The Federal High Court in Lagos has ordered commercial banks to place a “Post No Debit” restriction on accounts operated by the Osun State Government. This is over a $13.9m arbitration award in favour of Gamji Nigeria Company Limited. The court granted the interim order following an application filed by Gamji through its counsel, Yunus AbdulSalam, SAN.
The arbitration award arose from water infrastructure projects executed in Ilesa West Local Government Area of Osun State. Gamji Nigeria Company Limited was awarded $13,924,343.32 and N157.5m after an arbitration. The company is seeking to preserve the awarded funds. The financial institutions listed in the order include Guaranty Trust Bank, Access Bank, First Bank, Zenith Bank, United Bank for Africa, Ecobank, Fidelity Bank, Stanbic IBTC, Sterling Bank, Union Bank and Wema Bank.
According to an affidavit filed in support of the application, the dispute originated from two contracts awarded to Gamji by the Osun State Government in June 2017. The contracts covered the construction of transmission mains and booster pump stations, as well as water reservoirs, under a water supply and sanitation project in Ilesa West. Gamji said the projects were financed through an Islamic Development Bank loan facility facilitated by the Federal Ministry of Finance.
The initial value of the Slot 1 contract was $15.98m, while Slot 2 was valued at $9.70m. However, subsequent engineering design changes and variations in the scope of work resulted in delays and revisions to the project costs. Following the amendments, the value of Slot 1 increased to $20.24m, while Slot 2 rose to $10.95m. Gamji claimed that it had completed 93 per cent of the contracted works by October 2023.
The company said disputes later emerged over claims relating to extensions of time, price adjustments and increased costs of materials and labour. According to Gamji, the state government rejected the claims, while attempts to resolve the disagreement through mediation failed. The company subsequently issued an arbitration notice on April 3, 2025, which the state government accepted, nominating its arbitrator.
Preliminary proceedings were later held in Lagos on May 15, 2025. The arbitral panel eventually delivered its final award on July 24, 2026, directing the Osun State Government to pay Gamji $13,924,343.32 and N157.5m in reimbursable arbitration fees. The panel also awarded interest at an annual rate of 20 per cent on any outstanding amount after the expiration of the stipulated compliance period.
In his ruling, Justice D.E. Osiagor directed the listed financial institutions to immediately restrict transactions on the affected Osun State Government accounts. The court adjourned the matter until October 22, 2026, for hearing of the motion on notice. The judge ordered the preservation of funds up to $13,924,343.32 and N157.5m towards satisfying the arbitral award pending the determination of the motion on notice.
Key points
- The Federal High Court in Lagos has ordered commercial banks to freeze Osun State Government accounts over a $13.9m arbitration award.
- The arbitration award arose from water infrastructure projects executed in Ilesa West Local Government Area of Osun State.
- The court adjourned the matter until October 22, 2026, for hearing of the motion on notice.
