Mustapha Fawaz, Abdallah Thahini and Talal Ahmad Roda were arrested in May after the discovery of an arms cache in a residence in the northern Nigerian city of Kano.
They were accused of plotting attacks against Western and Israeli targets in Nigeria but denied the accusations.
Federal High Court Judge Adeniyi Adetokunbo Ademola said Hezbollah "is not an international terrorist organisation in Nigeria" and therefore membership is not criminal.
Roda, however, was found guilty of conspiracy to import weapons into the country and sentenced to life imprisonment.
All three men were also acquitted of money laundering charges.
The trial featured several unexpected twists, including a testimony from Roda that an extremist cell in Nigeria had plotted to assassinate the Saudi ambassador.
In August, Fawaz testified that he had been harshly interrogated by Israeli security agents after his arrest.
Nigerian intelligence agents escorted journalists to a property in Kano on May 30 and showed them a bunker where a massive haul of weapons had been stored.
The court verdict is a fresh blow to Nigeria's main intelligence branch, the Department of State Services, which in September claimed that Boko Haram Islamists attacked troops outside a government building in the capital Abuja.
Subsequent evidence, however, suggested the clash involved security officers and a group of squatters.
You’ve reached your limit of {{free_limit}} free articles this month.
Subscribe now for unlimited access.
Already subscribed? Log in
Subscribe to read the full story →
Smart Quarterly
₹900
3 Months
₹300/Month
Smart Essential
₹2,700
1 Year
₹225/Month
Super Saver
₹3,900
2 Years
₹162/Month
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors


Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share


Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor


Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements


Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app
