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 arbitration award of $13.9 million and N157.5 million in favour of Gamji Nigeria Company Limited.
Justice D.E. Osiagor issued the interim preservation order following an application by Gamji Nigeria Company Limited through its counsel, Yunus AbdulSalam, SAN, in suit number FHC/L/CS/1233/2026.
A certified true copy of the ruling was made available to journalists on Saturday.
The company is seeking to preserve $13,924,343.32 and N157.5 million awarded to it following an arbitration dispute arising from water infrastructure projects executed in Ilesa West Local Government Area of Osun State.
The financial institutions affected by 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, among others.
According to court documents, the dispute arose from two contracts awarded to Gamji by the Osun State Government in June 2017 for water infrastructure projects in Ilesa West.
The first contract, known as Slot 1, covered the construction of transmission mains and booster pump stations, while Slot 2 involved the construction of water reservoirs under a water supply and sanitation project.
Gamji said the projects were financed through an Islamic Development Bank loan facility facilitated by the Federal Ministry of Finance.
The original value of Slot 1 was put at $15.98 million, while Slot 2 was valued at $9.70 million.
However, subsequent engineering design changes and variations in the scope of work allegedly caused delays and increased the cost of the projects.
The value of Slot 1 consequently rose to $20.24 million, while Slot 2 increased to $10.95 million.
Gamji told the court that it had completed approximately 93 per cent of the contracted works by October 2023, after which the Osun State Government issued a Substantial Completion Certificate on November 14, 2024.
Disagreements subsequently emerged over claims relating to extensions of time, price adjustments and increased costs of materials and labour.
The company said the state government rejected the claims, while attempts to resolve the dispute through mediation failed.
Gamji subsequently issued an arbitration notice on April 3, 2025, which was accepted by the Osun State Government. The state also nominated its arbitrator, with preliminary proceedings held in Lagos on May 15, 2025.
Following the arbitration proceedings, the panel delivered its final award on July 24, 2026.
The panel ordered the Osun State Government to pay Gamji $13,924,343.32 and N157.5 million in reimbursable arbitration fees.
It also awarded interest at 20 per cent annually on any outstanding amount after the expiration of the stipulated compliance period.
Gamji said the compliance deadline expired on August 24, 2026, without payment by the state government.
The company subsequently approached the Federal High Court seeking preservation of funds in the state’s bank accounts pending enforcement of the arbitral award.
In granting the interim application, Justice Osiagor directed the affected banks to immediately restrict transactions on the relevant Osun State Government accounts.
The court ordered the preservation of funds up to $13,924,343.32 and N157.5 million pending the hearing and determination of the motion on notice.
The order reads in part: “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 restriction temporarily prevents withdrawals and other debit transactions from the affected accounts up to the amount specified by the court.
The case has been adjourned until October 22, 2026, when the motion on notice is scheduled for hearing.
The order places the Osun State Government under a court-imposed financial restriction as the legal process to enforce the arbitration award over the Ilesa West water infrastructure projects continues.
