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 $13.9 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 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 arising from water infrastructure projects in Ilesa West Local Government Area of Osun State.
The financial institutions named in 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.
The dispute dates back to two contracts awarded to Gamji by the Osun State Government in 2017 for water infrastructure works. The projects involved the construction of transmission mains and booster pump stations, as well as water reservoirs, under a water supply and sanitation project in Ilesa West.
Gamji said disagreements later arose over claims relating to extensions of time, price adjustments and increased costs of materials and labour. After mediation efforts failed, the company commenced arbitration proceedings.
According to the company, 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. The award also provided for 20 per cent annual interest on any outstanding balance after the compliance period. Gamji said the August 24 deadline expired without payment.
Justice Osiagor consequently directed the listed banks to preserve funds in the state government’s accounts up to the value of the award pending the hearing and determination of the substantive motion. The case has been adjourned until October 22, 2026.
However, the Osun State Government has challenged the restriction and the underlying arbitration award. The state said it filed an application on October 2 seeking to vacate the Federal High Court order, arguing that Gamji failed to disclose material facts, including the state’s existing legal challenge to the arbitration award before the Lagos State High Court.
The state government also alleged that the arbitration process was irregular and that it was denied fair hearing and full participation. It maintained that the July 2026 award is already being challenged in court, meaning the dispute remains subject to further judicial determination.
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