RETHINKING THE NON-ARBITRABILITY OF TAX DISPUTES IN NIGERIA: IMPLICATIONS FOR PRODUCTION SHARING CONTRACTS
Keywords:Arbitration, Tax, Dispute, Production Sharing Contract, Agreement, Statutory
It has always been the rule that there is no provision under the Petroleum Profit Tax Act (PPTA) under which the parties to the Production Sharing Contract (PSC) can refer tax disputes to arbitration in Nigeria. The mechanism provided for the resolution of such disputes is the Tax Appeal Tribunal and thereafter, the Court of Appeal. It is recognised as a matter of public policy that matters relating to tax, crime, matrimonial causes, winding-up of a company or bankruptcy are of such nature that cannot be settled by arbitration. There was no consideration whatsoever of matters or issues relating to contractual relations of parties. This work employs the doctrinal and analytical approach in examining research materials like tax legislations, judicial decisions, textbooks, journal articles and internet sources. The paper found that an arbitral tribunal, being a creature of contract, is not endowed with general and wide jurisdiction bestowed on a regular court. Therefore, non-contractual issues, regardless of their implication for their transactions cannot be submitted to arbitration. Currently, the position of Courts in Nigeria though still controversial, is that disputes amongst parties with regards to who has what rights and obligations under a product sharing contract (PSC) is clearly a contractual dispute and amenable to be determined by an arbitral tribunal.