2 satisfied the condition.

3 Q. 1.3:

4 "Government hereby acknowledges and agrees that

5 Tullow in paying the tax collected under the agency

6 notice under section 108 is acting as an agent of

7 Heritage and is indemnified as provided under the ITA".

8 And you have your comments:

9 "Alternative security arrangements to mitigate the

10 Heritage injunction risk to be considered."

11 Now, of course these are comments that you are

12 circulating, so whatever Mr Inch may have had in mind

13 perhaps you can provide us with a little bit more

14 clarity as to what the alternative security

15 arrangements --

16 MR JUSTICE BURTON: Well they have been described, haven't

17 they?

18 A. Yes, my Lord.

19 MR QURESHI: Is this the URA side letter?

20 MR JUSTICE BURTON: It would have quite suited you in a way

21 wouldn't it? You were saying: just in case there is an

22 injunction, you could do it by way of security instead

23 of paying it over?

24 A. Yes, my Lord, it didn't go anywhere.

25 MR JUSTICE BURTON: It is worth asking again whether surely

1 at this stage you hadn't thought about where the

2 injunction could be brought, but you hadn't?

3 A. I don't recall any specific thinking about which

4 jurisdiction would be appropriate.

5 MR QURESHI: If you don't recall any thinking about the

6 jurisdiction, help us in terms of a yes or no answer.

7 Would a possible scenario have been Heritage finding out

8 that you were about to make the payment, purportedly

9 pursuant to section 108, and as a consequence intending

10 to invoke the indemnity which plainly was in your

11 contemplation at this time, studying the indemnity

12 arrangements and concluding, well, the indemnity doesn't

13 bite, going to the English court to seek an anticipatory

14 injunction to prevent a potential call on the indemnity?

15 Is that one possible scenario?

16 A. I don't believe it is one we had considered.

17 Q. So that is not one you had considered but you can't help

18 us as to what you had considered?

19 A. I just don't think our thinking -- I don't think our

20 thinking had evolved very much on that issue.

21 Q. If we turn to 4993?

22 MR JUSTICE BURTON: Is that page 4967, at that stage, I

23 can't remember whether it changed later, the memorandum

24 of understanding, but that is only referring to one

25 agency notice, isn't it, 1.3? The 313 is to be paid

1 under an agency notice under section 108. There is no

2 mention of 106 and there is only one agency notice. Did

3 you know about the second agency notice at this stage?

4 A. Yes, we did, my Lord, and I can't explain why the

5 drafting doesn't refer to the two at this stage,

6 although this drafting came from the Government and only

7 shows our changes, but equally you could ask: why didn't

8 we pick that point up?

9 Sorry, Mr Qureshi, the next reference was?

10 MR QURESHI: 4993.

11 A. Yes.

12 Q. Harriet Lwabi writing to Allen Kagina and others. In

13 fairness to my friend I point out she's using a Yahoo!

14 account:

15 "MOU 15 December 2010. Final agreed MOU by GOU,

16 draft of 15 December 2010.

17 "Dear all, please find attached the current draft

18 ..."

19 If we go to page 4995:

20 "Now therefore it is hereby agreed by the parties as

21 follows."

22 That page in essence remained unchanged, it was

23 tracked through to the final draft, wasn't it?

24 A. I would have to compare the two but that looks like it,

25 yes.

1 MR JUSTICE BURTON: The final draft only referred to one

2 agency notice then?

3 MR QURESHI: Sorry, my Lord?

4 MR JUSTICE BURTON: The final draft only refers to one

5 agency notice?

6 MR QURESHI: My Lord, my attention has been helpfully

7 directed towards another document.

8 MR JUSTICE BURTON: I am looking at the one of the 8th. It

9 is not something I had noticed before now but you saying

10 it didn't change until the final version has caused me

11 to look at the final version and you are right, it

12 didn't.

13 MR QURESHI: But there is an intermediary position which

14 I should in fairness explore with Mr Martin to be found

15 in bundle E17. Bundle E17/4792, please. 775 is the

16 core, I am told. We had looked at the cover email. We

17 hadn't actually looked at the draft but we may as well

18 go back. My fault, Mr Martin, I apologise for going

19 back in time again.

20 4786, please.

21 A. Yes.

22 Q. Does my Lord have 4786 in E17?


24 MR QURESHI: This was the document that you had sent to

25 Mr Bitature, Mr Karuhanga and Tim O'Hanlon. This was

1 about: "Today Aidan is meeting Total in Paris and if all

2 goes well this is what we are going to circulate to the

3 Ugandans."

4 Over the page, 4788, was your draft letter.

5 4790/4791 was the appendix.

6 4792, if I can ask you to refer to 1.1 of this, this

7 is a document that you have circulated. Under the

8 heading "Now therefore it is hereby agreed by the

9 parties as follows", you have:

10 "In accordance with the terms of the agency notice

11 served on Tullow by URA dated ..."

12 That doesn't appear subsequently. Can you help us

13 why this draft contemplated (1) a date being identified

14 and (2) the insertion of a date? This is

15 1 December 2010. Is it reasonable to assume that the

16 square brackets mean "to be inserted", yes?

17 A. At the moment I can't see why we just didn't fill in the

18 date because we knew the date.

19 Q. If you knew the date, then it's puzzling that it's not

20 included but the better explanation and the correct

21 explanation is that that is a date that had yet to

22 occur. We see there might be a greater clarity -- I am

23 helpfully directed towards a potential source of greater

24 clarity, Mr Martin which, given that you are circulating

25 this document, you can disabuse me of, at 1.4,

1 page 4793:

2 "The Government hereby acknowledges and agrees that

3 in paying the agency amount to Government, Tullow is

4 acting as agent under article [in square brackets] 106,

5 108."

6 Do you see that?

7 A. Yes.

8 Q. Can you help us why it is referring to 106 or 108, 106

9 and/or 108? Can you help us?

10 A. Clearly we had anticipated at some point we'd get a new

11 agency notice for the 30 million. I don't think we knew

12 when it was going to come.

13 Q. That was the one that came the next day, wasn't it,

14 2 December?

15 A. As it happened, yes.

16 MR JUSTICE BURTON: That was your draft?

17 A. It was my --

18 MR JUSTICE BURTON: The memorandum of understanding?

19 A. Yes, my Lord. But I think there was also some

20 suggestion at that point or around that point that maybe

21 all this gets cured by the issuance of a new notice, but

22 I can't remember how long that idea got circulation, so

23 I'm struggling to remember why there is no reference to

24 a date here.

25 MR JUSTICE BURTON: When it came to the document we have

1 been looking at, which just refers to one notice without

2 a date and only to 108, you said those were the

3 Government drafts, so you did the first draft and they

4 built on it and then you made comments on their draft,

5 is that it?

6 A. We certainly gave them a draft. I think they changed

7 quite a lot, and then the draft we were looking at -- I

8 forget the reference now -- we were looking at one

9 amended by me which was on their draft, yes.

10 MR JUSTICE BURTON: So your draft is what we have just

11 looked at?

12 A. Yes, my Lord.

13 MR JUSTICE BURTON: No date on the notice, 106, 108?

14 A. Yes.

15 MR JUSTICE BURTON: It came back and stayed right through to

16 the end with an undated reference to one agency notice

17 and to 108 only?

18 A. That's the case, my Lord, yes.

19 MR QURESHI: Another point of distinction here: at 1.1 we

20 have the amount of 313 million being identified, 4792,

21 do you see that?

22 A. Yes.

23 Q. The amount that was being considered previously was 283,

24 wasn't it?

25 A. Yes.

1 Q. So the difference is, if my maths serves me correctly,

2 30 million?

3 A. Yes.

4 Q. So the reality is 1.1 is anticipating the service of the

5 notice in respect of the 30 million, isn't it?

6 A. Yes.

7 MR JUSTICE BURTON: And you are probably, you think,

8 anticipating that the notice will be served by way of

9 a new notice for the total amount of 313?

10 A. I can't recall, my Lord. I think that was a possibility

11 we had anticipated at the time but --

12 MR JUSTICE BURTON: That might of course have helped you on

13 the interest front.

14 A. It might have done, yes.

15 MR JUSTICE BURTON: If it replaced the earlier 283 one --

16 A. Yes.

17 MR JUSTICE BURTON: -- then at least interest would only run

18 as of December?

19 A. That's right.

20 MR QURESHI: Could we turn, please, to 5095, please.

21 A. In which bundle?

22 Q. Sorry, forgive me, it is E18/5095. Do you have that?

23 A. Yes.

24 Q. It is from you to various individuals with what I assume

25 are French names, Total?

1 A. Yes.

2 Q. And a couple of Chinese names as well so that's CNOOC?

3 A. Yes.

4 Q. "Dear Patrick ..."

5 Patrick has written to you, it is at the bottom of

6 the page. How's the surname pronounced?

7 A. I think it is Pouyanne.

8 Q. There is an email that is sent to Aidan Heavey and you

9 are copied and what we have is, over the page we have

10 a copy of the draft that Tullow submitted to the

11 Ministry:

12 "... we were then under the impression that CNOOC

13 and Total would be required to sign an MOU in coming

14 days."

15 This is 13 December.

16 "Further to a discussion between Pete and Hervé ..."

17 Pete is who?

18 A. Pete Dickerson.

19 Q. And who is Hervé?

20 A. Hervé Chaignoux was a Total person.

21 Q. "... it appears that our signature might no longer be

22 required in the first phase and that Tullow might sign

23 an agreement 'subject to buyers' consent' which could

24 put us in a dilemma."

25 What was he referring to?

1 A. I guess that we would have signed something they hadn't

2 fully bought into. I'm trying to read the mind of

3 another person here.

4 Q. "Could you give some instructions so that we can be on

5 board and share our view with Tullow teams?

6 "Regarding the Capital Gains Tax elements, it is

7 obviously more a concern for Tullow than for Total and

8 CNOOC (even if the 'guarantees' [in quotes] on the

9 repayment of the Heritage taxes have to be properly

10 written) ..."

11 What does he mean by "'guarantees' on the repayment

12 of the Heritage taxes", in inverted commas? What is he

13 referring to?

14 A. I think he's referring to the fact that by this stage we

15 had agreed that CNOOC and Total would in principle share

16 the 313 million payment, a third, a third, a third, but

17 we had effectively guaranteed that they would get that

18 back in certain circumstances and within a certain

19 timeframe and clearly here they had only got the

20 principle and not seen the words.

21 Q. Right. Over the page, the next day.

22 MR JUSTICE BURTON: Was there anything in writing about

23 that?

24 A. At the time we signed the agreements with them, my Lord,

25 yes -- with Total and CNOOC, yes.

1 MR JUSTICE BURTON: So there is an agreement in writing

2 between you and Total and CNOOC --

3 A. Yes, my Lord.

4 MR JUSTICE BURTON: -- that they would share the pain of the

5 two-thirds of the 318?

6 A. Yes.

7 MR JUSTICE BURTON: And you say it was actually agreed as

8 part of that document that they would be repaid that

9 money in certain events?

10 A. Yes, my Lord.

11 MR JUSTICE BURTON: Because I thought from your witness

12 statement you said that although there was an agreement

13 in the end there were further negotiations, and indeed

14 I was going to ask you about it if Mr Qureshi didn't,

15 that they would be repaid.

16 A. We cancelled that arrangement, my Lord. We entered into

17 it in 2011 and we cancelled when we completed the

18 agreements with them in 2012.

19 MR JUSTICE BURTON: I will find out what you say. You say,

20 paragraph 219, I think it is:

21 "On closing of the farmdown, Tullow refunded these

22 contributions and this letter has now been discharged.

23 Tullow agreed to do this as part of a negotiation

24 regarding the consideration payable by these parties for

25 the farmdown."

1 I read that on the basis that there was originally

2 an obligation and then there were some further

3 negotiations as a result of which the matter was

4 unwound. But you are now telling me that in fact it was

5 part of the original agreement that the monies would be

6 repaid to them in certain circumstances?

7 A. I think we're saying the same thing, my Lord. When we

8 signed the agreements with them before they went

9 unconditional, before we had satisfied all the consents,

10 we had agreed that they would share in the 313 equally

11 and there were certain circumstances in which they would

12 get that money back.


14 A. That was all discharged as a result of the final

15 discussions when we eventually received their money and

16 I think that's certainly what I'm referring to.

17 MR JUSTICE BURTON: It didn't need to be discharged if there

18 was always a condition that you would pay it back, but

19 anyway ...

20 A. We accelerated the timeframe within which we had to pay

21 it back as part of the negotiations.

