US energy giant ExxonMobil is suing the European Union (EU) to block its new windfall tax on oil firms.
A windfall tax is an additional levy imposed by the government on companies that benefit from something they are not responsible for.
Energy firms made huge gains as energy prices surged following the Russia-Ukraine war that fueled supply concerns.
ExxonMobil reported a quarterly profit of nearly $20 billion in October.
However, Exxon claims the EU exceeded its legal powers, describing the move as 'counter-productive'.
European Commission chief Ursula von der Leyen announced an emergency plan for major oil, gas and coal companies in September.
The companies will have to pay a 'crisis contribution' on the increased profits achieved in 2022 with a 33% tax applied.
In addition, the firm also argued that the levy undermined investor confidence, in a suit filed at the EU's Luxembourg-based Supreme Court.
During an investor meeting earlier this month, ExxonMobil's chief financial officer estimated that EU taxes would result in payments of more than $2 billion.
