By Opeyemi Adelakun
The Federal High Court in Lagos has ordered commercial banks to restrict withdrawals from accounts operated by the Osun State Government as part of efforts to secure payment of a $13.9 million arbitration award in favour of Gamji Nigeria Company Limited.
Justice D.E. Osiagor granted the interim preservation order following an application by the company, through its counsel, Yunus AbdulSalam, SAN, in suit number FHC/L/CS/1233/2026.
The order directs the affected financial institutions to place a “Post No Debit” restriction on the state government’s accounts and preserve funds up to $13,924,343.32 and N157.5 million pending the determination of the motion on notice.
The dispute arose from two contracts awarded to Gamji by the Osun State Government in June 2017 for water infrastructure projects in Ilesa West Local Government Area.
The projects involved the construction of transmission mains and booster pump stations under Slot 1, and water reservoirs under Slot 2, as part of a wider water supply and sanitation programme.
According to an affidavit filed in support of the application, the projects were to be financed through a loan from the Islamic Development Bank, arranged by the Federal Ministry of Finance.
Gamji said the original contract values stood at approximately $15.98 million for Slot 1 and $9.70 million for Slot 2.
It alleged that subsequent changes to engineering designs, variations in the scope of work and additional orders led to delays and increases in the contract values.
The company said amendments later raised the value of Slot 1 to about $20.24 million and Slot 2 to approximately $10.95 million.
It further claimed that about 93 per cent of the work had been completed by October 2023, while the state government issued a Substantial Completion Certificate on November 14, 2024.
However, disagreements reportedly emerged over claims involving extensions of time, price adjustments and rising costs of materials, labour and other project inputs.
Gamji said its claims were rejected by the state government, leading to attempts to resolve the dispute through mediation before it issued an arbitration notice on April 3, 2025.
According to the company, the state government accepted the arbitration process and nominated its arbitrator, while proceedings commenced with a preliminary meeting in Lagos on May 15, 2025.
The arbitration panel delivered its final award on July 24, 2026, directing the Osun State Government to pay $13,924,343.32 and N157.5 million as reimbursable arbitration fees.
The award also provided for interest at 20 per cent annually on any outstanding amount after the stipulated compliance period, the company said.
Gamji claimed that the payment deadline expired on August 24, 2026, without the state government settling the awarded sums, prompting its application to the court.
In granting the interim order, Justice Osiagor directed the listed banks to immediately restrict withdrawals from the affected accounts to preserve funds towards the settlement of the award.
The judge ordered that the restriction would remain in place pending the hearing and determination of the motion on notice.
The court adjourned the matter until October 22, 2026, for hearing.
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