Tribunal Orders GHL to Pay FirstBank $112,100 and ₦111m in OML 120 Funding Dispute
A Lagos‑seated arbitral tribunal has ordered General Hydrocarbons Limited (GHL) to pay First Bank of Nigeria Limited (FirstBank) the sums of US$112,100 and ₦111 million as costs in respect of their dispute over Oil Mining Lease (OML) 120.
Delivering the award, Hon. Justice Kumai Bayang Akaahs (Rtd.) held that GHL failed to establish its contention that FirstBank bore an “absolute obligation” under a Subrogation Agreement (SA) dated 29 May 2021 to finance the optimal exploration, development, and production of OML 120.
GHL, through its lead counsel Paul Usoro, SAN, had urged the tribunal to:
– Declare that the Subrogation Agreement imposed an unconditional duty on FirstBank to fund OML 120 operations;
– Restrain the bank from publishing that GHL was indebted in the sum of US$718 million; and
– Compel the bank to refund various sums, including £1.35 million, US$14.43 million, and ₦5.2 billion, allegedly expended on third‑party contractors due to the bank’s purported failure to meet its obligations.
FirstBank, represented by Prof. Gbolahan Elias, SAN, and Babajide Koku, SAN, countered that:
– The SA did not create an absolute or unconditional funding obligation;
– The arrangement was consistent with a lender–borrower relationship and subject to prudential banking regulations, including the CBN Prudential Guidelines (2019); and
– The bank had in fact advanced substantial facilities to GHL.
Justice Akaahs agreed with the bank’s submissions, holding that:
– Clause 2(b) of the SA imposed only a conditional funding obligation;
– FirstBank had disbursed an aggregate of US$185 million between June 2021 and January 2024, comprising tranches of US$10m, US$110m, US$40m, and US$25m;
– The bank was entitled to review and approve each funding request; and
– GHL failed to prove breach, delay, or underfunding.
Accordingly, the tribunal dismissed GHL’s claims, awarded costs of US$112,100 and ₦111 million to FirstBank, and directed that failure to pay within 30 days would attract 10% simple interest per annum until liquidation.
The award follows the September 2025 decision of the Court of Appeal, which had overturned an earlier ruling of the Federal High Court, Port Harcourt, in related proceedings. The appellate court upheld FirstBank’s arguments (advanced by Koku, SAN, and Victor Ogude, SAN) that proceeds from crude oil cargo aboard the FPSO Tamara Tokoni, pledged as security for GHL’s loan facilities, had been improperly diverted. The court directed the Chief Registrar and Admiralty Marshal to assume custody of the cargo pending resolution of the substantive dispute.
