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 $13.9m arbitration award in favour of Gamji Nigeria Company Limited.
Justice D.E. Osiagor issued the interim order after Gamji, through its counsel, Yunus AbdulSalam, filed an application in a suit marked FHC/L/CS/1233/2026.
The company is seeking to recover $13,924,343.32 and N157.5m awarded to it following an arbitration arising from water infrastructure projects in Ilesa West Local Government Area of Osun State.
The 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 court documents, the dispute stemmed from two contracts the Osun State Government awarded to Gamji in June 2017 for water infrastructure works.
The first contract covered the construction of transmission mains and booster pump stations, while the second involved the construction of water reservoirs under a water supply and sanitation project in Ilesa West.
Gamji said the Islamic Development Bank funded the projects through a loan facility facilitated by the Federal Ministry of Finance.
The company said the first contract was initially valued at $15.98m, while the second was worth $9.70m.
It said changes to the engineering designs and variations in the scope of work subsequently delayed the projects and led to revisions in the contract values.
According to the company, the value of the first contract increased to $20.24m, while the second rose to $10.95m.
Gamji further claimed that it had completed about 93 per cent of the work by October 2023, after which the Osun State Government issued a Substantial Completion Certificate on November 14, 2024.
However, disagreements later emerged over claims involving extensions of time, price adjustments and rising material and labour costs.
Gamji said the state government rejected its claims, while efforts to resolve the dispute through mediation failed.
The company subsequently issued an arbitration notice on April 3, 2025. The Osun State Government accepted the arbitration process and nominated its arbitrator.
The arbitral panel eventually issued 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 award also imposed a 20 per cent annual interest on any outstanding balance after the compliance period.
Gamji said the compliance deadline expired on August 24 without payment, prompting it to approach the Federal High Court for an order to preserve funds in the state government’s bank accounts.
Granting the interim application, Justice Osiagor directed the affected banks to place a “Post No Debit” restriction on the accounts and preserve funds up to $13,924,343.32 and N157.5m towards the settlement of the arbitral award.
The court order partly read, “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 order is interim and does not constitute a final determination of the substantive application before the court.
The court adjourned the matter until October 22 for hearing of the motion on notice.