22 MR JUSTICE BURTON: Do we have disclosure of these

23 documents, Mr Wolfson?

24 A. I think we do have, my Lord.

25 MR JUSTICE BURTON: I don't want to waste time now, but you

1 have seen them, Mr Qureshi?

2 MR QURESHI: I have seen them.

3 MR JUSTICE BURTON: Because what we need to do -- sorry,

4 Mr Wolfson, you said?

5 MR WOLFSON: My Lord, I am just looking at paragraph 219.

6 MR JUSTICE BURTON: I am reading 219 and I had thought that

7 originally -- I didn't realise there was some original

8 agreement and I then saw that there was a renegotiation.

9 But at any rate, at some stage, no hurry, I would like

10 to see the agreements under which you agreed to share

11 the 318 with your two competitors or two co-venturers

12 and as to whether that was conditional or unconditional

13 and then subsequently I'd like to see the agreement

14 under which that earlier, either conditional or

15 unconditional obligation was unwound.

16 MR WOLFSON: My Lord, the material is in E22 but perhaps it

17 is simplest if we set it out on a note. I'm sure it can

18 be agreed between us. It ought not to be controversial.

19 MR JUSTICE BURTON: That would be very helpful. Thank you

20 very much.

21 MR QURESHI: My Lord, I am assuming that when my learned

22 friend provides us with a note, the documents that are

23 --

24 MR JUSTICE BURTON: Will be attached to it?

25 MR QURESHI: Yes.

1 MR WOLFSON: They are in the bundles.

2 MR QURESHI: If there are any other documents they will be

3 attached.

4 MR JUSTICE BURTON: There won't be -- if there are any other

5 documents obviously they should be disclosed.

6 MR WOLFSON: Yes.

7 MR QURESHI: We are back at 5095, Mr Martin, your answer the

8 next day:

9 "I had hoped to be in a position today to give Total

10 and CNOOC a status update. I am afraid we have not had

11 our expected meeting with the Government which would

12 have allowed me to give a meaningful report."

13 The third paragraph:

14 "As you might imagine, discussion is focusing on

15 some key issues such as the terms of the EA3A and EA1

16 extensions as well as the timing, logistics and

17 conditionality of all the "tax" payments."

18 Can I ask you why you put "tax" in inverted commas

19 as of 14 December?

20 A. I was probably referring to both the Heritage tax

21 payments and our tax payments, all of which, and

22 particularly ours, we had issues of timing, logistics

23 and conditionality.

24 Q. By this point in time, by 14 December, so far as your

25 witness statement is concerned, you have heard from

1 Mr Kabatsi on 18 and 19 November, you have received his

2 opinion on 13 December which you may or may not have

3 read on the weekend of 4 and 5 December; did you relay

4 your understanding of this fundamental point

5 communicated to you by Mr Kabatsi to Total or CNOOC?

6 A. I don't recall specifically talking to them about it,

7 no.

8 Q. Given that they are going to be, as Mr Heavey put it in

9 some of the correspondence, sharing the pain, do you

10 accept that it would have been extremely helpful for

11 them to have known what Mr Kabatsi, as you say he did,

12 had opined on?

13 A. Well, in terms of our disclosures to them we probably

14 did disclose that opinion. I don't recall. I think we

15 would have been obliged to under the terms of the

16 agreements we signed with them. I just don't recall.

17 I wasn't dealing with the detail of which documents they

18 were receiving. I don't remember specifically

19 discussing it with them personally.

20 MR JUSTICE BURTON: The only document we have so far is the

21 written document which you accept didn't contain an

22 opinion. Do you think it was that that you supplied?

23 A. I'm assuming our team had supplied that as part of the

24 disclosure documents, my Lord. I wasn't personally

25 involved in all of that.

1 MR QURESHI: My Lord, I am not expecting your Lordship to

2 recall this, but certainly this is one of the issues

3 that was part of the application that we had made:

4 Total/CNOOC, information and advice provided to them.

5 We have not been provided with any documentation in

6 support of the proposition that Mr Martin seeks to

7 advance that the 30 November opinion or some other

8 written advice was communicated to Total and CNOOC.

9 A. To be clear, my Lord, I'm not sure if we supplied that

10 document or not.

11 MR JUSTICE BURTON: At any rate, there is no sign here of

12 any oral communication, or an email or anything of that

13 kind of the gist of the advice, nothing.

14 A. Not from me, my Lord. My team were also discussing

15 things with Total and CNOOC. I wasn't involved in

16 those.

17 MR QURESHI: So your team of seven?

18 A. No.

19 Q. Who are you talking about?

20 A. Particularly Mr Murray.

21 Q. Mr?

22 A. Mr Alasdair Murray.

23 Q. Mr Murray. Can you tell us, yes or no, whether

24 Mr Murray had informed you that he had told Total and/or

25 CNOOC about Mr Kabatsi's opinion?

1 A. No, I don't recall.

2 MR JUSTICE BURTON: Is there any indication that you passed

3 on to Mr Murray the content of the 30 November advice?

4 A. Yes, I think he was one of the addressees of the email

5 where I said: "Here's something to read for the

6 weekend", my Lord.

7 MR QURESHI: Yes, Mr Inch and Mr Murray.

8 MR JUSTICE BURTON: And that attached the opinion, did it?

9 MR QURESHI: It forwarded it.

10 A. Forwarded it, yes.

11 MR JUSTICE BURTON: Sorry?

12 MR QURESHI: Forwarded it, my Lord.

13 You received it on the Thursday at 1.32, you

14 forwarded it on the Friday at 6.31.

15 Can we go to document 5037. This is two days later.

16 You have told Mr Pouyanne of Total about issues of

17 timing, logistics, conditionality of all the "tax"

18 payments and then we have the following. 5037:

19 "Dear Patrick and Xiao, sorry I have not been in

20 touch sooner since my most recent email below [which is

21 the one we have just looked at].

22 "In fact the promised meeting with the Government

23 team did not happen ...(Reading to the words)... because

24 of electioneering and other duties, it was not likely to

25 happen for a few days."

1 Electioneering, just help us, was this Mr Museveni's

2 election campaign in full swing, is that it?

3 A. It was his election campaign but also all the other

4 parliamentarians, including Mr Onek and other ministers.

5 Q. "Faced with that uncertainty and an inability

6 ...(Reading to the words)... we took the decision to

7 accept a lot of the most recently proposed Government

8 position where we felt able to do so without harming our

9 commercial position."

10 Pausing there, "we took the decision". Who is "we"?

11 A. We, Tullow.

12 Q. "Without harming our commercial position"; what is the

13 commercial position you are referring to?

14 A. I think I'm referring to a lot of the issues on the new

15 PSAs the Government were promising. They were looking

16 for certain value adjustments and those hadn't been

17 agreed.

18 Q. And that is what you go on to say.

19 A. Yes, sorry.

20 Q. "... by proposing wording, deferring discussion of the

21 key issue (value to the Government on licence

22 extensions) until after our new partnership was formed."

23 Partnership with CNOOC/Total, is that right?

24 A. Yes.

25 Q. "On that issue we therefore reverted to wording

1 originally proposed to us by the GOU side which talked

2 about a percentage of ...(Reading to the words)...

3 expectations and little understanding ...

4 "Not wanting to be accused of delaying things we

5 therefore signed some copies of the proposed version of

6 the MOU and left them with our lawyers before departing

7 Kampala."

8 Pause there. Your lawyers in Kampala are KAA, Elly

9 Karuhanga?

10 A. His team, yes.

11 Q. President of Tullow Uganda?

12 A. Yes.

13 Q. "We signed some copies of the proposed version."

14 Who is "we"?

15 A. We, Tullow. I think I signed it.

16 Q. You signed the final version, so you signed it?

17 A. Yes.

18 Q. "All of this is explained in the attachments. We think

19 that in order to get funds flowing into Kampala soon

20 there is a chance that the GOU side might accept this,

21 rather than debate the remaining issues endlessly.

22 A finesse, but worth a shot we thought."

23 Just help me understand what you mean by "finesse"?

24 A. A finesse in the sense that we had signed something to

25 propose to the Government we knew wasn't agreed but we

1 were getting conflicting comments back from Government

2 as to how quickly the Government wanted this money and

3 there was a chance that some people might say: "Let's

4 cut the negotiations, let's just sign this and move on."

5 That was the finesse but it didn't work.

6 Q. "We would be happy to explain the reasons for the

7 position taken in the attached MOU to your respective

8 teams next week and to think through other logicistical

9 issues in the event the GOU accept this position.

10 "The MOU attached is not an elegant document, being

11 a real mix now of different drafting, but we feel it

12 covers the key issue ..."

13 Key issue?

14 A. That should have said "issues".

15 Q. "... in an adequate manner in all the circumstances."

16 And what we have at 5040 is a copy of a letter that

17 you have signed, yes?

18 A. Yes.

19 Q. Copied to the Secretary to the President, Mrs Bbumba;

20 the Permanent Secretary, Minister of Energy; Permanent

21 Secretary, Ministry of Finance, and the Commissioner

22 General URA:

23 "Dear Honourable Minister, thank you for convening

24 and chairing the recent meeting. There are now only

25 a few remaining ...(Reading to the words)... next have

1 an opportunity to meet.

2 "Accordingly, and in order to expedite matters, we

3 have delivered to KAA, our lawyers, signed copies of

4 a version of the MOU which we believe should be

5 acceptable to the Government, given our understanding of

6 the agreements reached and matters discussed. When

7 fully signed by the Government ..."

8 So that is all that was left, isn't it?

9 A. That was our anticipation at that point in time.

10 Q. I understand:

11 "... this will allow us to commence the process

12 ...(Reading to the words)... I enclose a copy of the MOU

13 with commentary on the remaining few differences and

14 matters of clarification."

15 If we go over to page 5041, the commentary:

16 "Commentary on Tullow MOU dated 16 December 2010."

17 Are you describing it as a Tullow MOU because you

18 have now had input on this and this is the draft that

19 you are proposing the Government agree to?

20 A. Yes.

21 Q. "General.

22 "We felt it might be helpful if we set out

23 separately our explanations of the differences between

24 the MOU attached (delivered 16 December 2010) and the

25 version received from the Government team on

1 15 December. We also comment on additional assurances

2 discussed in recent meetings.

3 "We are very pleased to report that we have finally

4 settled the main points covered by the MOU ...(Reading

5 to the words)... We have only a few differences now

6 which principally relate to ..."

7 Three bullet points:

8 "The need for clarity on the terms of new licences

9 so that we can give certainty to Total and CNOOC."

10 And of course you want certainty yourselves as well?

11 A. Yes.

12 Q. "The calculation of the 'value' to be given to the State

13 for the new licences; and

14 "Our ability to fully and properly appraise the

15 existing discoveries.

16 "The attached MOU is acceptable to Tullow and we

17 believe we should be able to gain acceptance for it from

18 Total and CNOOC quickly so that we can sign the SPAs and

19 pay the tax as soon as possible. We appeal to you to

20 finalise this in the manner suggested ..."

21 The remaining issues:

22 "The only remaining issues between the Tullow and

23 GOU versions of the MOU are:

24 "Clause 1: the current wording is acceptable to

25 Tullow, having discussed and agreed in ...(Reading to

1 the words)... in relation to the Heritage tax matter."

2 We can see in terms of clause 1 that's at page 5044.

3 MR JUSTICE BURTON: That is unchanged and it is still one

4 notice and 108 is the only statute mentioned.

5 MR QURESHI: Do you see that, Mr Martin?

6 A. Yes.

7 Q. Could I ask you to turn to bundle 19, please, page 5255.

8 Do you have it?

9 A. Yes.

10 Q. Let us start at the bottom of the page. Christmas Eve,

11 Friday, 24 December, from Elly Karuhanga to Mr McDade,

12 Mr Bitature. As of 24 December 2010, Christmas Eve, you

13 have already signed off on the MOU. What is left for

14 the honest broker to do?

15 A. He helped both sides clear up any further

16 misunderstandings or issues.

17 MR JUSTICE BURTON: The Government hasn't yet agreed to it,

18 has it?

19 A. No, my Lord.

20 MR QURESHI: "Graham, please see the attachment.

21 "The Minister signed it yesterday and I was called

22 by his secretary to get it this morning at 11.30 am.

23 I left a note advising the Minister that I would not be

24 able to get the document to you until 3 January when you

25 return from holidays, that I was posting the letter

1 anyway. The envelope was addressed to you so I'm

2 supposed not to open it."

