Appeal Court overturns decision on financial assurance dispute, rules in favour of ExxonMobil, EPA

The Court of Appeal has ruled in favour of ExxonMobil Guyana Limited and the Environmental Protection Agency (EPA), overturning a 2023 High Court judgment delivered by Justice Sandil Kissoon concerning financial assurance requirements under ExxonMobil’s offshore petroleum environmental permit.

In the earlier decision, the High Court ruling had found that ExxonMobil was in breach of its environmental permit obligations by failing to provide what the court described as adequate financial assurance for potential environmental damage.

Justice Kissoon had also ruled that the EPA failed in its statutory duty by allowing what he determined to be insufficient compliance. He concluded that ExxonMobil’s liability for environmental harm was unlimited and uncapped, and therefore the financial guarantee required under the permit should also be unlimited.

He further held that the company was in breach for seeking to provide a US$2 billion guarantee instead of an unlimited one, and ordered the EPA to issue an enforcement notice. The ruling also indicated that ExxonMobil’s permit could be suspended if an unlimited guarantee was not provided within 30 days.

Both ExxonMobil and the EPA appealed the decision, and the Court of Appeal stayed the High Court’s orders pending the outcome of the appeal. The matter was heard in February 2026.

In its unanimous decision, the Court of Appeal reversed the High Court ruling. The appellate court affirmed that while ExxonMobil remains fully liable for any environmental damage arising from its offshore petroleum operations in Guyana, liability and financial assurance are legally distinct concepts. The Court found that Justice Kissoon erred in conflating unlimited liability with the requirement for financial security under the permit.

The Court further held that the Environmental Protection Agency, under the Environmental Protection Act and the terms of the permit, retains discretion to accept a financial guarantee in a specified amount. It concluded that the High Court judge had improperly substituted his own judgment for that of the regulator, which is the statutory authority empowered by Parliament to make such determinations.

The Court also found no evidence to support the High Court’s conclusion that the insurance structure provided by ExxonMobil and accepted by the EPA was not consistent with practices in the international petroleum industry. It ruled that the EPA and ExxonMobil did not act improperly in negotiating a US$2 billion guarantee.

As a result, the Court of Appeal set aside all orders made by Justice Kissoon in 2023.

ExxonMobil Guyana was represented by Senior Counsel Andrew Pollard, Edward Luckhoo, and Eleanor Luckhoo. The EPA was represented by Sanjeev Datadin and Mohanie Anganoo. The applicants, Frederick Collins and Godfrey Whyte, were represented by Senior Counsel Seenath Jairam, Saevion David-Longe, Melinda Janki, and Abiola Wong-Inniss. The Attorney General’s chambers was represented by Arud Gossai and Shoshanna Lall.

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