Aberdeen-headquartered Dolphin Drilling has said it is “extremely disappointed” having lost a £12.8m tax case against HMRC.
Dolphin Drilling (OSLO: DDRIL) has been locked in a court clash with the government’s tax collector since 2020.
The dispute is linked to corporation tax deductions claimed in 2014 and 2015 by Dolphin in connection to the hire of the Borgsten Dolphin (a rig which has since been recycled) for TotalEnergies’ Dunbar platform in the UK North Sea.
After two successful cases defending Dolphin’s position in 2020 and 2022, the UK Court of Appeal has now found in HMRC’s favour, with Dolphin liable for tax claim payments of £9.9m, plus interest and costs of £2.9m.
The Oslo-listed rig firm said it has already taken steps to appeal that decision and said it “could take a number of months or potentially years until a final outcome is reached”.
Chief financial officer Stephen Cox said: “We are extremely disappointed to note the decision of the Court of Appeal today which finds in favour of HMRC and which overturns the judgements in the First-tier Tax Tribunal and Upper Tribunal, not only in the Court’s interpretation of the case, but also in a fundamental shift in interpretation of the language in the relevant legal test which has potentially significant ramifications for assets within UK territorial waters.
“Our legal teams have advised the position to be appealable and as such Dolphin Drilling has immediately taken steps to seek permission from the Courts to appeal this decision.
“We will continue to defend our position.”
© Supplied by Big PartnershipHMRC has been contacted for comment.
Dolphin Drilling shares, down 17% in the last six months, were down on the news this afternoon.
This is not the only piece of litigation for the Aberdeen-based driller.
Last month the firm received notice from Peak Petroleum of Nigeria that it will face legal action over a cancelled contract and a dispute over payments.
The Blackford Dolphin cancellation came as Dolphin said Peak owed the firm $6m.
On receiving the notice for legal action, Dolphin said it “disputes this position and together with its legal advisors will take the appropriate measures”.