Nigeria LNG Limited (NLNG) has lost its appeal in a London court, cementing a $380 million compensation ruling in favor of oil trading firm Taleveras over a failed gas supply agreement.

The Court of Appeal of England and Wales on Wednesday affirmed the decision of a lower court, which had ruled that NLNG must indemnify Taleveras for payments the company was required to make to Vitol SA and Glencore Energy UK following a disrupted supply contract.

The case centered around a 2020 agreement in which NLNG—a joint venture between Nigeria’s state oil firm NNPC, Eni, Shell, and TotalEnergies—was to supply Taleveras with natural gas. However, between 2020 and 2021, NLNG failed to deliver 19 cargoes, leading Taleveras, which had already resold the gas to Vitol and Glencore, to miss out on significant profits—especially after gas prices surged following Russia’s invasion of Ukraine in 2022.

An arbitral tribunal under the United Nations Commission on International Trade Law awarded $24 million to Taleveras in January 2023 for lost profits and directed NLNG to indemnify the company for liabilities arising from related arbitrations with Vitol and Glencore. In December 2023, the Vitol arbitration tribunal awarded $233.3 million in damages against Taleveras.

NLNG challenged the indemnity directive in January 2024, arguing that the tribunal’s decision was dependent on a provision—paragraph 607—in the analysis section of the original arbitral award. The company maintained that the indemnity was subject to endorsement by the Vitol and Glencore arbitral tribunals, which it said was not granted in the dispositive section of the award.

Taleveras countered that the indemnity was unconditional and pointed to a final addendum and supplementary award issued by the Vitol tribunal, which explicitly confirmed that the damages awarded fell under the scope of NLNG’s indemnity.

NLNG further contended that the Vitol arbitrators had no jurisdiction to issue the addendum, arguing that the arbitration proceedings had already concluded.

In July 2024, High Court Judge Pelling KC ruled against NLNG, finding that the indemnity was not contingent on any further declaration from the Vitol or Glencore tribunals. He granted Taleveras the right to enforce the indemnity.

On appeal, the Court of Appeal upheld the High Court’s decision. Lord Justice Phillips, leading a three-judge panel, dismissed NLNG’s claim that the High Court had misinterpreted the arbitral award. He clarified that the disputed paragraph 607 did not contradict the dispositive section, which clearly set out binding orders.

“It is perhaps unfortunate that the tribunal used the words ‘further orders’ in paragraph 607 of its analysis section, but that loose wording does not come close… to undermining the clear structure of the Award,” Phillips said.

The appeal was unanimously dismissed, leaving NLNG legally obligated to pay the full compensation to Taleveras.

Taleveras, founded in 2004 by Nigerian businessman Igho Charles Sanomi, is based in Dubai and has long been active in global energy trading.