Court Orders Post No Debit Restriction On Osun Government Accounts Over $13.9m Arbitration Award
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 a suit marked FHC/L/CS/1233/2026.
A certified true copy of the ruling was obtained on Saturday.
The company is seeking to preserve $13,924,343.32 and N157.5 million awarded to it following an arbitration proceeding arising from water infrastructure projects in Ilesa West Local Government Area of Osun State.
The affected financial institutions 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 an affidavit filed in support of the application, the dispute arose from two contracts awarded to Gamji by the Osun State Government in June 2017 for water infrastructure projects.
The projects involved the construction of transmission mains and booster pump stations under Slot 1, as well as water reservoirs under Slot 2, as part of a water supply and sanitation project in Ilesa West.
Gamji stated that the projects were funded through an Islamic Development Bank loan facility facilitated by the Federal Ministry of Finance.
The company said the original contract values were $15.98 million for Slot 1 and $9.70 million for Slot 2, adding that engineering design changes and variations in scope resulted in delays and revisions to the project costs.
Following subsequent amendments, the value of Slot 1 was increased to $20.24 million, while Slot 2 was revised to $10.95 million.
Gamji further claimed that 93 per cent of the contract works had been completed by October 2023, with the state government issuing a Substantial Completion Certificate on November 14, 2024.
The company said disagreements later emerged over claims relating to extensions of time, price adjustments and increased costs of materials and labour.
According to Gamji, the state government rejected its claims, leading to unsuccessful mediation efforts and the eventual issuance of an arbitration notice on April 3, 2025.
The state government accepted the arbitration process and nominated its arbitrator, with preliminary proceedings held in Lagos on May 15, 2025.
The arbitral panel subsequently 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 panel also awarded 20 per cent annual interest on any outstanding balance after the expiration of the compliance period.
Gamji said the compliance deadline expired on August 24, 2026, without payment by the state government, prompting the company to approach the court.
Ruling on the application, Justice Osiagor directed the listed financial institutions to immediately place a “Post No Debit” restriction on the accounts of the Osun State Government.
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, in the interim order, directed the banks to preserve the specified funds pending the determination of the substantive application.
The suit was adjourned until October 22, 2026, for hearing of the motion on notice.