The Federal High Court in Lagos has ordered several commercial banks to place a “Post No Debit” restriction on accounts operated by the Osun State Government over an outstanding arbitration award of $13.9 million in favour of Gamji Nigeria Company Limited.
Justice D.E. Osiagor issued the interim order following an application filed by Gamji through its counsel, Yunus AbdulSalam, SAN, in a suit marked FHC/L/CS/1233/2026.
The company is seeking to enforce an arbitral award requiring the Osun State Government to pay $13,924,343.32 and N157.5 million arising from water infrastructure projects carried out in Ilesa West Local Government Area.
The court directed several financial institutions to preserve funds in the state government’s accounts up to the value of the award pending the hearing and determination of Gamji’s substantive application.
The banks 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.
The court’s directive means the affected accounts are temporarily restricted from withdrawals to the extent necessary to preserve the funds required to satisfy the arbitration award.
DISPUTE OVER ILESA WATER PROJECTS
The dispute dates back to June 2017, when the Osun State Government awarded two contracts to Gamji for water infrastructure projects in Ilesa West.
The projects involved the construction of transmission mains and booster pump stations under one contract, as well as water reservoirs under another.
The projects formed part of a wider water supply and sanitation programme funded through an Islamic Development Bank loan facility facilitated by the Federal Ministry of Finance.
Gamji said the original value of the first contract was $15.98 million, while the second was valued at $9.70 million.
According to the company, changes to engineering designs and variations in the scope of work caused delays and resulted in revisions to the contract values.
The amended contract values were subsequently put at $20.24 million for the first project and $10.95 million for the second.
Gamji said it had completed about 93 per cent of the work by October 2023, after which the state government issued a Substantial Completion Certificate on November 14, 2024.
However, disagreements later emerged over claims relating to extensions of time, contract price adjustments and increased costs of materials and labour.
The company said the state government rejected its claims, while attempts to resolve the dispute through mediation were unsuccessful.
ARBITRATION PRODUCES $13.9M AWARD
Gamji issued an arbitration notice on April 3, 2025, after which the Osun State Government accepted the arbitration process and nominated its arbitrator.
Preliminary proceedings were subsequently held in Lagos on May 15, 2025.
On July 24, 2026, the arbitral panel issued its final award, directing the Osun State Government to pay Gamji $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 stipulated compliance period.
Gamji told the court that the deadline for compliance expired on August 24, 2026, without payment from the state government.
The company subsequently approached the Federal High Court seeking to preserve funds in the government’s accounts pending enforcement of the award.
OSUN GOVERNMENT CHALLENGES THE ORDER
The Osun State Government, however, has asked the Federal High Court to set aside the order.
The state’s Commissioner for Information and Public Enlightenment, Kolapo Alimi, said the government had filed an application seeking to vacate the ex-parte order.
Alimi alleged that the order was obtained through “fraud, deceit and concealment of material facts” and described the arbitration award as “rigged, dishonest and fake.”
He also alleged that the arbitration process was deliberately mismanaged and that the state government was denied a fair opportunity to participate fully in the proceedings.
According to the commissioner, the state government’s lawyers initially filed a case challenging the arbitration award but later discontinued it.
He said a fresh case was subsequently filed at the Lagos State High Court on September 1, seeking to set aside the award on the grounds that Lagos was the designated seat of the arbitration.
The state government also filed an application asking the Lagos State High Court to suspend enforcement of the award pending the determination of its challenge.
Alimi said the relevant court processes were served on Gamji and its lawyers. He alleged that the company subsequently approached the Federal High Court to enforce the same award despite being aware that the award was already being challenged before the Lagos State High Court.
The commissioner further alleged that Gamji failed to disclose the pending Lagos case and the application seeking to suspend enforcement when it approached the Federal High Court.
According to him, the alleged non-disclosure led to the ex-parte order issued by the court.
CASE ADJOURNED TO OCTOBER 22
The Federal High Court has adjourned the matter until October 22, 2026, for the hearing of the motion on notice.
The current order is an interim preservation measure and does not constitute a final determination of the dispute between the Osun State Government and Gamji.
The state government maintains that it is pursuing the necessary legal steps to challenge the arbitration award and has indicated that it will refrain from making further comments on the substantive issues while the matter remains before the courts.
