The Federal High Court in Lagos has ordered commercial banks to restrict withdrawals from accounts operated by the Osun State Government over an unpaid arbitration award of $13.9 million and N157.5 million.
Justice D.E. Osiagor granted the interim order after Gamji Nigeria Company Limited approached the court seeking to preserve funds belonging to the state government.
The case, marked FHC/L/CS/1233/2026, centres on a long-running dispute between Gamji and the Osun State Government over water infrastructure projects carried out in Ilesa West Local Government Area.
The court directed several banks holding accounts belonging to the state government to place a “Post No Debit” restriction on the affected accounts.
The order means that the banks are to prevent withdrawals or other debit transactions from the accounts to the extent required to preserve the amount covered by the arbitration award.
The financial institutions listed in 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.
Gamji is seeking to recover $13,924,343.32 and N157.5 million awarded to it following arbitration proceedings arising from contracts entered into with the Osun State Government.
The dispute dates back to June 2017 when the state government awarded two contracts to the company for water infrastructure works in Ilesa West.
One of the contracts, identified as Slot 1, involved the construction of transmission mains and booster pump stations.
The second contract, known as Slot 2, covered the construction of water reservoirs.
The projects formed part of a broader water supply and sanitation programme in the area.
According to documents filed before the court, the projects were funded through an Islamic Development Bank loan facility facilitated by the Federal Ministry of Finance.
The initial value of the Slot 1 contract was put at about $15.98 million, while Slot 2 was valued at approximately $9.70 million.
However, changes to the engineering designs and variations in the scope of work later affected the projects.
Gamji said the changes resulted in delays and additional costs. The company subsequently sought revisions to the contract values.
The revised value of Slot 1 was said to have risen to $20.24 million, while Slot 2 increased to $10.95 million.
The company further told the court that substantial progress had been made on the projects despite the disagreements.
Gamji claimed that about 93 per cent of the work had been completed by October 2023.
It also stated that the Osun State Government issued a Substantial Completion Certificate on November 14, 2024.
The dispute, however, did not end with the completion of most of the works.
Issues later emerged between the company and the state government over extensions of time, price adjustments and increased costs of materials and labour.
Gamji said some of its claims were rejected by the state government.
Attempts to settle the disagreement through mediation were unsuccessful.
The company subsequently issued a notice of arbitration on April 3, 2025.
The Osun State Government accepted the arbitration process and nominated an arbitrator to represent it.
Preliminary proceedings were then held in Lagos on May 15, 2025.
The arbitration process eventually resulted in a final award on July 24, 2026.
The arbitral panel directed the Osun State Government to pay Gamji $13,924,343.32.
It also awarded N157.5 million in reimbursable arbitration fees.
In addition, the panel imposed an annual interest rate of 20 per cent on any outstanding amount after the expiration of the period allowed for compliance.
Gamji said the deadline for the state government to comply with the award expired on August 24, 2026.
According to the company, the payment was not made by the deadline.
It was against this background that Gamji returned to court to seek an order protecting funds in the state’s bank accounts pending further proceedings to enforce the arbitral award.
Justice Osiagor subsequently granted the interim preservation order.
The judge directed the affected financial institutions to immediately place the “Post No Debit” restriction on the accounts operated by the Osun State Government.
The order specifically limited the preservation to the sums of $13,924,343.32 and N157.5 million.
The court said the restriction was necessary towards the liquidation of the arbitration award, which it described as due and enforceable, pending the hearing and determination of the substantive application.
The judge stated in the order:
“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 an interim measure and comes as the substantive legal process over enforcement of the arbitration award continues.
The development also comes less than two months after the Osun State Government faced another dispute over restrictions placed on some of its bank accounts.
In a related development, Politics Nigeria earlier reported that the Economic and Financial Crimes Commission had in August restricted one of the state’s accounts as part of an investigation into alleged financial transactions involving about N11 billion.
The action generated a legal and political dispute between the state government and the anti-graft agency, particularly because it occurred shortly before the August 15 governorship election.
The Federal Government later directed the lifting of the restriction, and the affected accounts were subsequently reported to have become operational.
Nonetheless, the Osun State Government withdrew its legal action against the EFCC following the lifting of restrictions on its accounts after intervention by President Bola Tinubu.
Governor Ademola Adeleke said he instructed the state Attorney-General to discontinue the case after the President personally contacted him over the matter.
However, the latest court order, however, is separate from that earlier EFCC matter.
This time, the restriction followed an application by a private company seeking to preserve funds connected to an arbitration award arising from contractual dealings with the state government.
The Federal High Court has fixed October 22, 2026, for the hearing of the motion on notice.
Until then, the interim restriction remains in place in respect of the accounts and amounts covered by the court order.
