Economy

General Hydrocarbons Limited Loses Arbitration to First Bank

Published

12 months ago

October 29, 2025

General Hydrocarbons Limited loses arbitration against First Bank as tribunal rules FBN’s financing duties were conditional and dismisses all claims

General Hydrocarbons Limited (GHL) has lost its arbitration case against First Bank of Nigeria Limited (FBN) after the tribunal dismissed all claims brought by the energy firm, ruling that the bank’s financing obligations were conditional and not absolute.

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The Final Award, issued on 28 October 2025 by Hon. Justice Kumai Bayang Akaahs (Rtd), who served as the Sole Arbitrator, marks the conclusion of a complex financial dispute arising from a multi-million-dollar oil financing deal.

GHL was represented by Paul Usoro, SAN and Abiodun Layonu, SAN, while First Bank was represented by Gbolahan Elias, SAN, Babajide Koku, SAN, and Victor Ogude, SAN.

The dispute stemmed from a Subrogation Agreement dated 29 May 2021, under which GHL agreed to repay an outstanding debt of $718 million, while FBN undertook to provide additional financing to develop and produce OML 120, an offshore oil block.

GHL accused the bank of breaching the agreement by failing to provide full and timely funding, sabotaging alternative financing attempts, and causing significant operational and financial losses.

However, the tribunal ruled entirely in favour of First Bank, holding that its financing obligations were conditional—subject to professional evaluation, competitive terms, and regulatory discretion.

The arbitrator found that GHL failed to prove any breach, noting that FBN had made several financing offers totalling $185 million, and that the delays complained of were neither unreasonable nor in violation of the agreement.

Justice Akaahs further held that the introduction of an Independent Asset Manager as a financing condition was consistent with the Subrogation Agreement and not a breach of contract.

Allegations that FBN sabotaged GHL’s alternative funding efforts were dismissed as unsubstantiated and devoid of merit.

Consequently, all reliefs sought by GHL—including declarations, claims for damages, and termination of the Subrogation Agreement—were refused.

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The tribunal ordered GHL to pay FBN’s legal and arbitration costs amounting to $112,100 and ₦111,250,000, within 30 days, with interest accruing on any delayed payment.

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Economy

NRS Assures Taxpayers VAT Remains at 7.5% Amid Tax Reform Concerns

Published

21 hours ago

October 27, 2026

Peculiar Adirika

NRS VAT rate remains 7.5%, the agency says, while addressing concerns over bank deductions, loans and the implementation of Nigeria’s tax reforms

The Nigeria Revenue Service (NRS) has assured taxpayers that Nigeria’s standard Value Added Tax (VAT) rate remains 7.5 per cent, while addressing concerns over the implementation of the country’s new tax reforms.

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The assurance was given by the Tax Administrator responsible for Kano, Jigawa and Katsina states, Samaila Abdullahi, during an NRS stakeholders’ engagement and tax reform sensitisation programme in Kano.

Abdullahi said concerns raised by individuals, traders, business owners and other stakeholders about the new tax laws were understandable, particularly questions relating to bank transactions, loans, family transfers, business income and the potential impact on small businesses.

He urged taxpayers to understand the reforms through the provisions of the law rather than rely on assumptions or misinformation.

According to him, the tax laws do not automatically authorise deductions from personal bank accounts.

He stressed that tax collection and recovery must follow the applicable legal provisions and procedures.

Abdullahi also clarified that money received as a loan should not automatically be classified as business income or profit, explaining that proper documentation is essential to establish the nature of a transaction.

“For instance, when a trader receives a loan of N500,000, the amount should not automatically be treated as N500,000 in sales or profit, provided the transaction is properly documented,” he said.

The NRS official’s comments were aimed at addressing public concerns about how the new tax framework would affect personal finances and business transactions.

He emphasised the importance of distinguishing between taxable business receipts and other funds, such as documented loans, when determining a taxpayer’s obligations.

The clarification comes amid heightened public interest in Nigeria’s tax reforms and questions about their implications for individuals, traders and small businesses.