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 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 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 which it said were awarded to it following an arbitration dispute over water infrastructure projects in Ilesa West Local Government Area of Osun State.

Dispute Over Water Infrastructure Projects

The dispute arose from two contracts awarded to Gamji by the Osun State Government in June 2017 for water infrastructure works.

The first contract, known as Slot 1, involved the construction of transmission mains and booster pump stations, while Slot 2 covered the construction of water reservoirs as part of a broader water supply and sanitation project in Ilesa West.

Gamji said the projects were to be financed through a loan from the Islamic Development Bank, arranged by the Federal Ministry of Finance.

According to the company, the original value of Slot 1 was approximately $15.98 million, while Slot 2 was valued at about $9.70 million.

It said changes to engineering designs, variations in the scope of work and variation orders subsequently led to delays and increased contract values.

Following the amendments, Gamji said the value of Slot 1 rose to about $20.24 million, while Slot 2 increased to approximately $10.95 million.

The company further claimed that about 93 per cent of the work had been completed by October 2023 and that the Osun State Government issued a Substantial Completion Certificate on November 14, 2024.

Arbitration Proceedings

Disagreements later emerged over claims relating to extensions of time, price adjustments and increased costs of materials, labour and other inputs.

Gamji said several claims it submitted were rejected by the state government, leading the parties to attempt mediation.

The company subsequently issued an arbitration notice on April 3, 2025. It said the state government accepted the arbitration process and nominated its arbitrator.

The arbitration panel commenced proceedings, with a preliminary meeting held in Lagos on May 15, 2025.

According to Gamji, the panel delivered its final award on July 24, 2026, directing the Osun State Government to pay $13,924,343.32 and N157.5 million described as reimbursable arbitration fees.

The company said the award also provided for interest at 20 per cent per annum on any outstanding portion of the debt after the stipulated compliance period.

Gamji said the deadline for compliance expired on August 24, 2026, but that the awarded sums remained unpaid when it approached the court.

Banks Ordered To Restrict Accounts

In the interim order, Justice Osiagor directed the financial institutions listed in the application to place a “Post No Debit” restriction on Osun State Government accounts maintained with them.

The order covers funds up to $13,924,343.32 and N157.5 million, pending the hearing and determination of the motion on notice.

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.

The court said the restriction was intended to preserve the funds towards the liquidation of the arbitral award, which Gamji described as due and enforceable.

Case Adjourned To October 22

The Federal High Court adjourned the matter until October 22, 2026, for hearing of the motion on notice.

The latest order is therefore an interim preservation measure pending further proceedings in the case.

The dispute stems from the contractual and arbitration claims between Gamji Nigeria Company Limited and the Osun State Government over the water infrastructure projects.