Court freezes Osun accounts over $13.9m arbitration award

By Nnamdi Ojiego

The Federal High Court in Lagos has ordered commercial banks to place a ‘Post No Debit’ restriction on 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 order following an application filed by Gamji through its counsel, Yunus AbdulSalam, SAN, in a suit marked FHC/L/CS/1233/2026.
The company is seeking to preserve $13,924,343.32 and N157.5m which, it said, were awarded to it following an arbitration arising from water infrastructure projects in Ilesa West Local Government Area of Osun State.
The financial institutions named in the application 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.
Dispute over water projects
According to an affidavit filed in support of the application, the dispute arose from two contracts awarded to Gamji by Osun State Government in June 2017 for water infrastructure works.
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 broader water supply and sanitation project in Ilesa West.
Gamji said the projects were to be financed through a loan from the Islamic Development Bank, arranged by the Federal Ministry of Finance.
The company said the original contract value for Slot 1 was about $15.98m, while Slot 2 was valued at approximately $9.70m.
It alleged that changes to engineering designs, variations in the scope of work and variation orders resulted in delays and increases in the contract values.
According to the affidavit, subsequent amendments raised the value of Slot 1 to about $20.24m and Slot 2 to approximately $10.95m.
Gamji further claimed that about 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.
Arbitration
The company said disagreements later arose over claims relating to extensions of time, price adjustments and increases in the cost of materials, labour and other inputs.
Gamji said it submitted several claims which were rejected by the state government, prompting attempts by the parties to resolve the dispute through mediation.
It said it subsequently issued an arbitration notice on April 3, 2025, while the state government accepted the arbitration process and nominated its arbitrator
The arbitration panel commenced proceedings, with a preliminary meeting held in Lagos on May 15, 2025.
According to Gamji, the panel delivered its final award on July 24, 2026, ordering the Osun State Government to pay $13,924,343.32 and N157.5m described as reimbursable arbitration fees.
The company also said the award provided for interest at 20 per cent per annum on any outstanding portion of the debt after the stipulated compliance period.
Gamji said the deadline for compliance expired on August 24, 2026, but that the awarded sums remained unpaid when it filed the court application.
Court order.

In the interim order, Justice Osiagor directed the listed financial institutions to place a “Post No Debit” restriction on the Osun State Government’s accounts maintained with them.
The judge ordered the preservation of funds up to the value of $13,924,343.32 and N157.5m towards the liquidation of the arbitral award, pending the hearing and determination of the motion on notice.
The order partly read: “That a preservation order of interim injunction is granted directing the cited financial institutions in Nigeria to immediately place a Post No Debit restriction on the Respondent’s account domiciled with them for the preservation of the funds with them in the sum of $13,924,343.32 … and N157,500,000.00 … towards the liquidation of the Arbitral Award dated 24th July, 2026 which has become due and enforceable; pending the hearing and determination of the motion on notice.”
The court adjourned the matter until October 22, 2026, for hearing of the motion on notice.