3 So Mr Karuhanga is sending you an email version of

4 a letter that he has collected, evidently on your

5 behalf, because we'll look at the letter in a second,

6 three hours after collecting it, and he's telling the

7 Ugandan authorities that he won't be able to get the

8 document to you until ten days later when you return

9 from holidays, isn't he?

10 A. Yes.

11 Q. Your email back on 28 December:

12 "I have ignored this since receiving it on the 24th,

13 not wanting to spoil the Christmas break for everyone."

14 I am sure everyone who is copied on this would have

15 been relieved:

16 "As you know, I was hoping that we wouldn't get the

17 official version of the MOU until January ..."

18 Why?

19 A. Because I think we knew by that time all the relevant

20 people were off on holiday.

21 Q. What do you mean "the relevant people"?

22 A. Certainly I was on holiday and I think some of the Total

23 and CNOOC people were on holiday so we were not going to

24 get any engagement in discussing the issues.

25 Q. "... although Elly may have bought us some time by

1 claiming that I am on holiday until 3 January."

2 Yes?

3 A. Yes.

4 Q. Which evidently he has done, hasn't he?

5 A. Yes.

6 Q. By telling the Minister, no less, Minister Onek,

7 something that patently wasn't true, correct?

8 A. I think he was suggesting to the Minister: "Don't expect

9 a quick response because Mr Martin won't get it until he

10 returns from holiday".

11 Q. Is that what he was saying? So when he said: "I left

12 a note advising the Minister that I will not be able to

13 get the document to you until 3 January" and he is

14 sending it to you three hours later, that's not

15 untruthful?

16 A. I am sorry, maybe --

17 MR QURESHI: Why you may have done it is another matter.

18 MR JUSTICE BURTON: I think we have more important matters

19 to deal with this than this, Mr Qureshi.

20 A. I am perhaps missing the point, Mr Qureshi, I am sorry.

21 MR QURESHI: My Lord has the point.


23 MR QURESHI: "If we can accept the comments made in

24 paragraphs 1, 2, 4 and 6 of the Minister's letter [we'll

25 go to that in a second] as being made in good faith ..."

1 Let us just look at them. 5256/5257. 5256,

2 23 December 2010 to you, general counsel, third floor:

3 "Dear Mr Martin, memorandum of understanding ..."

4 Do you see it?

5 A. Yes.

6 Q. "... reviewed." The first comment is on paragraph 5.1.

7 The second comment:

8 "We have made the following few improvements."

9 A. Yes, sorry, I see that.

10 Q. "We have made the following few improvements. We have

11 changed from 'same' to 'similar', paragraph 5.1.

12 "Paragraph 5.2: we have introduced new text

13 requiring Tullow to apply to Government to enable it

14 access the full extent of the prospect in accordance

15 with the Petroleum Exploration and Production Act."

16 What did he mean by "enable it access the full

17 extent of the prospect in accordance with the Petroleum

18 Exploration and Production Act"?

19 A. I think in our draft we had suggested we get a licence

20 over particular blocks, the way these are drawn in

21 accordance with the petroleum laws, and we had envisaged

22 the prospect we were hoping to drill covered two of

23 those blocks, with a small extension of it into the

24 second. I think he's saying: "We'll give you the first

25 one and if you can prove it extends into the second you

1 can get the second." So it was a watering down of our

2 proposal.

3 Q. "The justification is that this will enable Government

4 to appraise Tullow's application in accordance with the

5 law."

6 Yes?

7 A. That's what he says.

8 Q. And what you understand by "in accordance with the law"

9 here, the answer that you have given is: "We will give

10 you the first one and if you can prove it extends into

11 the second you can get the second"?

12 A. Yes, in accordance with the law.

13 Q. Yes, in accordance with the law. Help me understand

14 what you mean here:

15 "If we can accept the comments [at 5255] made in

16 paragraphs 1, 2, 4 and 6 [we have just looked at 2, let

17 us forget about 4 and 6 for now] of the Minister's

18 letter as being made in good faith and just in

19 accordance with the law (a big leap of faith on our part

20 admittedly) ..."

21 Where is the big leap of faith?

22 A. I think I was referring to the fact that we were very

23 concerned about the two new production sharing

24 agreements we were to be given, and we had started off

25 by saying they should be in exactly the same terms as

1 previous ones we had been awarded apart from different

2 blocks, obviously, and different particular commercial

3 terms, they changed that to "similar" rather than "same"

4 and that potentially opened up a real can of worms for

5 us.

6 MR JUSTICE BURTON: I don't know that this is helping me,

7 Mr Qureshi.

8 MR QURESHI: Can we turn to 5306, please. Do you have this?

9 A. Yes.

10 Q. What we have behind this, 5306, is an extract from

11 Reshma Shah's notebook which relates to, it would

12 appear, some sort of a discussion -- Reshma Shah is not

13 giving evidence -- at 5306.01 on 12 January 2011 with

14 Oscar Kambona, and on page 5306.002, it is point 3:

15 "Combined section 106/108 notice should be treated

16 as and/or."

17 Do you see that?

18 A. Yes.

19 Q. Can you help us? What was this about?

20 A. I don't know. I wasn't party to that discussion.

21 Q. 5306, Alasdair Murray emailing Reshma Shah:

22 "Just looking at 108 again and reminding myself that

23 we would not be in possession of an asset in relation to

24 the completion adjustment payment."

25 These were monies that were to be paid out to

1 Heritage, yes?

2 A. That's right.

3 Q. This is after the 2 December notice has been received?

4 A. Yes.

5 Q. "You may remember we had a lengthy debate previously as

6 to whether or not a debt owed to Heritage under the

7 completion adjustment would fall within 108 and I think

8 we concluded that it would not as (1) a debt cannot be

9 properly categorised as an asset and (2) 106 exists,

10 therefore, if 106 doesn't apply (which presumably it

11 can't ...(Reading to the words)... so have to pay H."

12 Do you see that?

13 A. Yes.

14 Q. That was the real reason why payments that were due to

15 Heritage continued to be paid even after the

16 2 December 2010 notice was received, wasn't it?

17 A. I'm not sure. I certainly wasn't fully involved in

18 these discussions, but perhaps more simplistically

19 I still had it in my mind that if we owed money to

20 Heritage, if we had agreed the completion statement and

21 we owed money to Heritage, that could potentially fall

22 within the ambit of section 106/108. Clearly my

23 colleagues were having more detailed discussions than

24 I was involved in.

25 Q. Again you see a senior member of your legal team

1 concluding that there was no basis within 106 or 108 to

2 withhold payment to Heritage; isn't that what he's

3 saying?

4 A. That's what this says but it is in relation to the --

5 well --

6 Q. Isn't that what he's saying?

7 A. It would seem to.

8 Q. Yes.

9 MR JUSTICE BURTON: It is the completion adjustment payment

10 which is otherwise called the working capital, is that

11 it?

12 A. It's comprised of a few things, my Lord, but it would be

13 working capital and a few other things.

14 MR JUSTICE BURTON: This is not the 303 million?

15 A. The 283, no.

16 MR JUSTICE BURTON: So the other monies, lengthy debate as

17 to whether or not a debt owed to them would fall within

18 108, and it wouldn't, so debt can't be categorised as an

19 asset.

20 That is not the point we have been dealing with in

21 relation to the escrow account, is it?

22 A. No.

23 MR JUSTICE BURTON: And 106 of this, so if 106 doesn't

24 apply, which it doesn't, that means that 108 won't apply

25 ie -- so he was assuming that 106 and 108 were

1 disapplied if the debt was disputed.

2 A. He would -- I'm not sure he has gone that far. He

3 certainly says: if there is a dispute 106 doesn't apply,

4 and we don't hold an asset under 108 because of the

5 categorisation of a debt.

6 MR JUSTICE BURTON: He says: if 106 doesn't apply then 108

7 won't apply. There are two points here, aren't there?

8 The first point is possession, which applies to the

9 completion adjustment figures because you do possess

10 them but wouldn't apply to the escrow account if

11 Mr Kambona and Mr Mpanga were right, but then on

12 payability he is of the view that you are not caught by

13 106 or consequently by 108. Therefore, you can safely

14 pay, properly pay under 108, is that right?

15 A. I am struggling to interpret what he meant here,

16 my Lord. I don't really see what he means by: if 106

17 exists, this means that 108 won't apply.

18 MR JUSTICE BURTON: I am just looking at E/4933 which is

19 Mr Inch's thought processes. Mr Qureshi took us to it

20 earlier. If you can just go back to that E/4933. I

21 don't know whether it is this bundle.

22 MR QURESHI: E18.

23 MR JUSTICE BURTON: Mr Inch has a slightly different thought

24 process.

25 A. Could you give me the page reference again?

1 MR QURESHI: 4933.

2 MR JUSTICE BURTON: And it is under B:

3 "As Heritage has now appealed the assessment, our

4 understanding is we cannot now pay the estimated working

5 capital of 14 million to you [the Government] rather

6 than to Heritage as withholding under 106 cannot be made

7 where the tax payable is under dispute. On current

8 assumptions the 14 million will be paid to you on

9 5 January rather than the 7th as part of the 313 and the

10 point makes little difference even if the timetable

11 slips a bit."

12 Although there has been an appeal to the tax

13 tribunal against the 30 million assessment, the

14 30 per cent deposit has not been paid.

15 "If that deposit has not been paid is it the case

16 the assessment will become finally determined? If the

17 30 does become payable before the working capital is due

18 to be paid we would be pleased to pay it to you instead

19 on the basis of a letter confirming the assessment ..."

20 It does look as though there are all kinds of

21 different thoughts being put forward as to why you

22 weren't obliged to pay the working capital. You told me

23 a couple of days ago that the real reason was because

24 commercially you couldn't afford to take the risk?

25 A. That is exactly right, my Lord. I mean we were trying

1 to analyse the proper position. There were different

2 views but we certainly concluded at some point we could

3 not afford to take that risk. The Government were

4 expecting a certain amount of money. We thought it

5 would cause confusion if we paid even part of that in

6 advance and then we'd get lots of writs from Heritage.

7 It was just too confusing at that stage.

8 MR JUSTICE BURTON: There doesn't seem to have been any

9 joined-up thinking about the knock-on effect of the

10 argument that you either were or weren't going to take

11 on 106 and 108 vis à vis the escrow monies plus the

12 extra 30 compared with the approach you were taking in

13 relation to whether you could get out of paying over

14 the, or had to get out of paying over the working

15 capital.

16 A. I think there was a lot of confusion in our thinking,

17 my Lord.

18 MR QURESHI: Could we move back to bundle E19, page 5313.

19 That is a two-page letter to Engineer Onek, signed by

20 Mr Heavey at page 5314. The second and third paragraph.

21 The second:

22 "We very much appreciate the Government's effort in

23 trying to resolve the outstanding issues in relation to

24 the memorandum of understanding."

25 He is replying to the 23 December letter that

1 Mr Karuhanga had emailed to you on the 24th?

2 A. Yes.

3 Q. "We very much appreciate the Government's efforts ...

4 very pleased to confirm that Tullow is ready to make the

5 payments provided in the articles 1, 2 and 3 of your

6 last draft MOU.

7 "However, now having had the opportunity to discuss

8 these issues more fully internally with CNOOC and Total

9 there remain only two material [5313] issues to be

10 concluded which will then allow us to move forward with

11 the development: one in relation to the recognition of

12 the time lost in recent months and the impact that this

13 is having on the exploration and appraisal programme

14 envisaged by the contractor parties, and two in respect

15 of the Government's sliding scale valuation proposal in

16 respect of new discoveries in EA1 and EA3."

17 And then you have Mr Heavey proposing solutions in

18 paragraphs 1 and 2.

19 Was that right? Were those the two material issues

20 left to be resolved as of 14 January?

21 A. I believe so.

22 Q. Could I ask you then to turn to 5355. 5355, do you have

23 it?

24 A. Yes.

25 Q. This is a note of a teleconference with Tullow.

1 "Client: Tullow Uganda", 27 January; time, 9.30;

2 Mr Inch, Mr Murray, Miss Shah, Ronnie King, David

3 Salcedo; "Subject: Uganda."

4 Help us if you can. In terms of the

5 teleconferences, meetings with Ashurst and/or my learned

6 friend Mr Wolfson, it is right, is it, that you were

7 never personally present in any of the teleconferences

8 or in any meetings that took place?

9 A. I certainly didn't attend any of the meetings. I might

10 have been in one of the conferences. I don't recall.

