The Federal High Court in Lagos has ordered several commercial banks to restrict withdrawals from accounts belonging to the Osun State Government over an outstanding $13.9m arbitration award in favour of Gamji Nigeria Company Limited.
Justice D.E. Osiagor issued the interim preservation order after Gamji, through its counsel, Yunus AbdulSalam, SAN, filed an application in suit number FHC/L/CS/1233/2026.
The company is seeking to recover $13,924,343.32 and N157.5m awarded to it following an arbitration arising from water infrastructure projects executed 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 documents filed before the court, the dispute originated from two contracts awarded to Gamji by the Osun State Government in June 2017 for the development of water infrastructure.
The projects covered the construction of transmission mains and booster pump stations under Slot 1, as well as water reservoirs under Slot 2, under a broader water supply and sanitation programme in Ilesa West.
Gamji said the projects were financed through an Islamic Development Bank loan facility arranged through the Federal Ministry of Finance.
The company said the initial contract values stood at $15.98m for Slot 1 and $9.70m for Slot 2.
It explained that changes to engineering designs and variations in the scope of work resulted in delays and subsequent revisions to the project costs.
Following the amendments, the value of Slot 1 increased to $20.24m, while Slot 2 was revised to $10.95m.
Gamji further told the court that about 93 per cent of the projects had been completed by October 2023, while the state government issued a Substantial Completion Certificate on November 14, 2024.
However, disagreements later emerged over claims relating to extensions of time, adjustments in contract prices and increased costs of materials and labour.
The company said the state government rejected its claims, leading to unsuccessful attempts at mediation before it issued a notice of arbitration on April 3, 2025.
The state government subsequently accepted the arbitration process and nominated its arbitrator, with preliminary proceedings commencing in Lagos on May 15, 2025.
On July 24, 2026, the arbitral panel delivered its final award, directing the Osun State Government to pay Gamji $13,924,343.32 and N157.5m in reimbursable arbitration costs.
The panel also imposed an annual interest rate of 20 per cent on any outstanding amount after the expiration of the compliance period.
Gamji said the deadline for compliance expired on August 24, 2026, without payment by the state government, prompting the company to approach the Federal High Court for an interim preservation order.
In his ruling, Justice Osiagor directed the listed banks to place a “Post No Debit” restriction on the Osun State Government’s accounts and preserve funds up to the awarded sums pending the determination of the substantive application.
The court ordered the preservation of $13,924,343.32 and N157.5m towards the enforcement of the arbitral award.
The judge adjourned the case until October 22, 2026, for hearing of the motion on notice.
