A Nigerian tribunal sitting in Lagos has ordered General Hydrocarbons Limited (GHL) to pay First Bank of Nigeria Limited (FirstBank) $112,100 and N111 million as costs following a dispute over Oil Mining Lease (OML) 120.
Justice Kumai Bayang Akaahs delivered the ruling on Tuesday while considering a Notice of Arbitration filed by GHL against the bank. The tribunal found that GHL had failed to substantiate its claims that FirstBank had an “absolute obligation” to fund the exploration, development, and production of OML 120 under a Subrogation Agreement dated May 29, 2021.
Documents revealed that the Subrogation Agreement established a working arrangement between the parties to finance and develop OML 120, ensuring payment of financial obligations related to exploration and production activities. GHL later accused the bank of breaching the agreement and sought redress through arbitration.
GHL’s lead counsel, Paul Usoro, SAN, requested that the tribunal declare that FirstBank had an unconditional duty to fund the project and sought to restrain the bank from publishing claims that GHL owed it $718 million. The firm also demanded refunds for amounts allegedly spent on third-party contractors.
In response, FirstBank’s legal team, led by Prof. Gbolahan Elias, SAN, and Babajide Koku, SAN, argued that the agreement did not impose an absolute funding obligation and that the bank had complied with its conditional funding responsibilities. They maintained that the agreement merely reflected a traditional lender–borrower relationship and cited Central Bank of Nigeria Prudential Guidelines (2019) in support of their position.
Justice Akaahs ruled that while FirstBank was contractually obligated to finance OML 120, the obligation was conditional, not absolute. The tribunal noted that the bank had advanced $185 million to GHL between June 2021 and January 2024 in multiple tranches.
“As earlier found in this award, the respondent did not fail, delay, or breach its obligations under the Subrogation Agreement. The respondent has so far provided funding to the claimant in the cumulative sum of $185 million,” Justice Akaahs held.
The tribunal further ordered that GHL pay $112,100 and N111 million as total costs within 30 days, failing which the sum would accrue 10% per annum interest until full payment.
In September 2025, the Court of Appeal had upheld FirstBank’s appeal against an earlier Federal High Court ruling in Port Harcourt, which had vacated enforcement orders linked to GHL’s OML 120 operations. The appellate court confirmed that proceeds from the sale of crude oil aboard the FPSO Tamara Tokoni had been improperly diverted and directed authorities to secure the cargo pending the resolution of the substantive dispute.
GHL is a company associated with media entrepreneur Nduka Obiagbena.
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