FirstBank Vindicated: Arbitration Tribunal Dismisses GHL’s $718 Million Claim

The Final Award in the arbitration initiated by General Hydrocarbons Limited against First Bank of Nigeria Limited, issued by Sole Arbitrator Hon. Justice Kumai Bayang Akaahs, was published today the 28th, October 2025,

General Hydrocarbons Limited (GHL) was represented by Messrs. Paul Usoro SAN & and Abiodun Layonu SAN. First Bank of Nigeria Limited (FBN) was also represented by Messrs Gbolahan. Elias, SAN; Babajide Koku, SAN and Victor Ogude, SAN.

The Tribunal dismissed GHL’s case in its entirety, affirming FBN’s financing obligations as conditional, finding no breach or entitlement to damages by GHL, and ordering GHL to bear the costs of arbitration.

The dispute arose from the Subrogation Agreement dated May 29, 2021, under which GHL undertook the repayment of an outstanding debt of $718 million and FBN undertook to provide additional loans to finance the development and production of OML 120 in line with the provisions of the Subrogation Agreement.

GHL alleged that FBN breached the agreement by failing to provide absolute and timely financing, sabotaging alternative funding efforts, and causing losses including liabilities to third party and leading to loss of productive time in the development of OML 120.

FBN argued its financing obligation was conditional and not absolute but subject to review and professional discretion in line with banking policies and regulatory guidelines.

The key Findings of the Tribunal are as follows:

1.FBN has a conditional, not absolute, obligation to finance OML 120 development. It must review and evaluate financing requests and may attach competitive terms as deemed suitable.

2.GHL failed to prove any breach by FBN. FBN made several financing offers totaling $185 million, and delays alleged by GHL were not found unreasonable or in breach.

3.Introduction of an Independent Asset Manager as a financing condition by FBN was consistent with the agreement and not a breach.

4.Allegations of FBN sabotaging alternative financing arrangements were unsubstantiated and dismissed for being devoid of any merit.

5.All reliefs sought by GHL, including declarations, damages for unpaid contractor fees, losses, and termination of the Subrogation Agreement, were refused.

6.FBN was adjudged entitled to recover reasonable legal and arbitration costs from GHL, amounting to $112,100 and ₦111,250,000, payable within 30 days with interest on late payment.