The Federal High Court in Lagos has issued an interim order directing commercial banks to place a "Post No Debit" restriction on bank accounts operated by the Osun State Government. This order stems from a $13.9m arbitration award in favour of Gamji Nigeria Company Limited. The award arose from water infrastructure projects in the Ilesa West Local Government Area of Osun State.
Justice D.E. Osiagor issued the order following an application filed by Gamji through its counsel, Yunus AbdulSalam, SAN. The suit, marked FHC/L/CS/1233/2026, seeks to preserve $13,924,343.32 and N157.5m awarded to Gamji after an arbitration proceeding. The company claimed that the Osun State Government had not paid the awarded sum despite the expiration of the compliance deadline.
The dispute between Gamji and the Osun State Government dates back to June 2017. The state government awarded two contracts to Gamji for water infrastructure works. The projects involved the construction of transmission mains, booster pump stations, and water reservoirs. The original contract values were $15.98m and $9.70m, but these were revised to $20.24m and $10.95m due to engineering design alterations and scope variations.
Gamji stated that it had completed 93 per cent of the contract by October 2023. The state government issued a Substantial Completion Certificate on November 14, 2024. However, disagreements arose over claims regarding extensions of time, price adjustments, and escalated costs of materials and labour. Despite mediation attempts, the parties could not reach a resolution, leading to an arbitration notice being issued on April 3, 2025.
The arbitral panel issued its final award on July 24, 2026, directing the Osun State Government to pay $13,924,343.32 and N157.5m in reimbursable arbitration fees. The panel also awarded 20 per cent annual interest on any outstanding balance following the expiration of the compliance period. The compliance deadline lapsed on August 24, 2026, without payment from the state government.
Financial institutions affected by the court's 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. The court has adjourned the suit to October 22, 2026, for a hearing on the motion on notice. The order restricts the state government's accounts to preserve funds toward the liquidation of the arbitral award.
The court's decision aims to ensure that the awarded sum is preserved and eventually paid to Gamji Nigeria Company Limited. The case highlights the importance of honouring arbitration awards and the role of the judiciary in enforcing such awards. The outcome of the case will be closely watched by stakeholders in the construction and infrastructure development sectors.
Key points
- The Federal High Court in Lagos has ordered commercial banks to restrict Osun State government accounts over a $13.9m arbitration award.
- The dispute arose from water infrastructure projects in the Ilesa West Local Government Area of Osun State.
- The court has adjourned the suit to October 22, 2026, for a hearing on the motion on notice.
