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 an outstanding $13.9m arbitration award in favour of Gamji Nigeria Company Limited.
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Justice D.E. Osiagor issued the interim order following an application by Gamji through its counsel, Yunus AbdulSalam, SAN, in suit FHC/L/CS/1233/2026.
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The company is seeking to preserve $13,924,343.32 and N157.5m awarded to it after an arbitration arising from water infrastructure projects carried out 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 the affidavit filed by Gamji, the dispute originated from two contracts awarded to the company by the Osun State Government in June 2017 for the development of water infrastructure.
The first contract, known as Slot 1, involved the construction of transmission mains and booster pump stations, while Slot 2 covered the construction of water reservoirs. The projects formed part of a water supply and sanitation programme in Ilesa West and were funded through an Islamic Development Bank loan facilitated by the Federal Ministry of Finance.
Gamji stated that the original value of Slot 1 was $15.98m, while Slot 2 was valued at $9.70m. It said changes to engineering designs and variations in the scope of work subsequently caused delays and led to revisions of the contract values.
Following the amendments, the value of Slot 1 increased to $20.24m, while Slot 2 rose to $10.95m.
The company further stated that 93 per cent of the projects had been completed by October 2023 and that the Osun State Government issued a Substantial Completion Certificate on November 14, 2024.
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Disagreements later developed between the parties over extensions of time, adjustments to contract prices and increased costs of materials and labour.
Gamji said the state government rejected its claims, while attempts to resolve the disagreement through mediation were unsuccessful. The company subsequently issued an arbitration notice on April 3, 2025.
The Osun State Government accepted the arbitration process and nominated an arbitrator, with preliminary proceedings commencing in Lagos on May 15, 2025.
The arbitral panel eventually delivered its final award on July 24, 2026, directing the state government to pay Gamji $13,924,343.32 and N157.5m in reimbursable arbitration fees.
The panel also imposed an annual interest rate of 20 per cent on any outstanding amount after the deadline for compliance.
Gamji said the compliance period expired on August 24, 2026, without payment from the state government, leading the company to approach the Federal High Court for an interim preservation order.
In granting the application, Justice Osiagor directed the listed banks to immediately restrict withdrawals from the Osun State Government’s accounts and preserve funds up to the value of the arbitration award.
The court ordered that $13,924,343.32 and N157.5m be preserved in the affected accounts pending the hearing and determination of the motion on notice.
The court subsequently adjourned the case until October 22, 2026, when the motion on notice is scheduled to be heard.
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