Appeal Court overturns Justice Kissoon’s ruling on unlimited parent company guarantee for oil spill

May 08, 2026 News

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(Kaieteur News) – Justice Sandil Kissoon’s 2023 ruling ordering American oil giant ExxonMobil to provide Guyana with an unlimited parent guarantee for oil spills, was on Thursday unanimously overturned by the justices at the Guyana Court of Appeal.

The Court also overturned Justice Kissoon’s Order that the Environmental Permit issued to Exxon be suspended until the company provided the unlimited guarantee.

The landmark ruling by Justice Kissoon was issued on May 3, 2023. Citizens, Frederick Collins and Godfrey Whyte had taken the Environmental Protection Agency (EPA) to court to enforce a critical clause in the Liza Phase One renewed environmental permit issued to Exxon subsidiary, ExxonMobil Guyana Limited (EMGL). They were successful in getting the court to declare that EMGL was not in compliance with the insurance provisions of its Liza Phase One Permit, which requires an unlimited parent guarantee for oil spills in the Stabroek Block.

However, the Court of Appeal, comprising Justices of Appeal Dawn Gregory, Nareshwar Harnanan and Priya Sewnarine- Beharry, held that Justice Kissoon fell into error when he held that Exxon’s liability under the Environmental Permit was unlimited in nature. The justices further ruled that neither the Environmental Permit nor the Environmental Protection Agency Act made any provision or referred to an unlimited guarantee and that Justice Kissoon erred in seeking to substitute his own discretion and decision for that of the EPA.

A stay of Justice Kissoon’s ruling was granted by the Court of Appeal after EPA and Exxon approached the court. Earlier this year, the Court heard arguments from the applicants and the respondents in the case.

Collins and Whyte were represented by a team of lawyers including Trinidadian born Senior Counsel, Seenath Jairam and attorneys Melinda Janki and Abiola Wong-Inniss as well as British-born King’s Counsel, Tim Prudhoe who joined the appeal. The respondents lawyer had contended that EMGL as the permit holder must be able to meet its liabilities. In the likelihood of an oil spill, the responsibilities of Exxon are uncapped. Notwithstanding the Act requires financial assurance in the Exxon permit, the attorneys believe that the core of the issue is for the corporation to provide unlimited guarantee for all costs related to cleanup, restoration, and compensation for damages caused by any discharge of contaminants, including investigations into pollution incidents.

Meanwhile, lawyers for the EPA, Mr. Sanjeev Datadin and Ms. Mohanie Anganoo raised contention over the legitimacy of the claims of an unlimited parent company guarantee. EPA lawyers advanced that the term was introduced at the level of The High Court when the trial judge sought to give legal effect to the term “unlimited guarantee”. They submitted that Section 31 of the EPA Act requires financial assurance to be provided in a specified sum. Condition 14.3 sets the formula to calculate the amount.

The lawyers contended that the trial court erroneously issued a mandamus to compel the appellant to issue an enforcement notice within days of its decision directed to Exxon to provide the said unlimited assurances, which, if not produced within thirty days would result in the suspension of the environmental permit.

Notably, Exxon was represented by Mr. Edward Luckhoo, S.C; Mr. Andrew Pollard, S.C. and Ms. Eleanor Luckhoo.

Attorney General and Minister of Legal Affairs, Anil Nandlall SC, representing the Government of Guyana was represented by Mr. Darshan Ramdhani, K.C.; Mr. Nigel Hawke, Solicitor General; Mr. Arudranauth Gossai; Ms. Shoshanna V. Lall, Deputy Solicitor General and Ms. Raeanna Clarke, Senior Legal Advisor.

In this Appeal, the Attorney General sought to intervene in order to advance the legal position of the State inclusive of the State’s contractual obligations under the Agreement with Exxon but the Court of Appeal refused the application to intervene which resulted in an appeal to the Caribbean Court of Justice. The CCJ agreed with the position that the Attorney General is the protector of the public’s interest and therefore must be heard for and on behalf of the State in a matter of such national importance.

As a result, the Attorney General was added as a party to the proceedings in the Court of Appeal.

At the Court of Appeal the Attorney General argued that Parliament is the entity to which financial assurance is made and that therefore, it was for the Government, and not the Court, to determine what assurance, if any, was required, its terms and conditions, and the effect of failure to provide such assurance.  Further to that, it was outlined that the quantum, circumstances when necessary, and terms and conditions, are matters which Parliament has vested exclusively within the functional domain of the EPA, the Government and the Permit Holder to determine.

In the High Court, EPA had argued that the country is poised to receive a US$2B parent guarantee from Exxon. But Justice Kissoon had said that even then, EMGL would still be in breach of its permit obligations.

Justice Kissoon had categorically stated that the Liza Phase One Permit carries a confluence of measures, specifically at Condition 14 which stipulates and imposes full, complete and unlimited liability upon the Permit Holder for any discharge of any contaminant into the environment and for all costs of clean up, restoration and any damages all of which constitute legitimate liabilities under the Permit.

He reasoned that the norm or standard in relation to activities of this nature has been and continues to be that the Permit Holder is exclusively and solely responsible for all such liabilities arising from its operations without limitation or exception.

Justice Kissoon cited Condition 14 of the permit titled Financial Assurance and Liability for Pollution Damage provides at: 14:1, outlining that the Permit Holder is liable for all costs associated with clean up, restoration and compensation for any damages caused by a discharge or any contaminant including the cost of all investigations into pollution incidents or discharge of contaminants conducted at the instance of the Agency.

“Condition 14:01 does not contain any word or term of limitation upon liability, quantum of costs, quantum of damages nor restrictions on the circumstances of release or discharge nor on containment nor restriction on the sphere of adverse effects caused directly or indirectly,” the judge ruled, adding that the unlimited liability which is exclusively that of EMGL, is by no means unusual in any sense.

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• Court of Appeal, EPA, ExxonMobil Guyana, Sanjeev Datadin

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