11 Q. Could I ask you to look at -- this is 27 January, that

12 is the date of the file note -- page 10. We know what

13 Mr Wolfson has already said. We won't go back to that.

14 What I would like your assistance on is paragraph 8.

15 MR JUSTICE BURTON: You were going to show me, Mr Qureshi,

16 whether, and if so when, the 30 November document had

17 been supplied to Ashursts.

18 MR QURESHI: My Lord, I will.

19 MR JUSTICE BURTON: You are going to come to that.

20 MR QURESHI: It is referred to in instructions. I am coming

21 to it.


23 MR QURESHI: Paragraph 8 of this redacted note, do you see

24 it?

25 A. Yes.

1 Q. "RI [Richard Inch] responded that Tullow has obtained

2 [which means it is in the possession of] advice from

3 Ugandan lawyers that the 108 notice issued by URA is

4 binding on Tullow."

5 Do you see that?

6 A. Yes.

7 Q. Has obtained, is binding. Can you help us?

8 MR JUSTICE BURTON: Read the next sentence as well.

9 MR QURESHI: "Tullow Ugandan lawyers are of the opinion that

10 Tullow's rights against the funds held in escrow

11 constitute 'possession' of an asset belonging to

12 Heritage for the purposes of 108."

13 Pause there. Do you know what advice Mr Inch is

14 referring to there?

15 A. I believe he's referring to discussions with Mr Kabatsi.

16 Q. Paragraph 10.

17 MR JUSTICE BURTON: What advice of Mr Kabatsi?

18 A. Exactly as it says, my Lord.

19 MR JUSTICE BURTON: Which advice, when given?

20 A. The Gulu advice, the post Gulu advice, my Lord.

21 MR JUSTICE BURTON: We are talking about 30 November?

22 A. No, I think we are talking about the post Gulu meeting,

23 either Gulu or the following the day.

24 MR JUSTICE BURTON: An oral statement by him which led to

25 the at oddsness with his colleagues, the next day.

1 A. Yes, my Lord.

2 MR JUSTICE BURTON: That is what is being referred to?

3 A. I believe so but it is Mr Inch's notes, my Lord.


5 MR QURESHI: Paragraph 10: "RCK" -- which is Mr King?

6 A. Yes.

7 Q. "... stated in his view 108 was not applicable to

8 Tullow. 106 and 108 were intended to dovetail and were

9 not intended to ...(Reading to the words)... not 108.

10 In response RI [Richard Inch] stated that Tullow had to

11 make a commercial decision based on the fact that it had

12 been served with a notice from the Ugandan Government

13 requiring it to pay the tax and based on the advice

14 received from Tullow's Ugandan lawyers that the notice

15 was valid and binding on Tullow."

16 Just to be clear, is that so far as you are aware

17 a reference to Tullow Ugandan's lawyer's advice that

18 their notice was valid and binding on Tullow, was that

19 the post meeting in Gulu on the 18th, the meeting on the

20 19th or the document which is called the comprehensive

21 opinion of 30 November or something else?

22 A. I don't think it was something else. It would be

23 a combination of those three I'm thinking.

24 Q. Could we turn to 5381, please. 5381 is dated -- hence

25 it has been put in -- there are quite a few documents

1 backwards and forwards in terms of the chronology. This

2 is not a criticism but of course it is important to see

3 them in their proper context. The document was dated

4 31 January 2011, that is I assume when it was prepared.

5 Do you see it?

6 A. Yes.

7 Q. It is a note of a conference call with Mr Wolfson which

8 took place some five weeks before --

9 MR JUSTICE BURTON: Can you help in that case in relation to

10 5355 which has a similar rubric as to the date but it

11 doesn't say when the meeting was, if it was a meeting as

12 opposed to -- it is a teleconference. It doesn't say

13 when the teleconference was.

14 MR QURESHI: We have no idea.

15 MR JUSTICE BURTON: Are you able to help, Mr Wolfson -- that

16 is solicitors -- I was going to say from your diary but

17 you didn't take part in that. That is the solicitors'

18 conference.

19 MR WOLFSON: No, my Lord. I certainly was working on the

20 basis that the document at 5355 which bears the date of

21 27 January refers to a conversation at 9.30 on that day.

22 MR JUSTICE BURTON: In that case it is subsequent to the

23 meeting of 5381.

24 MR WOLFSON: Yes, I think that is the point my friend was

25 making that the document was put in to make it in

1 chronological order --

2 MR JUSTICE BURTON: I understand that, given that the other

3 one was dated later I thought perhaps this one was as

4 well. But 5355, the date of the note and of the

5 teleconference is the 27th.

6 MR WOLFSON: I am going to check that but that is certainly

7 my assumption.

8 MR JUSTICE BURTON: Thank you. So we are now going

9 backwards.

10 MR QURESHI: We are, my Lord, and that is my fault because

11 of course I looked at the date on the file note.

12 MR JUSTICE BURTON: As you rightly point out, that is wrong.

13 MR QURESHI: Yes. This is a call with Mr Wolfson at 2.10 on

14 20 December.

15 MR JUSTICE BURTON: I think much the most sensible thing is

16 for us actually, although it is still going to be out of

17 order, I think I am going to move this document to come

18 in before the solicitors' teleconference.

19 MR QURESHI: My Lord, we don't know why it took five weeks.

20 Again, this is not a criticism of Mr Salcedo who is in

21 court or anybody else at Ashursts. We can see on

22 page 5381 it appears that this is a draft document

23 because you have the text diagonally. Can you see it,

24 5381?

25 A. I can. Sorry, I thought you were asking his Lordship.

1 MR JUSTICE BURTON: Yes, draft is underneath the redaction,

2 yes.

3 A. Yes.

4 MR JUSTICE BURTON: There it is.

5 MR QURESHI: So we have here paragraph 6:

6 "Don't think 108 applies -- difficult to read 'in

7 possession of an asset' [I'm assuming that is

8 Mr Wolfson's advice] as including a debt you owe

9 someone. 'In possession' usually means of a physical

10 item. It is difficult to apply to a chose in action

11 plus fact that 106 is there suggest that 108 doesn't

12 apply to owing cash."

13 So that is the first point.

14 "RI -- for the purposes of 108 could say we are in

15 possession of legal interest in blocks, which still

16 belongs to H, (2) escrow funds?

17 "DW -- both quite difficult. If H has only legal

18 interest and thus no beneficial interest his interest is

19 probably of no value.

20 "Mr King -- Ashurst, Mr Wolfson saying 108 doesn't

21 apply. 106: problem. We know tax is disputed.

22 "14: AM [this is Alasdair Murray] URA says money in

23 escrow is in our possession."

24 Do you see that?

25 A. Yes.

1 Q. Where did Mr Murray get that from?

2 A. From his participation in the proceedings I'm presuming.

3 Q. Let us just pause there. Didn't Mr Murray ever go to

4 Uganda?

5 A. Yes.

6 Q. How often?

7 A. Quite a lot of times, half a dozen at least.

8 Q. Was he an attendee in meetings with the Ugandan revenue

9 authorities?

10 A. I'm sure he was in some.

11 Q. Would he have taken notes?

12 A. I don't recall, probably.

13 Q. Presumably if he took notes he was like Mr Inch and

14 Miss Shah and didn't destroy them, but are you saying,

15 Mr Martin, that where Mr Murray is saying, "URA says

16 money in escrow is in our possession", this is Mr Murray

17 reflecting an observation/comment that has been made to

18 him by somebody in the URA?

19 A. It may or may not be. We are trying to interpret notes

20 of a meeting at which certainly I wasn't present.

21 MR JUSTICE BURTON: It is common ground, isn't it, that that

22 was URA's position at all times?

23 A. Yes, my Lord.

24 MR JUSTICE BURTON: There is the error by Mr Kabatsi which

25 he has to explain to us, but apart from him everybody

1 surely makes the case that the URA from the beginning

2 have said: money in escrow is in your possession --

3 A. Yes, my Lord.

4 MR JUSTICE BURTON: -- because of the signatory point and

5 all that.

6 MR QURESHI: My Lord, it is important and we need to

7 understand that there is no evidence before your

8 Lordship of the URA having articulated the escrow

9 deeming.

10 MR JUSTICE BURTON: Not deeming. I'm sorry, I am reading

11 this as -- I may be wrong -- Mr Murray putting the case

12 against us; isn't that right?

13 A. Yes, my Lord.

14 MR JUSTICE BURTON: You and I are both reading it,

15 Mr Martin, but --

16 A. Yes, he's reflecting the consistent URA --

17 MR JUSTICE BURTON: The person who can help us is

18 Mr Wolfson, but URA says money in escrow is in our

19 possession and Mr Wolfson says that is inconsistent with

20 saying we paid money in escrow. I don't think there is

21 any deeming here at all.

22 MR QURESHI: My Lord, the escrow possession point we'll go

23 back if needs be but not with Mr Martin.

24 MR JUSTICE BURTON: I think that is not Mr Murray trying to

25 help anybody. He's pointing out the difficulty.

1 A. I agree, my Lord.

2 MR JUSTICE BURTON: Shall we have the break now?


4 MR JUSTICE BURTON: Can I just ask one question. During the

5 short break, if somebody could help me out on it,

6 paragraph 212 of the witness statement records against

7 it what must be a wrong reference E17/4562. I was

8 looking for the email -- I know we have not got there

9 yet but I am anticipating things, Mr Qureshi -- the

10 email from Miss Reshma Shah setting out KAA's

11 instructions which appear to have led to the

12 Kambona/Mpanga opinion of February is said to appear at

13 E/4562 but it doesn't. So if you could find it for me

14 that would be very helpful. Even better if it is in the

15 core bundle.

16 MR QURESHI: 5462, my Lord.

17 MR WOLFSON: 937 in the core, my Lord.

18 MR JUSTICE BURTON: Thank you very much.

19 MR WOLFSON: And the following page as well.

20 MR JUSTICE BURTON: That is fine. Good. In that case it is

21 written 4562 in my copy.

22 MR WOLFSON: It has been switched round.

23 MR JUSTICE BURTON: Good, half past 3.

24 (3.22 pm)

25 (A short break)

1 (3.30 pm)

2 MR QURESHI: Mr Martin, we were looking at the document

3 which began at 5381 and ends at 5383. Do you recall

4 whether or not this file note which is dated 31 January

5 was shared with you by Mr Murray?

6 A. No.

7 Q. Do you recall whether Mr Murray conveyed to you the gist

8 of the discussion or advice provided by Mr Wolfson on

9 20 December?

10 A. I don't specifically recall. I would be surprised if he

11 hadn't.

12 Q. Could I ask you, please, next to turn to --

13 MR JUSTICE BURTON: Are you leaving 5382?

14 MR QURESHI: My Lord, no. 5382, paragraph 16 of this

15 document, do you have it?

16 A. Yes.

17 Q. "Richard Inch -- unless we get [some] Ugandan advice

18 saying we're in possession, don't see on what basis we

19 can pay out."

20 Is this so far as you can help us, this is Mr Inch

21 reflecting the position as at 31 January that you didn't

22 have any such --

23 MR JUSTICE BURTON: 20 December.

24 MR QURESHI: 20 December, yes.

25 A. Yes. Sorry, I'm agreeing with you it is 20 December,

1 that's all.

2 Q. Did you have any advice from Uganda, Ugandan advice

3 saying you were in possession?

4 A. At that stage we had Mr Kabatsi's advice.

5 Q. So, again, let us go through this exercise. This is

6 Mr Kabatsi's advice because you were not sure, your

7 paragraphs 198 to 202 in your witness statement are an

8 amalgam you say of the situation towards the end of the

9 18 November and 19 November, so the advice that you were

10 referring to here of Mr Kabatsi?

11 MR JUSTICE BURTON: Well you're not referring to it here

12 though, are you? He's saying that you haven't had

13 advice or is suggesting it.

14 A. That is what Mr Inch is saying.

15 MR JUSTICE BURTON: And you say that he had. Mr Inch at

16 page 5356 appears to spell out, as we have been looking

17 at earlier, this is subsequent as we now know,

18 27 January, paragraph 8:

19 "RI responded that Tullow has obtained advice from

20 the Ugandan lawyers."

21 So did you obtain between the 20 December, when

22 you -- that unless you got some Ugandan advice saying we

23 are in possession we don't see on what basis we can pay

24 out on 20 December and on 27 January you had had it?

25 A. I didn't have any further discussions with the Ugandan

1 lawyers on this issue, my Lord, following the Mr Kabatsi

2 meetings and the document we referred to as the opinion.

