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 over 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 in an arbitration dispute arising from water infrastructure projects in Ilesa West Local Government Area of Osun State.

The banks listed 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 dispute dates back to two contracts awarded to Gamji by the Osun State Government in June 2017 for water infrastructure works.

The first contract, known as Slot 1, covered the construction of transmission mains and booster pump stations, while Slot 2 involved the construction of water reservoirs under 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 about $15.98 million, while Slot 2 was valued at approximately $9.70 million.

It said subsequent changes to engineering designs, variations in the scope of work and variation orders led to delays and increases in the 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, with the Osun State Government issuing a Substantial Completion Certificate on November 14, 2024.

However, disagreements later emerged over claims involving 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 to attempts by both parties to settle the dispute through mediation.

It subsequently issued an arbitration notice on April 3, 2025, which the state government accepted, while also nominating its arbitrator.

The arbitration proceedings commenced, 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.

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

According to Gamji, the deadline for compliance expired on August 24, 2026, but the awarded sums had not been paid when it approached the court.

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.

The judge ordered the preservation of funds up to $13,924,343.32 and N157.5 million towards the liquidation of the arbitral award pending the hearing and determination of the motion on notice.

The court order partly 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 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 court adjourned the matter until October 22, 2026, for hearing of the motion on notice.