The Federal High Court in Lagos has ordered commercial banks to place a “Post No Debit” restriction on bank accounts operated by the Osun State Government over an outstanding $13.9 million 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 a suit marked FHC/L/CS/1233/2026.
The company is seeking to preserve $13,924,343.32 and N157.5 million awarded to it following an arbitration arising from water infrastructure projects executed in Ilesa West Local Government Area of Osun State.
Banks 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 an affidavit filed in support of the application, the dispute arose from two contracts awarded to Gamji by the Osun State Government in June 2017 for water infrastructure works.
The projects involved the construction of transmission mains and booster pump stations under Slot 1, as well as water reservoirs under Slot 2, under a water supply and sanitation project in Ilesa West.
Gamji said the original contract values were $15.98 million for Slot 1 and $9.70 million for Slot 2.
It claimed that changes to the engineering designs and variations in the scope of work caused delays and resulted in revisions to the contract values.
Following the amendments, the value of Slot 1 was increased to $20.24 million, while Slot 2 rose to $10.95 million.
The company further claimed that 93 per cent of the projects had been completed by October 2023, while the state government issued a Substantial Completion Certificate on November 14, 2024.
Disagreements subsequently arose over claims relating to extensions of time, price adjustments and increased costs of materials and labour.
Gamji said the state government rejected its claims, leading to unsuccessful mediation efforts and, eventually, the issuance of an arbitration notice on April 3, 2025.
The state government accepted the arbitration process and nominated its arbitrator, with preliminary proceedings commencing in Lagos on May 15, 2025.
The arbitral panel issued its final award on July 24, 2026, directing the Osun State Government to pay Gamji $13,924,343.32 and N157.5 million in reimbursable arbitration fees.
The panel also awarded interest at 20 per cent annually on any outstanding balance after the expiration of the compliance period.
Gamji said the August 24, 2026 deadline for compliance elapsed without payment by the state government, prompting the company to approach the Federal High Court.
Ruling on the application, Justice Osiagor directed the affected banks to immediately restrict withdrawals from the state government’s accounts and preserve funds up to $13,924,343.32 and N157.5 million towards the satisfaction of the arbitral award.
The order is to remain in place pending the determination of the motion on notice.
The court adjourned the suit until October 22, 2026, for hearing of the motion on notice.
