THE Federal High Court in Lagos has ordered commercial banks to place a “Post No Debit” restriction on bank accounts operated by the Osun State Government over an outstanding $13.9m arbitration award in favour of Gamji Nigeria Company Limited.
D.E. Osiagor, a justice of the High Court, issued the interim order following an application filed by Gamji through its counsel, Yunus AbdulSalam, a senior advocate, in a suit marked FHC/L/CS/1233/2026.
The PUNCH reported on Sunday, October 4, that the company is seeking to preserve $13,924,343.32 and N157.5 million awarded to it following an arbitration proceeding arising from water infrastructure projects in Ilesa West Local Government Area of Osun State.
The financial institutions affected by 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 and Wema Bank.
The dispute reportedly arose from two contracts awarded to Gamji by the Osun State Government in June 2017 for water infrastructure projects.
The contracts covered the construction of transmission mains and booster pump stations under Slot 1 and water reservoirs under Slot 2, as part of a water supply and sanitation project in Ilesa West.
According to the company, the projects were funded through an Islamic Development Bank loan facility facilitated by the Federal Ministry of Finance.
The original contract values were put at $15.98m for Slot 1 and $9.70 million for Slot 2.
Gamji said engineering design changes and variations in the scope of work caused delays and led to revisions of the contract values.
Following subsequent amendments, the value of Slot 1 rose to $20.24 million, while Slot 2 increased to $10.95 million .
The company claimed that 93 per cent of the projects had been completed by October 2023, with the Osun State Government issuing a Substantial Completion Certificate on November 14, 2024.
However, disagreements later emerged over extensions of time, price adjustments and increased costs of materials and labour.
Gamji said the state government rejected its claims, leading to unsuccessful mediation efforts and, eventually, the issuance of an arbitration notice on April 3, 2025.
The state government reportedly accepted the arbitration process and nominated its arbitrator, after which preliminary proceedings were held in Lagos on May 15, 2025.
On July 24, 2026, the arbitral panel issued its final award directing the Osun State Government to pay Gamji $13,924,343.32 and N157.5 million in reimbursable arbitration fees.
The panel also awarded 20 per cent annual interest on any outstanding balance after the expiration of the compliance period.
According to Gamji, the August 24, 2026 compliance deadline expired without payment by the state government.
This prompted the company to approach the Federal High Court seeking an order to preserve the funds required to satisfy the arbitral award.
Ruling on the application, Osiagor directed the affected banks to immediately restrict withdrawals from the Osun State Government’s accounts.
The judge ordered the preservation of funds up to $13,924,343.32 and N157.5 million pending the determination of the motion on notice.
The court said the restriction was intended to preserve the funds “towards the liquidation of the Arbitral Award dated 24th July, 2026 which has become due and enforceable.”
The suit has been adjourned until October 22, 2026, for hearing of the motion on notice.
The latest court order comes less than two months after the Economic and Financial Crimes Commission disclosed that it had placed a Post No Debit restriction on Osun State Government accounts as part of an investigation into the alleged fraudulent handling of about N11 billion in public funds.
The EFCC, in a statement on August 5, said the investigation, which began in March 2026, centred on the alleged mismanagement of Ecology Funds, Intervention Funds and allocations from the Federation Account Allocation Committee.
The commission said several officials of the state government, including the Accountant General, had been questioned by investigators.
According to the EFCC, the decision to restrict transactions on the accounts followed what it described as suspicious movements of funds from the government accounts into various corporate accounts from August 2.
The EFCC’s action followed allegations by Osun State Governor Ademola Adeleke that the commission was planning to freeze the state’s accounts ahead of the August 15 governorship election.
Adeleke, through the state Commissioner for Information and Public Enlightenment, Kolapo Alimi, had alleged that the proposed freeze was intended to cripple the state government before the election.
However, on August 6, President Bola Tinubu directed the EFCC to return to court and vacate the order freezing the Osun government’s accounts.
Tinubu said he was concerned about the timing of the EFCC action, which came days before the governorship election, and warned that it could undermine public confidence in the credibility of the electoral process.
Mustapha Usman is an investigative journalist with the International Centre for Investigative Reporting. You can easily reach him via: musman@icirnigeria.com. He tweets @UsmanMustapha_M