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 over a $13.9m arbitration award in favour of Gamji Nigeria Company Limited.
Justice D.E. Osiagor issued the interim order following an application by Gamji through its counsel, Yunus AbdulSalam, SAN, in suit No. FHC/L/CS/1233/2026.
The company is seeking to preserve $13,924,343.32 and N157.5m awarded to it following an arbitration dispute over water infrastructure projects in Ilesa West Local Government Area of Osun State.
The affected financial institutions 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, among others.
According to an affidavit filed by Gamji, the dispute arose from two contracts awarded to the company by the Osun State Government in June 2017 for water infrastructure works.
The projects covered the construction of transmission mains and booster pump stations under Slot 1 and water reservoirs under Slot 2 as part of 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 company said the original contract values were $15.98m for Slot 1 and $9.70m for Slot 2, but subsequent design changes and variations increased the values to $20.24m and $10.95m respectively.
Gamji claimed that 93 per cent of the work had been completed by October 2023, with the state government issuing a Substantial Completion Certificate on November 14, 2024.
Disputes later emerged over claims relating to extensions of time, price adjustments and increased costs of materials and labour.
According to the company, the state government rejected its claims, while mediation efforts failed. Gamji subsequently issued an arbitration notice on April 3, 2025.
The state government accepted the arbitration process and nominated its arbitrator, with preliminary proceedings held in Lagos on May 15, 2025.
The arbitral panel 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 20 per cent annual interest on any outstanding balance after the expiration of the compliance period.
Gamji said the August 24, 2026 compliance deadline expired without payment by the state government, prompting the company to approach the Federal High Court.
Ruling on the application, Justice Osiagor ordered the affected banks to immediately restrict withdrawals from the Osun State Government’s accounts and preserve funds up to the value of the arbitral award.
The judge said the restriction would remain in place pending the hearing and determination of the motion on notice.
The court order stated: “A preservation order of interim injunction is granted directing the cited financial institutions in Nigeria to immediately place a Post No Debit restriction on the Respondent’s account domiciled with them for the preservation of the funds with them in the sum of $13,924,343.32 and N157,500,000.00 towards the liquidation of the Arbitral Award dated 24th July, 2026 which has become due and enforceable, pending the hearing and determination of the motion on notice.”
The suit was adjourned until October 22, 2026, for hearing of the motion on notice.
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