By Ado Oyeyemi
The Federal High Court in Lagos has ordered several commercial banks to restrict withdrawals from accounts operated by the Osun State Government over a $13.9m arbitration award in favour of Gamji Nigeria Company Limited.
Justice D.E. Osiagor issued the interim preservation order following an application by Gamji through its counsel, Yunus AbdulSalam, SAN, in suit number FHC/L/CS/1233/2026.
The company is seeking to recover $13,924,343.32 and N157.5m awarded to it after an arbitration arising from disputes over water infrastructure projects executed in Ilesa West Local Government Area of the 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.
The dispute reportedly arose from two contracts awarded to Gamji by the Osun State Government in June 2017 for the construction of water infrastructure under a water supply and sanitation project in Ilesa West.
The projects, funded through an Islamic Development Bank loan facility facilitated by the Federal Ministry of Finance, covered the construction of transmission mains and booster pump stations under Slot 1 and water reservoirs under Slot 2.
Gamji said the original contracts were valued at $15.98m and $9.70m respectively, but subsequent engineering design changes and variations in the scope of work led to revisions that increased the values to $20.24m and $10.95m.
The company further claimed that it had completed about 93 per cent of the projects by October 2023, with the state government issuing a Substantial Completion Certificate in November 2024.
However, disagreements reportedly emerged over claims relating to extensions of time, price adjustments and rising costs of materials and labour.
According to the company, its claims were rejected by the state government, while attempts at mediation failed, prompting it to issue an arbitration notice on April 3, 2025.
The arbitration process subsequently commenced, with the state government nominating its arbitrator. After proceedings in Lagos, the arbitral panel delivered its final award on July 24, 2026, directing Osun State to pay Gamji $13,924,343.32 and N157.5m in reimbursable arbitration fees.
The panel also imposed an annual interest rate of 20 per cent on any outstanding amount after the deadline for compliance.
Gamji said the August 24, 2026 deadline for payment expired without the state government settling the award, leading the company to approach the Federal High Court for enforcement and preservation of the funds.
Granting the application, Justice Osiagor directed the banks to immediately place a “Post No Debit” restriction on the Osun State Government’s accounts and preserve funds up to the awarded amounts pending the determination of the substantive application.
The judge ordered the preservation of $13,924,343.32 and N157.5m in the affected accounts towards the enforcement of the arbitral award, which the court said had become due and enforceable.
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The court adjourned the matter until October 22, 2026, for hearing of the motion on notice.
