By - Federal High Court in Lagos orders a “Post No Debit” restriction on Osun State Government accounts across 11 major banks, following an unpaid $13.9m arbitration award
- Dispute traces back to two 2017 water infrastructure contracts in Ilesa West awarded to Gamji Nigeria Company Limited, whose costs escalated from an original $25.68m to $31.19m combined
- An arbitral panel ruled in Gamji’s favour in July, giving Osun until August 24 to pay; the state missed that deadline, prompting the court action
A Federal High Court sitting in Lagos has ordered commercial banks to freeze transactions on accounts belonging to the Osun State Government, after the state failed to settle a $13.9 million arbitration award owed to a contractor over water infrastructure work carried out nearly a decade ago.
Justice D.E. Osiagor issued the interim order in response to an application from Gamji Nigeria Company Limited, filed through its lawyer, Yunus AbdulSalam, SAN, in a suit marked FHC/L/CS/1233/2026. The order instructs banks, including 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, to place a “Post No Debit” restriction on the state’s accounts, preserving $13,924,343.32 and N157.5 million pending further proceedings.
A Contract That Grew Over Nearly a Decade
The dispute originates from two water infrastructure contracts the Osun State Government awarded to Gamji in June 2017, funded through an Islamic Development Bank loan facility arranged by the Federal Ministry of Finance. The work, part of a wider water supply and sanitation project in Ilesa West Local Government Area, covered transmission mains and booster pump stations under what was labelled Slot 1, and water reservoirs under Slot 2.
According to an affidavit filed in support of Gamji’s motion, the contracts were originally valued at $15.98 million for Slot 1 and $9.70 million for Slot 2. Gamji says engineering design changes and scope variations pushed those figures upward over time, eventually revising Slot 1 to $20.24 million and Slot 2 to $10.95 million.
The company says it had completed 93% of the work by October 2023, and that the state government issued a Substantial Completion Certificate on November 14, 2024. What followed, according to the filing, was a dispute over extensions of time, price adjustments, and the escalating cost of materials and labour, claims Gamji says the state government rejected outright.
From Mediation to Arbitration to Court
With mediation unsuccessful, Gamji issued a formal arbitration notice on April 3, 2025. The state government accepted the process and nominated its own arbitrator, and preliminary proceedings opened in Lagos that May. The arbitral panel delivered its final award on July 24, 2026, directing Osun to pay the $13,924,343.32 principal sum plus N157.5 million in reimbursable arbitration fees, with 20% annual interest to accrue on any balance left unpaid once the compliance window closed.
That compliance deadline, August 24, 2026, passed without payment from the state, according to Gamji’s filing, prompting the company to seek the court’s intervention to preserve the funds before pursuing full enforcement of the award.
What the Order Means for Now
Ruling on the application, Justice Osiagor granted the preservation order, directing the named banks to immediately restrict the state government’s accounts up to the value of the award. The court’s ruling specifically describes the order as an interim injunction intended to secure the funds pending a full hearing on Gamji’s substantive motion.
The matter has been adjourned to October 22, 2026, when the court is expected to hear arguments on that motion on notice. Until then, Osun State’s banking relationships with the affected institutions remain constrained by the restriction, though the order does not itself transfer any funds to Gamji, it simply prevents the state from moving money out of the frozen accounts while the underlying enforcement question is resolved.
