Court Restricts Osun Government Accounts Over $13.9m Gamji Arbitration Award
Reloaded News Desk
The Federal High Court in Lagos has ordered several commercial banks to place a Post No Debit (PND) restriction on accounts operated by the Osun State Government in connection with a $13,924,343.32 arbitration award and ₦157.5 million in reimbursable arbitration fees in favour of Gamji Nigeria Company Limited.
The interim order was made by Justice D.E. Osiagor in suit FHC/L/CS/1233/2026, following an application by Gamji through its counsel, Yunus AbdulSalam, SAN.
The company is seeking to preserve funds in the affected accounts pending further proceedings relating to the enforcement of an arbitral award arising from a dispute over water infrastructure projects in Ilesa West Local Government Area of Osun State.
The banks named in reports of the court order 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.
How the dispute began
According to an affidavit filed in support of Gamji’s application, the dispute arose from two contracts awarded to the company by the Osun State Government in June 2017 for water infrastructure works in Ilesa West.
The projects included the construction of transmission mains and booster pump stations under one contract, and water reservoirs under another, as part of a water supply and sanitation project.
Gamji said the original contract values were about $15.98 million for Slot 1 and $9.70 million for Slot 2.
The company subsequently raised claims relating to engineering design alterations, variations in the scope of work, extensions of time and increases in the cost of materials and labour. According to the court-related reports, the revised values of the two contracts rose to approximately $20.24 million and $10.95 million, respectively.
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.
According to reports based on the court filings, disagreements over the claims were not resolved through mediation.
Gamji subsequently issued an arbitration notice on April 3, 2025.
The Osun State Government accepted the arbitration process and nominated its arbitrator. Preliminary proceedings were held in Lagos on May 15, 2025.
The arbitral panel eventually issued its final award on July 24, 2026.
The award directed the Osun State Government to pay Gamji $13,924,343.32, in addition to ₦157.5 million described as reimbursable arbitration fees.
The award also provided for 20 per cent annual interest on any outstanding amount after the stipulated compliance period.
Gamji told the court that the compliance deadline expired on August 24, 2026, without payment of the awarded sums, leading the company to seek an order preserving funds in the state government’s accounts.
What the Federal High Court ordered
In granting the interim application, Justice Osiagor directed the affected financial institutions to place a Post No Debit restriction on the relevant Osun State Government accounts.
The order directed the banks to preserve funds up to $13,924,343.32 and ₦157.5 million towards liquidation of the arbitral award, pending the hearing and determination of the motion on notice.
The court’s order described the arbitral award of July 24 as having become due and enforceable for the purpose of the preservation order.
The restriction is therefore a court-ordered measure aimed at preserving funds against the value of the award while the matter proceeds. It is not the same as a final judgment determining every issue in the underlying dispute.
What a Post No Debit order means
A Post No Debit restriction generally prevents debit transactions from an account subject to the restriction. In this case, the court specifically directed the listed banks to preserve funds in the Osun State Government accounts towards the arbitral award.
However, the available court reports do not establish that every Osun State Government bank account nationwide has been completely frozen, nor do they establish that every government financial obligation, including workers’ salaries, has automatically been stopped.
The practical effect will depend on the specific accounts covered by the order, the funds available in them and how the banks implement the court’s directive.
October 22 hearing
The Federal High Court has adjourned the matter until October 22, 2026, for hearing of the motion on notice.
That hearing will provide an important next stage in the proceedings, particularly as the interim preservation order remains subject to the court’s further consideration.
The development comes months after the state government faced another restriction involving some of its accounts in connection with an Economic and Financial Crimes Commission investigation, although that earlier matter involved different allegations and circumstances and should not be conflated with the present Gamji arbitration dispute.
The present case is therefore centred on the enforcement and preservation of funds in relation to an arbitral award arising from a 2017 water infrastructure contract, rather than a corruption finding against the Osun State Government.
The Federal High Court’s October 22 proceedings are expected to determine the next stage of the application brought by Gamji.
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