This is a historic tax case about the Buchan oil field in the North Sea and how percentage payments on oil extracted from the site and paid to Royal Bank of Canada should be taxed.

In the early 1980s, Sulpetro (UK), a subsidiary of a Canadian tax resident company Sulpetro Limited, was granted an exploratory licence for particular section of the North Sea. Subsequently, the exploratory rights were acquired by BP in 1986 with an agreement to make payments to Sulpetro [Canada] for a percentage of the oil extracted.

In 1987, Royal Bank of Canada took over the rights to receive a share of the payments for the oil when it became a creditor after Sulpetro went into receivership.