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A Federal High Court in Lagos has ordered several commercial banks to place a “Post No Debit” restriction on accounts operated by the Osun State Government as part of efforts to preserve funds toward an outstanding arbitral award of more than $13.9 million and ₦157.5 million.

The order followed an application by Gamji Nigeria Company Limited, which is seeking enforcement of an arbitral award arising from a dispute over water infrastructure projects carried out in Ilesa West Local Government Area of Osun State.

Justice D.E. Osiagor issued the interim preservation order in suit No. FHC/L/CS/1233/2026, directing the affected financial institutions to preserve funds up to the value of the award pending further proceedings.

Key Takeaways

The court ordered several banks to place a Post No Debit restriction on relevant Osun State accounts.
Gamji is seeking $13,924,343.32 and ₦157.5 million awarded following an arbitration.
The dispute arose from water infrastructure contracts awarded in Osun State in 2017.
The arbitral panel issued its final award on July 24, 2026.
Gamji said the deadline for payment expired on August 24, 2026 without the required payment.
The Federal High Court has fixed October 22, 2026 for hearing of the motion on notice.

What the Court Ordered

The court directed the financial institutions named in the application to preserve funds belonging to the Osun State Government up to the value of the arbitral award.

The order specifically referred to a Post No Debit restriction, meaning the affected accounts are to be restricted from debit transactions to the extent necessary to preserve the funds covered by the court’s order.

The purpose, according to the order, is to preserve $13,924,343.32 and ₦157,500,000 toward the liquidation of the arbitral award while the substantive application is considered.

The order is therefore a preservation measure connected to the enforcement process. It does not, based on the supplied material, establish that every Osun State account has been completely frozen.

Why Gamji Sought the Account Restriction

Gamji approached the Federal High Court after an arbitral panel directed the Osun State Government to pay the company amounts arising from the dispute over the water infrastructure contracts.

The award covered $13,924,343.32 and ₦157.5 million in reimbursable arbitration expenses.

The panel also imposed an annual interest rate of 20 per cent on any outstanding amount after the compliance period expired.

Gamji told the court that the compliance deadline ended on August 24, 2026, but that the required payment had not been made.

The company consequently sought an order to preserve funds in Osun State accounts while it pursued enforcement of the award.

The Financial Obligation Behind the Case

The sums involved stem from two contracts awarded to Gamji by the Osun State Government in June 2017 for water infrastructure projects in Ilesa West.

The first contract, known as Slot 1, covered transmission mains and booster pump stations, while Slot 2 involved the construction of water reservoirs.

According to Gamji’s affidavit, the projects formed part of a wider water supply and sanitation programme funded through an Islamic Development Bank loan facilitated by the Federal Ministry of Finance.

The initial value of Slot 1 was put at $15.98 million, while Slot 2 was valued at $9.70 million.

How the Contract Values Changed

The company said changes to engineering designs and variations in the scope of work resulted in delays and revisions to the contract values.

Following those amendments, Gamji said the value of Slot 1 rose to $20.24 million, while Slot 2 was revised to $10.95 million.

The company further stated that approximately 93 per cent of the projects had been completed by October 2023.

It said the Osun State Government subsequently issued a Substantial Completion Certificate on November 14, 2024.

The remaining dispute centred on claims involving extensions of time, contract-price adjustments and higher material and labour costs.

From Contract Dispute to Arbitration

According to the company’s account before the court, disagreements developed after the projects progressed and Gamji submitted claims relating to additional costs and other contractual issues.

The company said the Osun State Government rejected its claims.

Attempts to resolve the dispute through mediation were unsuccessful, after which Gamji issued an arbitration notice on April 3, 2025.

The state government reportedly accepted the arbitration process and nominated its arbitrator.

Preliminary proceedings subsequently took place in Lagos on May 15, 2025.

The arbitration eventually resulted in a final award dated July 24, 2026.

What the Arbitration Award Requires

The arbitral panel directed the Osun State Government to pay Gamji:

$13,924,343.32; and
₦157.5 million in reimbursable arbitration expenses.

The award also provided for 20 per cent annual interest on any outstanding amount after the compliance period expired.

With the payment deadline having passed, Gamji turned to the Federal High Court to seek preservation of funds that could be used toward enforcement of the award.

Banks Named in the Court Order

The financial institutions listed in the order include:

Guaranty Trust Bank
Access Bank
First Bank
Zenith Bank
United Bank for Africa
Ecobank
Fidelity Bank
Stanbic IBTC
Sterling Bank
Union Bank
Wema Bank

The order covers the preservation of relevant funds held with the cited institutions up to the value specified by the court.

What the Restriction Means for Osun

The immediate significance of the order is that funds covered by the preservation directive cannot simply be withdrawn from the affected accounts while the matter progresses through the court process.

However, the supplied material does not establish that the order amounts to a blanket freeze on all Osun State finances.

The stated purpose is to preserve funds toward the arbitral award pending the hearing and determination of Gamji’s substantive application.

That distinction is important because the court order is part of an ongoing enforcement process rather than a final account of the state’s overall financial position.

Why the Case Matters for Public Finance

The dispute illustrates how contractual obligations arising from public infrastructure projects can eventually create financial liabilities for a government when disagreements over project costs, variations and payment are not resolved.

In this case, the underlying contracts concerned water infrastructure, while the current court proceedings centre on the enforcement of the resulting arbitral award.

The financial significance is therefore tied not only to the size of the award but also to the consequences of failing to resolve contractual disputes before they reach enforcement proceedings.

The supplied material, however, does not provide enough information to determine the wider effect of the award on Osun State’s overall budget or finances.

What Happens Next?

Justice Osiagor adjourned the matter until October 22, 2026, when the motion on notice is scheduled to be heard.

Until then, the interim preservation order remains the immediate development described in the case.

The next stage of the proceedings should provide further clarity on Gamji’s application and the enforcement of the arbitral award.

Frequently Asked Questions

Why did the court order banks to restrict Osun State accounts?

The order followed Gamji Nigeria Company Limited’s application seeking to preserve funds toward an arbitral award that the company says Osun State has not paid after the compliance deadline expired.

How much is involved in the arbitral award?

The award covers $13,924,343.32 and ₦157.5 million in reimbursable arbitration expenses.

What does “Post No Debit” mean?

In the context of the order, it is a restriction intended to prevent debit transactions from the affected accounts to the extent necessary to preserve funds covered by the court’s directive.

What caused the dispute?

The dispute arose from two 2017 water infrastructure contracts awarded to Gamji for projects in Ilesa West Local Government Area of Osun State.

What were the projects?

The contracts involved transmission mains and booster pump stations under Slot 1 and water reservoirs under Slot 2.

When was the arbitral award issued?

The final arbitral award was issued on July 24, 2026.

When did the payment deadline expire?

Gamji told the court that the compliance deadline expired on August 24, 2026.

When will the Federal High Court hear the matter again?

The matter has been adjourned until October 22, 2026, for hearing of the motion on notice.

Conclusion

The Federal High Court’s interim order places the focus on the financial consequences of an unresolved contract dispute between the Osun State Government and Gamji Nigeria Company Limited.

At the centre of the case is an arbitral award worth $13.9 million and ₦157.5 million, alongside a 20 per cent annual interest provision on outstanding sums after the compliance period.

For now, the court’s intervention is aimed at preserving funds while the enforcement proceedings continue. The next significant development will come when the court considers the substantive application on October 22, 2026.

What do you think about the use of court-ordered account restrictions to enforce arbitral awards involving government contracts? Share your thoughts in the comments.

TAGS: Federal High Court in Abuja