By: Ganiyu Olayinka
The Federal High Court in Lagos has ordered commercial banks to place a “Post No Debit” restriction on accounts belonging to the Osun State Government, in connection with a $13.9 million arbitration award in favour of Gamji Nigeria Company Limited.
Justice D.E. Osiagor made 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 N157.5 million awarded to it following an arbitration dispute arising from water infrastructure projects in Ilesa West Local Government Area of Osun State.
The banks named in the application 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.
Background to the Dispute
The case traces back to two contracts awarded to Gamji by the Osun State Government in June 2017 for water infrastructure works. The first, known as Slot 1, covered the construction of transmission mains and booster pump stations, while Slot 2 involved the construction of water reservoirs, both forming part of a broader water supply and sanitation project in Ilesa West. According to Gamji, the projects were to be financed through a loan from the Islamic Development Bank, arranged by the Federal Ministry of Finance.
The company said Slot 1 was originally valued at about $15.98 million and Slot 2 at approximately $9.70 million, but that subsequent changes to engineering designs, scope variations and variation orders led to both delays and cost increases. Following these amendments, Gamji said Slot 1’s value rose to roughly $20.24 million and Slot 2 to about $10.95 million.
The company further claimed that about 93% of the work had been completed by October 2023, with the Osun State Government issuing a Substantial Completion Certificate on November 14, 2024. Disputes later arose, however, over claims involving extensions of time, price adjustments, and rising costs of materials, labour and other inputs. Gamji said several of its claims were rejected by the state government, prompting both parties to attempt mediation before the company issued a formal arbitration notice on April 3, 2025 — which the state government accepted, also nominating its own arbitrator.
The Arbitration and Award
Arbitration proceedings began with a preliminary meeting held in Lagos on May 15, 2025. Gamji said the arbitral panel issued its final award on July 24, 2026, directing the Osun State Government to pay $13,924,343.32 and N157.5 million in reimbursable arbitration fees, with interest at 20% per annum on any outstanding balance after the stipulated compliance period. According to the company, the compliance deadline expired on August 24, 2026, but the awarded sums remained unpaid by the time it approached the court.
The Court’s Order
In the interim order, Justice Osiagor directed the listed financial institutions to place a “Post No Debit” restriction on the Osun State Government’s accounts held with them, preserving funds up to $13,924,343.32 and N157.5 million toward satisfying the arbitral award, pending the hearing and determination of the motion on notice.
Part of the order read: “That 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 for $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 court adjourned the matter until October 22, 2026, for hearing of the motion on notice.
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