3 MR JUSTICE BURTON: Or in particular between the 20 December

4 and 27 January.

5 A. No, these are not my notes.

6 MR JUSTICE BURTON: No.

7 MR QURESHI: Do you recall whether anybody had conveyed to

8 you the concerns that had been raised by Mr King or

9 Mr Wolfson?

10 A. I don't really. At this stage I was completely

11 preoccupied trying to keep our prospective partners in

12 line and to make sure we still had a deal.

13 MR JUSTICE BURTON: Mr Murray didn't report back?

14 A. Well, I find it strange to think he wouldn't have,

15 my Lord, but I don't recall any specific discussions

16 with him.

17 MR JUSTICE BURTON: Mr Murray apparently said that URA were

18 saying that money in escrow is in our possession.

19 Mr Wolfson says, well that's odd. And Mr Inch says

20 unless we can get some Ugandan advice saying we are in

21 possession I don't see on what basis we can pay out.

22 Mr King thinks that's extremely unlikely.

23 A. I was aware of the themes coming out of these meetings.

24 I'm just not sure who told me. I don't think I saw

25 these file notes, but I was certainly aware that the

1 English advice was that we were not in possession of the

2 escrow account.

3 MR QURESHI: Can we turn to 5359, please which, if we see

4 the preceding page, 5358 is a note sent by Mr King to

5 Alasdair Murray by email on Friday, 28 January. Can you

6 see that?

7 A. Yes.

8 Q. 10.36 in the morning. Payment of tax in relation to the

9 Heritage transaction. E19/5358.

10 A. Yes.

11 Q. "Please see attached, regards Ronnie King."

12 28 January by email and post. So this is the day

13 after it would appear the teleconference on 27 January,

14 if the note is an accurate reflection of

15 the teleconference having taken place on 27 January in

16 the morning. It says:

17 "Dear Alisdair, payment of tax in relation to

18 Heritage transaction.

19 "I take it from our discussions that where the

20 amount of tax is disputed [because there are redactions

21 here] the position in Uganda is that the tax is payable

22 pending the determination of that dispute. That would

23 ...(Reading to the words)... Richard's understanding of

24 the status of opinion made pursuant to a section 108

25 notice demand in circumstances where the taxpayer

1 (Heritage) has disputed the amount of tax, namely that

2 it is a form of security fund which it held pending

3 final determination of a challenge by the taxpayer."

4 Do you see that?

5 A. Yes.

6 Q. So there is no difference of opinion here on that point

7 with Mr Inch so far as Mr King is concerned, correct?

8 A. It would seem to suggest that, yes.

9 MR JUSTICE BURTON: That is the payment point.

10 A. I believe it is, my Lord.

11 MR QURESHI: Over the page. Paragraph 1, the first line is

12 redacted. I can't say any more about that at this

13 point.

14 "First, they may argue that a section 108 notice is

15 not valid given the nature of the escrow arrangement.

16 I understand you have received Ugandan legal advice

17 which indicates that a section 108 notice would still be

18 valid as a matter of Ugandan law notwithstanding the

19 escrow."

20 Pause there. This Ugandan legal advice, can you

21 help us, it's the Kabatsi advice?

22 A. As far as I was aware. I'm not sure whether my

23 colleagues had had other discussions with KAA but that

24 would be my understanding.

25 Q. This is 28 January. What appears to be the case in this

1 context is Mr King in using legalese is suggesting that

2 you, you Tullow, have informed Mr King that you have

3 received Ugandan legal advice but as of 28 January

4 whatever this legal advice is, Mr King hasn't seen it

5 yet?

6 A. That would suggest that, yes.

7 MR JUSTICE BURTON: You are not suggesting you have had

8 legal advice on the payable point?

9 A. No, my Lord.

10 MR QURESHI: To answer my Lord's question about when the

11 Kabatsi late retired Justice Mulenga joint opinion was

12 sent to Mr Wolfson, 5415, the instructions to

13 Mr Wolfson. Do you see it?

14 A. Yes.

15 Q. "Instructions to David Wolfson to advise in consultation

16 at 2.15 on 4 February 2011."

17 Heavily redacted. Page 5420, paragraph 13, first

18 part redacted.

19 "Instructing solicitors and leading counsel have

20 advised Tullow of their concerns that section 108 of the

21 Ugandan Income Tax Act is inapplicable (see the draft

22 note of the teleconference on 20 December)."

23 We have seen that.

24 "And the draft note of the telephone conference on

25 27 January."

1 So it took place on the 27th.

2 "Tullow accepts that section 106 is inapplicable in

3 the present circumstances as Tullow is aware that

4 Heritage has challenged all the tax assessed to it in

5 relation to the transaction. However, Tullow has

6 received advice from its Ugandan lawyers that Tullow is

7 in possession of an asset belonging to Heritage for the

8 purposes of section 108 ITA by virtue of Tullow's rights

9 pursuant to the escrow account (see the third paragraph

10 on page 2 of the letter of advice from Kampala

11 Associated Advocates at tab 4)."

12 Pausing there. That is the Kabatsi/Mulenga piece of

13 paper, isn't it?

14 A. That would suggest that, yes.

15 Q. I say piece of paper. I don't wish to be derogatory or

16 demeaning to Mr Kabatsi who is in court, but there is no

17 advice there on this particular issue, is there?

18 A. It doesn't read like that.

19 Q. It doesn't read like that because there is no advice on

20 that particular issue, is there?

21 A. That we had received advice from him, post Gulu.

22 Q. Is there any reference here in these instructions to

23 Mr Wolfson to any other Kabatsi advice?

24 A. No.

25 Q. The reality is that the Kabatsi advice or the Ugandan

1 law advice that Mr Inch and Tullow have been referring

2 to throughout is the Kabatsi piece of paper, isn't it,

3 30 November?

4 A. I wouldn't have said that. I would have said it is that

5 plus the clear view we had from Mr Kabatsi at the

6 meeting in our office on 19 November.

7 Q. Which you didn't take a note of, which is conspicuously

8 absent from the Kabatsi piece of paper called the

9 comprehensive opinion which you never sought

10 confirmation of or clarification of at any stage. When

11 I say you I mean you or any one of the seven lawyers in

12 your legal team or Mr Inch or anybody else for that

13 matter. Do you agree?

14 A. Yes, I do agree. I think, as I explained, I was

15 completely distracted by everything else that was going

16 on and left that issue for the time being.

17 MR JUSTICE BURTON: The next sentence, can you help us about

18 that?

19 "Tullow also believes that as the Government has not

20 given its unconditional consent to the transaction, the

21 legal interest in blocks 1 and 3A remains vested in

22 Heritage and Tullow holds that interest on trust for

23 Heritage. Tullow believes this may also constitute

24 possession of an asset belonging to Heritage for the

25 purposes of section 108."

1 A. I think that was an idea we had, my Lord.

2 MR JUSTICE BURTON: Had you ever heard of that before?

3 A. I have seen the argument being put forward. I don't

4 think it --

5 MR JUSTICE BURTON: Where?

6 A. It was somewhere. It was in our thinking at the time

7 that's another possible Heritage asset that we had in

8 our possession.

9 MR JUSTICE BURTON: I have not seen it anywhere. Was it

10 advised on by Mr Kabatsi?

11 MR WOLFSON: My Lord, it is in the documents.

12 A. It is in the documents.

13 MR WOLFSON: It is in the documents we were just looking at,

14 my Lord, earlier.

15 MR QURESHI: Mr Inch referred to it.

16 MR WOLFSON: It is in that paragraph 8, my Lord, at 5356.

17 MR JUSTICE BURTON: I think I ought to be referred to that

18 otherwise I'll miss it.

19 A. I think it was an idea that was dismissed quite easily,

20 my Lord.

21 MR JUSTICE BURTON: Sorry, paragraph 8.

22 MR WOLFSON: Also in the earlier documents.

23 MR QURESHI: "RI also noted" -- my Lord, I read --

24 MR JUSTICE BURTON: I suppose I might ask the same point

25 which is: where does that come from?

1 MR WOLFSON: It goes back even earlier, my Lord. It goes

2 back to the earlier document.

3 MR JUSTICE BURTON: Which is 20 January.

4 MR WOLFSON: 20 December, my Lord, 5381 which if your

5 Lordship moves back. The bottom of the page,

6 paragraph 7:

7 "RI -- for the purposes of section 108 could we say

8 that we are (1) in possession of a legal interest in

9 blocks which still belongs to H. (2) escrow funds?"

10 That appears to be the genesis of the point,

11 my Lord .

12 MR JUSTICE BURTON: So that is the genesis. The purpose of

13 section 108 could say we are -- I see.

14 MR QURESHI: Then there is a question mark and then of

15 course for the sake of completeness my learned friend's

16 answer is over -- both quite difficult.

17 MR JUSTICE BURTON: Yes, I follow. So that is where that

18 first emerges. It is then repeated:

19 "RI noted that Tullow believes there may be an

20 argument" at paragraph 8. And now we have: "Tullow also

21 believes that".

22 So it is from something with a question mark, it has

23 become a maybe arguable into a belief. But there is

24 nowhere else that I have seen it. You don't know of

25 anywhere?

1 A. It was an idea going round.

2 MR JUSTICE BURTON: Was it raised with you?

3 A. Yes, it was. I can't remember what I thought about it.

4 I didn't think it was the most convincing argument at

5 the time.

6 MR QURESHI: Was it raised by Mr Inch?

7 A. In what context?

8 Q. Is he the brains behind this because he's the one who

9 raises it as a question?

10 A. I don't know who first raised it. These are the kind of

11 issues that you maybe brainstorm in a group of people.

12 MR JUSTICE BURTON: Then it says:

13 "Instructing solicitors are concerned that the

14 Ugandan advice received by Tullow is unconvincing.

15 Difficult to consider the funds in arrears as being in

16 Tullow's possession and the legal interests are title

17 without any value."

18 But there it is. You had this reported back to you?

19 A. I believe I would have done, my Lord. I don't believe

20 I have seen these minutes before -- at the time.

21 MR JUSTICE BURTON: You don't believe you saw the notes?

22 A. Not at the time, my Lord, no.

23 MR QURESHI: Who would have reported it back to you,

24 Mr Murray?

25 A. Yes, more than likely.

1 Q. When you would have received this given that instructing

2 solicitors were concerned and unconvinced and the phrase

3 "concern" has been repeated from December through

4 to January and now February, would that have generated

5 concern for you if this had been relayed to you?

6 A. Yes.

7 Q. And how would you have assuaged that concern?

8 A. I think the view was we needed more definitive advice

9 from Kampala on the issue.

10 MR JUSTICE BURTON: Until you got it what was your state of

11 mind?

12 A. I probably was a bit confused. There was very strong

13 legal advice to the effect that we weren't in

14 a possession of an asset. Our understanding was that

15 the Ugandan advice was to the contrary but obviously we

16 accept that the Kabatsi/Mulenga opinion was not

17 a detailed analysis of the issues and at some point --

18 I forget the date -- we instructed KAA to give a more

19 definitive opinion.

20 MR JUSTICE BURTON: I am sorry, you said "we obviously

21 accept that the Kabatsi/Mulenga was not a detailed

22 analysis of the issue". You accept that now. Did you

23 accept it at the time?

24 A. I was, as I say, my Lord, preoccupied with lots of other

25 issues. I wasn't giving detailed thought to that

1 particular issue at the time.

2 MR QURESHI: We know what you say in your witness statement,

3 Mr Martin, about this being the turning point. You have

4 a team of or you had a team at the time of seven lawyers

5 in Tullow Legal and what you are saying is that whilst

6 you were distracted, confused, is it really the case

7 that none of the other lawyers was able to read that

8 Mr Murray who had been sent that opinion wasn't able to

9 provide you with his analysis, cursory review and

10 Mr Inch who was sent that opinion and who seems to have

11 referred to it again and again and again as providing

12 the basis to suggest that the notices are valid and

13 binding, weren't able to provide you with --

14 A. Clearly we felt we had to get that from Uganda.

15 Q. But you accept, do you, that where the Ugandan advice

16 which is the Kabatsi advice which we know is the written

17 piece of paper, 30 November, where that is being

18 referred to there is nothing in there about the notices

19 being valid or binding. It provides no basis for that

20 proposition. And thus as at 4 February you had no legal

21 advice from any Ugandan lawyer that the notices were

22 valid or binding, let alone that you were likely to be

23 held in possession of an asset?

