Court orders restriction on Osun accounts over $13.9m arbitration award

The Federal High Court in Lagos has ordered banks to place a Post No Debit restriction on Osun State Government accounts over a $13.9m arbitration award in favour of Gamji Nigeria Company Limited.

Justice D.E. Osiagor granted the interim preservation order in suit FHC/L/CS/1233/2026. It directs the listed financial institutions to preserve funds up to $13,924,343.32 and N157.5m while the court considers the company’s application.

The order concerns an arbitration award arising from water infrastructure contracts in Ilesa West Local Government Area. It remains an interim measure pending the hearing and determination of the motion on notice, rather than a final ruling on that application.

Punch reported that it obtained a certified true copy of the ruling on Saturday. The named banks 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.

In its supporting affidavit, Gamji said the dispute began with two contracts awarded in June 2017 for transmission mains, booster pump stations and reservoirs. The company said the projects were financed through an Islamic Development Bank loan arranged by the Federal Ministry of Finance.

Gamji said design changes and alterations to the scope of work caused delays and increased costs. It claimed 93 per cent of the work had been completed by October 2023 and that the state government issued a Substantial Completion Certificate on November 14, 2024.

The company said disagreements followed over extensions of time, price adjustments and higher material and labour costs. After mediation failed, it issued an arbitration notice on April 3, 2025. The state government accepted the process and nominated an arbitrator.

The panel’s award, dated July 24, 2026, directed payment of $13,924,343.32 and N157.5m in reimbursable arbitration fees. It also provided for 20 per cent annual interest on any outstanding balance after the compliance period.

Gamji said the August 24 payment deadline passed without the award being paid, prompting its court application. The matter is scheduled for October 22, 2026, for the hearing of the motion on notice.

Sources: Punch, Daily Post, Vanguard