The Federal High Court in Lagos has ordered commercial banks to restrict the bank accounts of 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 following an application by Gamji through its counsel, Yunus AbdulSalam, SAN, in a suit marked FHC/L/CS/1233/2026.
The Punch reported that the company is seeking to preserve $13,924,343.32 and N157.5m awarded to it after an arbitration arising from water infrastructure projects executed in the 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 the 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 the execution of water infrastructure projects.
The contracts covered the construction of transmission mains and booster pump stations under Slot 1, as well as water reservoirs under Slot 2, under a water supply and sanitation project in Ilesa West.
Gamji said the projects were financed through an Islamic Development Bank loan facility facilitated by the Federal Ministry of Finance.
It stated that the initial value of Slot 1 was $15.98m, while Slot 2 was valued at $9.70m.
According to the company, changes to the engineering designs and variations in the scope of work resulted in delays and revisions to the project costs.
Following subsequent amendments, the value of Slot 1 rose to $20.24m, while Slot 2 increased to $10.95m.
Gamji further claimed that 93 per cent of the work had been completed by October 2023, while the Osun State Government issued a Substantial Completion Certificate on November 14, 2024.
However, disagreements reportedly emerged over extensions of time, price adjustments and increased costs of materials and labour.
The company said its claims were rejected by the state government, while attempts to resolve the dispute through mediation failed. It subsequently issued 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 eventually issued its final award on July 24, 2026, directing the Osun State Government to pay $13,924,343.32 and N157.5m in reimbursable arbitration fees.
The panel also awarded 20 per cent annual interest on any outstanding amount after the expiration of the compliance period.
Gamji said the August 24, 2026 deadline for compliance elapsed without payment by the state government, leading to the company’s application before the Federal High Court.
In his ruling, Justice Osiagor directed the listed banks to immediately restrict the accounts operated by the Osun State Government and preserve funds equivalent to the amounts awarded.
The judge said, “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 suit until October 22, 2026, for hearing of the motion on notice.