24 A. No, I don't accept that. Mr Kabatsi was quite clear

25 post Gulu that the URA's position would be followed by

1 Ugandan court.

2 Q. Quite clear, emphatic?

3 A. I'm not sure about emphatic. It was clear enough to me

4 because I think, as I said earlier, it was quite

5 a depressing thing to hear both on that and on the other

6 Ugandan court issues we were considering.

7 Q. It was clear enough to you in the aftermath of the Gulu

8 meeting, which must have been tiring, a conversation you

9 have on the 18th when you are looking for a hotel?

10 A. And the following day.

11 Q. Yes, and the following day, and in fact he'd stated it

12 so clearly that when he sent you an opinion on

13 2 December, which says nothing of the sort, you don't

14 feel there was any need to ask him for clarification or

15 confirmation; is that right?

16 A. I didn't because I was dealing with other things at the

17 time.

18 Q. Because when Mr Kabatsi put pen to paper,

19 metaphorically, he said nothing of the sort, did he?

20 A. He wasn't as clear in that piece of paper as he had been

21 post-Gulu.

22 Q. No, forgive me, Mr Martin. It is not about him not

23 being as clear on that piece of paper. That piece of

24 paper says nothing on the Heritage issue with regards to

25 Mr Kabatsi's own opinion, does it?

1 A. I accept the 30 November letter wasn't an opinion as

2 such.

3 Q. No, it says nothing about the Heritage issue on the part

4 of Mr Kabatsi and his opinion, does it?

5 A. Well, it clearly has a paragraph or two which talks

6 about the Heritage issue but, as I said earlier,

7 I accept that it is not a formal opinion.

8 Q. Can we turn to --

9 MR JUSTICE BURTON: I want to come back to your answer to me

10 at page 169:

11 "Our understanding was that the Ugandan advice was

12 to the contrary but obviously we accept that the

13 Kabatsi/Mulenga opinion was not a detailed analysis of

14 the issue."

15 A. Sorry, my Lord, did I say Ugandan advice to the

16 contrary? Are you reading from the transcript?

17 MR JUSTICE BURTON: "Our understanding was that the Ugandan

18 advice was to the contrary ..."

19 A. Yes, sorry.

20 MR JUSTICE BURTON: "... but obviously we accept that the

21 Kabatsi/Mulenga opinion was not a detailed analysis of

22 the issues."

23 Then you say:

24 "At some point we instructed KAA to give a more

25 definitive opinion."

1 A. Yes, my Lord.

2 MR JUSTICE BURTON: Until you got a more definitive opinion,

3 what was your state of mind? You presumably must

4 have -- are you now saying that you got a more

5 definitive opinion because you didn't have

6 a satisfactory answer without it or is this something

7 you are saying in retrospect?

8 A. There was certainly concern that the English advice, and

9 frankly my own feeling was that we could not -- this

10 escrow account could not qualify as deeming us to be in

11 possession of an asset.

12 MR JUSTICE BURTON: And you hadn't had any advice on the

13 payable point?

14 A. No, my Lord.

15 MR JUSTICE BURTON: Right. Without the payable point, the

16 possession wouldn't do you any good. You needed to win

17 on both arguments, didn't you?

18 A. I'm not sure.

19 MR JUSTICE BURTON: If the tax wasn't payable, it didn't

20 matter --

21 A. Sorry, yes.

22 MR JUSTICE BURTON: -- whether you did have possession. You

23 had to win or rather lose on both points.

24 A. Yes.

25 MR QURESHI: 5427, bundle 20. Do you have this?

1 A. Yes.

2 Q. This is from Oscar Kambona, Wednesday, 9 February to

3 Reshma Shah, "Advice on section 108 Income Tax Act.

4 Tullow Oil document":

5 "Hi Reshma, attached is the write up on section

6 108."

7 The subject says it is an advice.

8 "Kindly peruse and advise whether we need to make

9 adjustments."

10 When a lawyer is giving advice, what do you envisage

11 being adjustments to the advice?

12 A. Whether or not they have got the facts correct, I'm

13 guessing.

14 Q. If we can turn over to 5428, this is "Advice on

15 section 108 Income Tax Act", 9 February:

16 "We refer to your email requiring us to provide an

17 opinion on the status of a payment made under

18 section 108 of the Income Tax Act."

19 MR JUSTICE BURTON: Where do you get 9 February from?

20 MR QURESHI: Forgive me, my Lord, 9 February is on the cover

21 email.

22 MR JUSTICE BURTON: I see.

23 MR QURESHI: The queries to discuss email is at E19/5413.

24 MR JUSTICE BURTON: In the previous bundle?

25 MR QURESHI: My Lord, yes, just for completeness. E19/5413;

1 do you see this?

2 A. Yes.

3 Q. "Queries to discuss on Monday", so that is 7 February:

4 "Oscar ... some of the issues we would like to

5 discuss on the call on Monday."

6 Heritage has filed an appeal, tax currently in

7 dispute.

8 "We would therefore like to understand the status of

9 a payment made under a section 108 notice. Does the

10 section 108 payment settle the liability of the taxpayer

11 as assessed (of course subject to final resolution of

12 the amount ...)

13 "Does a section 108 notice ...(Reading to the

14 words)... Is the amount of difference refundable?"

15 Who would get the refund?

16 "Note 131 million was paid in effect by Heritage as

17 a withholding by Tullow from the sale proceeds ...

18 "4. Section 108(6) provides that 'an amount due ...

19 is treated for the purposes of the Act as if it were tax

20 due'.

21 "What is the implication ...

22 "Please let me know when would be convenient to

23 speak. I will be in Uganda but Richard might dial in

24 from London."

25 That is the precursor. There is a conference call

1 it seems on the Monday, 7 February, and then we have

2 this, which is called an "opinion" sent on the

3 Wednesday, 9 February and it is called an "advice". So

4 it is called an "opinion" and an "advice":

5 "We have perused the various legislative provisions

6 and advise as follows ..."

7 108, we have the text. The next paragraph:

8 "We understand that Tullow is being required to make

9 a payment to the URA in respect of tax assessment ...

10 under 108."

11 Payment is deemed to settle liability of the

12 taxpayer.

13 "The tax paid is charged to the taxpayer upon whom

14 the assessment is issued and this is so because the

15 amount paid under the section 108 notice is deemed to be

16 funds belonging to the non-resident taxpayer in

17 possession by any person required to make the payment."

18 Can you help me understand what that means. Do you

19 know what that means?

20 A. I can't immediately see, no.

21 Q. Let us read it again:

22 "The tax paid is charged to the taxpayer upon whom

23 the assessment is issued and this is so because the

24 amount paid under the section 108 notice is deemed to be

25 funds [that word again] belonging to the non-resident

1 taxpayer in possession by any person required to make

2 the payment."

3 So let us look at it again. Can you help me

4 understand what that means?

5 A. I'm taking it to mean that the payment under the 108

6 notice discharges the --

7 MR JUSTICE BURTON: I think it must be credited, mustn't it?

8 The tax paid is credited to the taxpayer rather than

9 charged to him.

10 A. Deemed to be tax paid by the taxpayer.

11 MR JUSTICE BURTON: But that doesn't help anybody. It is

12 just a statement of fact.

13 MR QURESHI: No. Over the page:

14 "The refund is payable to the party that made the

15 payment under 108 but the situation could be complicated

16 by the fact that Heritage paid 30 per cent of the tax in

17 dispute and therefore it is difficult to apportion which

18 amount is being refunded."

19 MR JUSTICE BURTON: Yes, that is nonsense too, isn't it?

20 MR QURESHI: It is, my Lord.

21 MR JUSTICE BURTON: Because the 308 is net of the

22 30 per cent which has already been paid.

23 MR QURESHI: Indeed, my Lord.

24 "However, [this is an opinion, not an advise] we

25 opine that the issue of overpayment of tax would not

1 arise since the dispute over the assessment is not in

2 respect of the quantum but rather on the principle

3 whether the full amount is due and payable."

4 Can you help me understand that?

5 A. No.

6 Q. The next paragraph:

7 "Another issue for concern is whether URA upon

8 receipt of the full amount of tax from Tullow could

9 decide to withdraw from the court proceedings."

10 This has obviously been a concern that has been

11 looming large throughout.

12 "If such a situation arises it would imply that

13 Heritage would be entitled to judgment and in which case

14 the assessment would be nullified. This would mean that

15 the full amount assessed is refundable. We therefore do

16 not think that URA can withdraw from the proceedings.

17 Equally so, if Heritage were to withdraw from the

18 proceedings, then the assessment would be confirmed as

19 due and payable by Heritage. In such a situation,

20 Tullow would be entitled to access the funds in escrow

21 on the grounds that the assessment has been confirmed as

22 payable by a court of law. We therefore do not think

23 that Heritage will consider withdrawing from the

24 proceedings in court."

25 That seems fairly clear, doesn't it?

1 A. Yes.

2 Q. This is just an assessment of what the Ugandan

3 authorities might do and what Heritage might do, yes?

4 A. Yes.

5 Q. "The question that remains is how Tullow will be able to

6 enforce a decision of the court in the event that

7 a decision is made in favour of Heritage. We advise

8 that upon payment of the 70 per cent of tax due from

9 Heritage, Tullow should apply to the court to be joined

10 as a third party to the proceedings on the grounds that

11 it has an interest on the outcome of the case."

12 This is the tax appeal proceedings, isn't it?

13 A. Yes.

14 Q. "It would have to prove to the court that it has paid

15 funds on the basis of 108 and therefore would be

16 interested in the outcome of the matter."

17 If you recall, you did apply to be joined to those

18 proceedings but the Tax Appeal Tribunal refused your

19 application to be joined in those proceedings, didn't

20 it?

21 A. That's right.

22 Q. "Once it is joined to the proceedings then if the court

23 decides that the assessment is valid, Tullow would apply

24 that the court orders for a refund to be made for funds

25 paid under 108.

1 "On the other hand, should the court find merit in

2 the arguments of URA and confirm the assessment and

3 such ..."

4 MR JUSTICE BURTON: We don't need to read the rest.

5 MR QURESHI: No.

6 MR JUSTICE BURTON: It hopes that you would find the opinion

7 useful. Did you find the opinion useful?

8 A. I wasn't concentrating on this opinion much, my Lord, at

9 the time. As I say, I was dealing with other issues.

10 I felt my colleagues had found it useful, yes.

11 MR QURESHI: Sorry, you felt your colleagues had found it

12 useful but forgive me, I'm not being flippant, was that

13 50 yards away from the legal department through three

14 doors? How did you feel this?

15 A. No, there would have been some discussions around the

16 advice we were receiving.

17 Q. Hang on. There would have been or there were some

18 discussions?

19 A. I don't recall specific discussions.

20 Q. You don't recall specific discussions. So when you are

21 saying you felt your colleagues had found it useful,

22 yes, this is pure speculation on your part, isn't it?

23 A. I'm not sure it is speculation but I can't refer you --

24 MR JUSTICE BURTON: Did it, does it help on either of the

25 two bases upon which it had been said by Mr Kambona and

1 Mr Mpanga that the notice was clearly invalid, either

2 payability or possession?

3 A. I'm struggling to understand it now, my Lord, and see

4 how it helped.


6 MR QURESHI: 5458, Mr Martin is an update, 15 February.

7 I hope my learned friend isn't going to misinterpret my

8 reference to this email. This is an email that was sent

9 to you by Mr Demetriou on 15 February at 9.50 am.

10 "Update from Martin Shearman and His Excellency

11 meeting", to Brian Glover, Tim O'Hanlon, Aidan Heavey,

12 yourself, Elly Karuhanga and Patrick Bitature:

13 "Martin called me yesterday afternoon and confirmed

14 he had seen President Museveni on a separate matter but

15 managed to take the opportunity to ask after our

16 approval and I met him last night as follows ..."

17 Of course, as you indicated earlier, he was being

18 helpful:

19 "Martin asked as to the status of the 'Tullow

20 approval'. His Excellency ...(Reading to the words)...

21 and I will give it to them.'"

22 That is all in quotes:

23 "His Excellency went on to say that there were no

24 issues with Tullow and that he will approve all our

25 requests via a letter to the Minister once he has

1 completed some other pressing issues. I asked Martin if

2 he [ie His Excellency] appeared well informed and

3 focused upon the question to which he [Martin Shearman,

4 the High Commissioner] replied that the President was

5 very focused and used all the correct terminology and

6 appeared to be current and up to date.

7 "The next question for us is a matter of timing and

8 how we proceed with attaining our approval ..."

9 MR JUSTICE BURTON: I have read all the next paragraph, yes.

10 What is it you are wanting to put?

11 MR QURESHI: Mr Martin, as of 15 February, the position

12 internally within Tullow and as far as you are aware is

13 that the only issue now is: "When do we sign off?",

14 correct?

15 A. Yes.

16 Q. 5460, please. Richard Inch to Reshma Shah:

17 "Reshma, when you have had a chance could you follow

18 up with Oscar on the position with the URA defence

19 filing. It seems we are now close to finalising. We

20 also need something from him confirming liability under

21 section 108 but perhaps you could discuss that with

22 Alasdair."

23 "We also need something from him confirming

24 liability under section 108." If you could help me,

25 just reading that as a lawyer and as general counsel of

1 Tullow, what Mr Inch is saying couldn't be clearer,

2 could it, that "What we require is Mr Kambona to provide

3 us with something", in writing, I assume, "confirming

4 liability under section 108."

5 That is what he's saying, isn't he?

6 A. That's how you would read it, yes.

7 Q. "I am not sure how he wants to cover the gap between the

8 283-WC ..."

9 MR JUSTICE BURTON: "Plus working capital."

10 MR QURESHI: Sorry, I didn't see the plus:

11 "... plus working capital versus the 313."

12 Can you help us on that?

13 A. Not much more than any reader of this. It's: how is the

14 difference covered between 283 and 313?

15 Q. 5462 is an email from Mr Paul Watkins -- sorry, 5461,

16 forgive me. "Confidential: discussion on Jobi Rii Ngiri

17 extensions."

18 Can you help us with what that means?

19 A. They are fields we had discovered in Block 1 in Uganda.

20 Q. Wednesday, February 16th, which is the same day,

21 a couple of hours later, Alasdair Murray is copied. Who

22 is Paul Watkins?

23 A. He was on the operational side in Uganda.

24 Q. "I spoke with Paul McDade ..."

25 He is the chief operating officer, yes?

1 A. Yes.

2 Q. "He said the Exec ..."

3 Who is Exec? That is the executive of Tullow?

4 A. Yes.

5 Q. Including you?

6 A. Yes.

7 Q. "... believed that the President has blessed the MOU."

8 Yes?

9 A. Yes.

10 Q. "What they expected to happen now was that the President

11 would talk to Minister Onek and the Minister would

12 ...(Reading to the words)... saying 'great' and

13 attaching the final form of the MOU attaching the URA

14 and PEPD side letters asking the Minister to confirm

15 that they agreed they were in a final form and ready to

16 be signed. There may then be a bit of to and fro-ing

17 but once agreement on the documentation has been reached

18 then Tullow would mobilise its team to go to Uganda and

19 sign.

20 "Paul thought that there might be an opportunity to

21 attach the letter requesting the extension to the

22 package above."

23 Then a redaction, a substantive paragraph, and then:

24 "So clearly timing is of the essence here."

25 Again, the point is, so far as Tullow is concerned,

1 everything is on track, it is just a question of

2 signing.

3 MR JUSTICE BURTON: I can't see the President blessing.

4 Where is that?

5 MR QURESHI: It is 5461.

6 MR JUSTICE BURTON: I don't have 5461.

7 MR QURESHI: You don't have 5461?

8 MR JUSTICE BURTON: Not in the core bundle.

9 MR QURESHI: My apologies, my Lord.

10 MR JUSTICE BURTON: You referred to 5462 and that is in the

11 core bundle. Can I just quickly read it to myself.

12 (Pause). Yes, thank you.

13 MR QURESHI: Over the page, 5462, this is Reshma Shah to

14 Oscar Kambona, Wednesday, 16 February, 2.21:

15 "Hi Oscar, opinions as discussed.

16 "As discussed on the call earlier today we should be

17 grateful if you would assist us with the following

18 formal opinions ..."

19 MR JUSTICE BURTON: Can I just be reminded, Reshma Shah is?

20 MR QURESHI: International tax manager.

21 MR JUSTICE BURTON: She is not a lawyer?

22 A. No, my Lord.

23 MR JUSTICE BURTON: But she was asked by Mr Inch at

24 page 5460, core bundle 936, to "follow up with Oscar on

25 the position with the URA defence filing. It seems we

1 are close now to finalising."

2 I am so sorry, I am taking you back I know, but 5460

3 what was the URA defence filing? Mr Inch asked Reshma

4 to follow up with Oscar on the position with the URA

5 defence filing.

6 A. I can't immediately recall what that meant in that

7 timeline.

8 MR JUSTICE BURTON: "It seems we are close now to

9 finalising", that is the MOU.

10 "We also need something from him confirming

11 liability under 108 ..."

12 You have been asked about confirming and of course

13 this isn't your email anyway, "... and covering the

14 gap."

15 But do you know about needing something?

16 A. As I said, my Lord, I think we were looking for a formal

17 opinion.

18 MR JUSTICE BURTON: Because?

19 A. Because the advice we had had up to now, while

20 I believed the advice, it wasn't formalised. It wasn't

21 extensive, analysed.

22 MR JUSTICE BURTON: And so you needed advice, is this it?

23 A. Yes, my Lord.

24 MR JUSTICE BURTON: You don't say that in your witness

25 statement. You are clear about that?

1 A. As I say, I wasn't intimately involved with all the

2 discussions with KAA at that point but I knew we were

3 looking to formalise the advice, yes, my Lord.

4 MR JUSTICE BURTON: Anyway, here we have it, here we have

5 the instructions.

6 MR QURESHI: And we have -- the usual phrase, Mr Martin --

7 more flesh on the bones in terms of what it is that you

8 are asking for.

9 5462, Reshma Shah to Oscar Kambona, she is dutifully

10 obeying the edict given by her superior, Mr Inch. She

11 is cc'ing Alasdair Murray, who is a senior lawyer in

12 Tullow legal, correct?

13 A. Yes.

14 Q. "Opinions as discussed.

15 "Hi Oscar, as discussed on the call earlier today we

16 should be grateful if you would assist us with the

17 following formal opinions:

18 "(1) Whether Tullow is in possession of an asset,

19 including money, belonging to Heritage for the purposes

20 of a section 108 notice. We should be grateful if you

21 would consider the escrow account, the amount owed to

22 Heritage as part of the completion process and also any

23 other assets such as the legal ownership of the

24 interests in EA1 and 3A.

25 "(2) Status of a payment made under a section 108

1 notices and also the implications if Heritage and/or the

2 URA pull out of the CGT case filed at TAT either before

3 or after the 313 million payment is made by Tullow to

4 the URA under a section 108 notice.

5 "As discussed on the call [this is the flesh on the

6 bones], we need these opinions for our lawyers here in

7 London to assist in recovering from Heritage the amount

8 paid ..."

9 So this is in respect of the lawyers who were

10 sitting in London, Messrs Ashurst, who are sitting here

11 now, for I assume these very proceedings, correct?

12 A. In anticipation of making a claim, yes.

13 Q. "... and also for our executives who will rely on these

14 opinions to support their decision to make the 313

15 payment."

16 Yes? Let us not forget the executives?

17 A. Yes.

18 Q. Which includes you?

19 A. Yes.

20 Q. "We would therefore need the opinions to be as

21 comprehensive as possible and to refer to all Ugandan

22 law references, relevant case law, statutory instruments

23 precedence, et cetera."

24 As if the request was not emphatic enough, over the

25 page, at 5463, we see Miss Shah copying this time

1 Mr Inch and Mr Kabatsi and Elly Karuhanga and David

2 Mpanga in addition to Oscar Kambona, at 7.28 the same

3 evening:

4 "As discussed on our call earlier today ..."

5 Whether that was the call before the 2.21 email or a

6 subsequent call we don't have Miss Shah here, but

7 certainly at least one call, or possibly two calls:

8 "... below is a summary of the scope of the two

9 opinions requested:

10 "Opinion 1: whether Tullow is in possession of an

11 'asset' belonging to Heritage under 108 and as a matter

12 of Ugandan law.

13 "In respect of the 313 million payment Tullow would

14 be looking to claim under the indemnity provisions in

15 the SPA ..(Reading to the words)... To support this

16 claim we should be grateful if you would consider with

17 reference to any legal basis under Ugandan law,

18 including any case law or practice notes, whether the

19 following could be argued to be (a) an asset belonging

20 to Heritage and (b) in Tullow's possession for the

21 purposes of 108:

22 "(i) Escrow account.

23 "(ii) Amount owing to Heritage as part of the

24 completion process ...(Reading to the words)... of the

25 SPA.

1 "(iii) Any other assets, including interests in EA1

2 and 3A, and rights and obligations in the SPA ...

3 "For the purposes of this opinion it is important

4 that we put ourselves in the URA's shoes and also

5 consider the arguments they have forward in reaching the

6 position that Tullow is in possession of assets

7 belonging to Heritage."

8 Pause there. It is right, isn't it, that there is

9 nothing in the evidence reflecting any arguments that

10 the URA ever put forward vis à vis the position that

11 Tullow is in possession of assets belonging to Heritage?

12 A. Well, except the consistent line they took that these

13 notices were valid and --

14 Q. But there is nothing -- forgive me, I may not have made

15 myself clear -- there is nothing in the evidence

16 reflecting any arguments that the URA ever put forward

17 vis à vis the position --

18 A. Sorry, arguments, no.

19 Q. There isn't, is there?

20 A. No.

21 MR JUSTICE BURTON: But that was their argument at all

22 times, Mr Qureshi, wasn't it? They may not have backed

23 it up, or we haven't heard how they backed it up, but

24 the URA's argument was that the escrow account should be

25 regarded as an asset belonging to Heritage.

1 MR QURESHI: No, my Lord, that's --

2 MR JUSTICE BURTON: Because of the signatories.

3 MR QURESHI: No, my Lord. That is the Mpanga whizz point of

4 the 19th/20th --

5 MR JUSTICE BURTON: Not the deemed point, but leaving aside

6 the deemed they asserted that the escrow account was in

7 the claimant's possession.

8 MR QURESHI: No, my Lord, if I have overlooked any evidence

9 in which the URA articulated this position then I stand

10 to be corrected. But, my Lord, no, that was not

11 a position that was ever articulated by the URA.

12 MR JUSTICE BURTON: We may need to analyse it. That is

13 certainly my understanding. It was disagreed with from

14 the beginning by Mr Mpanga and Mr Kambona because they

15 said: it can't be regarded as an asset of Heritage

16 because effectively you have thrown away the key; it is

17 not an asset of Heritage in your possession because you

18 have given it away, it was there and then you paid it

19 off into an escrow account and that's not yours. But

20 the claimants, the URA surely were saying "Never mind

21 that you put it into an escrow account, it still belongs

22 to Heritage. It was a purchase price owed to Heritage

23 which you put into an escrow account to which you remain

24 a signatory." I am sure that is the basis on which the

25 argument is being made.

1 MR QURESHI: My Lord, it was never articulated by the URA in

2 that way. They may have embraced Mr Mpanga's --

3 MR JUSTICE BURTON: No, I am not thinking of the deeming.

4 Mr Mpanga said: "Well, I don't agree it was an asset but

5 let us deem it to be asset" and everyone shook hands on

6 that. Anyway, there we are. This is for argument

7 later. I don't think it is for this witness.

8 MR QURESHI: No, my Lord.

9 MR JUSTICE BURTON: If it is for this witness, I don't know

10 which side you agree with.

11 A. I don't think I can add any more to your Lordship's

12 assessment of it.

13 MR JUSTICE BURTON: You agree with the way I was putting it?

14 A. Yes, my Lord.

15 MR QURESHI: "I now understand following our call earlier

16 today that the issue of whether Tullow is in possession

17 of an asset was previously discussed with Elly ..."

18 "Elly" being Elly Karuhanga, yes?

19 A. Yes.

20 Q. "... and perhaps also Peter Kabatsi."

21 "And perhaps also Peter Kabatsi". There is no

22 reference to "and obviously Peter Kabatsi" or "and

23 definitely Peter Kabatsi"; it is "perhaps also

24 Peter Kabatsi". Do you see that?

25 A. Yes.

1 Q. So are you saying that where Miss Shah is expressing

2 a reference to Mr Kabatsi in somewhat equivocal terms

3 she's been misinformed?

4 A. I had never personally briefed Miss Shah on any of the

5 issues. I can't say why or how she might have phrased

6 this. I can see how she has phrased it. I'm not sure

7 how she has picked up that.

8 MR JUSTICE BURTON: It seems rather unfortunate that the

9 lawyers were instructed by a non-lawyer who it seems

10 didn't have the information at her fingertips. That

11 seems what she understood, certainly, doesn't it, it

12 would seem?

13 A. It would suggest that, yes, my Lord.

14 MR JUSTICE BURTON: She should have been saying "It was

15 discussed with Mr Kabatsi and possibly with Elly".

16 A. I agree.

17 MR QURESHI: Because this would suggest that in fact it was

18 Mr Karuhanga who was the main driver for the: what the

19 local judge would do point.

20 A. That wasn't the case, and I don't know how Miss Shah

21 picked up that impression.

22 Q. "This I believe was in the context of the escrow

23 account. Perhaps you can also touch base with Elly and

24 Peter in case they have any further thoughts on this.

25 "Following our call, I also looked at the

1 comprehensive opinion ..."

2 Just in case there is any doubt, she has looked at

3 Mr Kabatsi's opinion.

4 "... and on page 2 KAA does refer to the position

5 that as Tullow is one of the signatories to the escrow

6 account it would be deemed to be in possession of HOGL's

7 assets."

8 You agree with me that either this is very, very

9 careful drafting on Miss Shah's part because at one

10 level she's right, that it does refer to the position

11 that as Tullow is one of the signatories to the escrow

12 account it would be deemed to be in possession of HOGL's

13 assets, but where she's wrong is in any suggestion that

14 this is a reflection of Mr Kabatsi's advice, agreed?

15 A. Yes.

16 Q. So --

17 MR JUSTICE BURTON: At some stage I have altered the word

18 "would", no doubt in discussion with counsel, I altered

19 the word "would" to "could". That is probably, would

20 you agree, Mr Martin, she should have put it better in

21 that way: it could be deemed rather than would be

22 deemed?

23 A. Yes.

24 MR QURESHI: Isn't there another point to take issue with

25 Miss Shah on, in that where the comprehensive opinion

1 refers to this signatory point, all that Mr Kabatsi is

2 doing -- and I don't mean this again in any

3 disrespectful manner -- is regurgitating what the Tullow

4 executives have told him, correct?

5 A. That's the way the document reads. It didn't reflect

6 what he said to us post-Gulu.

7 Q. "As discussed on the call, we should be grateful if you

8 could expand on this with your analysis of how we reach

9 to this conclusion under Ugandan law.

10 "Option 2: Status of a payment under a 108 notice.

11 "Please find attached the draft opinion with

12 comments included. We should be grateful if you would

13 consider these and update the opinion as appropriate.

14 As discussed on the call, our main concern is the impact

15 of the URA pulling out of the case proceedings either

16 after we have signed the MOU but before we make the 313

17 or after we have made the 313 payment and the impact

18 this would have on recovering the money paid from either

19 Heritage or the URA.

20 "Please do not hesitate to contact either Alasdair

21 ... or myself ..."

22 Of course Mr Murray isn't giving evidence.

23 MR JUSTICE BURTON: That is a reference to this document

24 that we examined half an hour ago.

25 A. Yes.

1 MR JUSTICE BURTON: At least, I don't know what the comments

2 included, but it certainly doesn't address the

3 payability point. It addressed the tactics of what

4 would happen if one side pulled out or t'other side

5 pulled out.

6 A. I think it was more tactics it was addressing.

7 MR JUSTICE BURTON: Yes, but "Opinion: Status of a payment

8 under a section 108 notice", one would have thought

9 would or should have been asked to advise on the

10 payability point but there it is.

11 What are the comments included, Mr Qureshi?

12 MR QURESHI: My Lord, we have what I have described as

13 a track change version.

14 MR JUSTICE BURTON: Good. Where is that?

15 MR QURESHI: That, my Lord will find at page 5466 to 5468.

16 MR JUSTICE BURTON: I see.

17 MR QURESHI: But it is difficult to see. Again, I make no

18 criticism of the compiler of the hearing bundles. It is

19 difficult to see.

20 MR JUSTICE BURTON: I see. Thank you. Well that's helpful.

21 Again, it all seems to be on tactics, yes, not on the

22 validity of the section 108 notice, no. Thank you.

23 MR QURESHI: Just to clarify the source of Miss Shah's

24 understanding of page 5463, where she is saying:

25 "I understand following our call that the issue of

1 whether Tullow is in possession of an asset was

2 previously discussed with Elly and perhaps also with

3 Peter Kabatsi."

4 To be fair to Miss Shah, who is not here to give

5 evidence, we have an answer as to where she derived that

6 understanding from. It is in Mr Inch's witness

7 statement, tab 4, paragraph 154, under the heading

8 "Section Q: Revised advice from KAA on validity of the

9 notice"; do you have that?

10 A. Yes.

11 Q. "As I mentioned, in the light of Peter Kabatsi's opinion

12 ..."

13 We will ask Mr Inch what he means. Is it the 18th

14 evening, 19th morning document.

15 "... regarding the approach that the Ugandan court

16 was likely to take to an assessment of the notices, we

17 reverted to KAA so they might formally reconsider their

18 earlier advice and develop Peter's high level views ..."

19 We know there are no views:

20 "... into a more ...(Reading to the words)...

21 requesting Tullow's advice ..."

22 The two points, whether Tullow was in possession and

23 the status of a payment:

24 "In those instructions she refers to Peter Kabatsi's

25 and Elly Karuhanga's view ...(Reading to the words)...

1 as I had mentioned to her."

2 So that is where she gets this from. Do you see

3 that?

4 A. Yes.

5 MR JUSTICE BURTON: We shall hear from Mr Inch, thank you.

6 MR QURESHI: If we could turn, please, to 5469, we'll have

7 to turn the page round. This is Alasdair Murray to

8 Richard Inch, Reshma Shah, Monday, 21 February, 1.59,

9 "Note for Graham meeting." Who would Graham be here?

10 A. That would be me.

11 Q. "For information -- comments welcome."

12 Turn the document back 90 degrees, top right:

13 "Draft, 21 February 2011. Strictly private and

14 confidential", and privileged. Redaction, redaction.

15 Text:

16 "Note (a) recent mixed messages from KAA on the

17 possession of an 'asset' advice."

18 Do you know what that's referring to?

19 A. I'm presuming he's referring to the difference of

20 opinion between Mr Mpanga and Mr Kambona on the one hand

21 and Mr Kabatsi and Mr Karuhanga on the other hand.

22 Q. "(b), Ashurst/Wolfson scepticism around 'asset'

23 argument.

24 "283 versus 30 in relation to 'asset' discussion.

25 30 million is harder argument to make."

1 MR JUSTICE BURTON: Yes. All that makes absolute sense,

2 doesn't it?

3 A. Yes.

4 MR QURESHI: Page 5473, please. This is from David Mpanga,

5 the same day. Forgive me, 22 February, 5.24 to

6 Reshma Shah, Richard Inch, Alasdair Murray, Mr Kabatsi,

7 Elly Karuhanga, Oscar Kambona, "Opinions as discussed.

8 Agency notice opinion":

9 "Dear Reshma, attached is the draft opinion

10 requested. Would be glad to receive your queries and

11 comments."

12 They have been asked to provide definitive, clear,

13 comprehensive advice, hadn't they, on two questions?

14 A. Yes.

15 Q. What they provided you with was a draft, yes?

16 A. Yes.

17 Q. And they have asked or they have invited queries and

18 comments. Did you ever receive a final document which

19 was no longer a draft?

20 A. I thought we had.

21 Q. We don't have a version in the bundle, do we?

22 A. I'm looking for one now. I thought we had a final

23 version.

24 Q. If I am mistaken, my learned friend or his junior or any

25 one of the Ashurst team will very kindly identify where

1 a document that doesn't have "draft" preceding it is

2 contained within the bundles, but the first point to

3 make about this, Mr Martin, is that it is identified by

4 the sender as a draft, do you agree?

5 A. Yes.

6 Q. The second point to make about it is if one turns to

7 5482, it is not signed by anybody, is it?

8 A. Not that version. I thought we had a signed version.

9 Q. We have never seen a signed version. So whatever this

10 document is, it is not a finalised opinion and it is not

11 even pp'd by Elly Karuhanga or whoever it is, it is not

12 signed by anybody, agree?

13 A. Yes.

14 MR JUSTICE BURTON: With that tantalizing position, shall we

15 leave it there for today?


17 MR JUSTICE BURTON: Well now --

18 MR QURESHI: There is not much more.

19 MR JUSTICE BURTON: -- you have finally reached the

20 denouement but how much longer?

21 MR QURESHI: Not long, half a dozen documents maximum.

22 MR JUSTICE BURTON: So three-quarters of an hour tomorrow?

23 MR WOLFSON: I am just concerned to know the timetable

24 because so far --

25 MR JUSTICE BURTON: Absolutely. How long are you going to

1 be in re-examination? Of course some re-examination may

2 emerge, further re-examination, out of what we are going

3 to have tomorrow morning in relation to the draft

4 opinion, if draft it was.

5 MR WOLFSON: Sorry to turn my back.

6 MR JUSTICE BURTON: Yes, of course. Let us give you an hour

7 and a quarter tomorrow morning. I think we must stick

8 to that, yes.

9 MR WOLFSON: I doubt I'll take more than 45 minutes,

10 my Lord. I'll try to be as brief as I can.

11 MR JUSTICE BURTON: Yes, that is two hours. We had better

12 start at 10.15 again. Two hours makes 12.15 so we

13 should have, with any luck --

14 MR WOLFSON: We were going to call Mr Kabatsi on the basis

15 that we were hoping to finish him. I don't know what my

16 learned friend's estimate is.

17 MR JUSTICE BURTON: I am sure we'll finish Mr Kabatsi.

18 MR WOLFSON: I would hope so. It is a fairly short point.

19 MR JUSTICE BURTON: I don't know how short but we should

20 certainly finish him. If he starts at 12.15, he'll be

21 certainly be finished tomorrow or at any rate early on

22 Thursday morning.

23 MR QURESHI: He will be finished tomorrow.

24 MR JUSTICE BURTON: And then we have Mr Atherton on Thursday

25 and we'll start Mr Inch.

1 MR WOLFSON: On Thursday -- it depends how long I take with

2 Mr Atherton.

3 MR QURESHI: Is it Monday you assume for --

4 MR WOLFSON: If I finish Mr Atherton before the end of

5 Thursday, we would be keen to crack on, frankly, and we

6 will call Mr Inch.

7 MR JUSTICE BURTON: Do you think you'll be all day with

8 Mr Atherton?

9 MR WOLFSON: It depends to an extent on the answers. As

10 I said in opening, this is not a --

11 MR JUSTICE BURTON: It won't be more than a full day.

12 MR WOLFSON: No.

13 MR JUSTICE BURTON: And therefore we should start Mr Inch

14 and then we have Monday, Tuesday and Wednesday morning

15 for Mr Inch. Re-examination, I suppose, what do you

16 want to do about re-examination?

17 MR WOLFSON: My learned junior might do it or I might do it,

18 hotfoot it, my Lord, at 2 o'clock but if I do that it

19 will be short but we need that time for the experts.

20 MR JUSTICE BURTON: The trouble about hotfooting is not that

21 we don't expect you to come with hot feet but that that

22 will eat into the day and a half we have for the

23 experts.

24 MR WOLFSON: We will take that into account.

25 MR JUSTICE BURTON: That said, you were both going to have

1 a think about the position on the experts. I'll

2 obviously read the experts over the weekend, by which

3 time I would like to know what parts of the experts

4 I have to read and what parts I no longer have to read

5 on the assumption that either some matters are no longer

6 pursued or I am not going to have to deal with the

7 underlying tax position.

8 MR WOLFSON: My Lord, yes. It may be that if we have

9 a moment it may be worth -- with all respect to my

10 learned junior, I would like to, so to speak, finalise

11 the position with your Lordship before I disappear.

12 MR JUSTICE BURTON: Absolutely. I need to know by Thursday

13 evening, because we are not sitting on Friday, what I am

14 to read by way of experts' reports which I will probably

15 do over the weekend.

16 MR WOLFSON: To speed things up, we may inflict a very short

17 note on your Lordship because it might actually speed up

18 the discussion.

19 MR JUSTICE BURTON: Indeed. Thank you very much. Good.

20 Not before 10.15. You are nearly at the end of the

21 time, Mr Martin. Thank you.

22 A. Thank you, my Lord.

23 (4.38 pm)

24 (The court adjourned until the following day at 10.15 am)

25

day 5 tullow uganda limited vs heritage oil.docx

Documents

ura defence filing

heritage oil

mr justice mulenga

income tax act

dear mr martin

mr alasdair murray

post mortem meeting

mr kabatsi gave