Court places restriction on Osun bank accounts - Punch Newspapers

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 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. A certified true copy of the ruling was obtained by Sunday PUNCH on Saturday. The company is seeking to preserve $13,924,343.32 and N157.5m awarded to it following an arbitration proceeding arising from water infrastructure projects in the Ilesa West Local Government Area of Osun State. 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, among others. According to an affidavit filed in support of the motion, the dispute stemmed from two contracts awarded to Gamji by the 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, alongside water reservoirs under Slot 2, as part of a water supply and sanitation project in Ilesa West. Gamji stated that the projects were funded through an Islamic Development Bank loan facility facilitated by the Federal Ministry of Finance.See more Punch stories on Google.Add Punch on Google The company noted that the original contract values were $15.98m for Slot 1 and $9.70m for Slot 2. It claimed that engineering design alterations and scope variations caused delays, leading to project cost revisions. Subsequent amendments raised the values of Slot 1 and Slot 2 to $20.24m and $10.95m, respectively. Tourism minister presents hand-drawn portrait to Tinubu in Lagos Baba Alado: Rise, power and controversies of Mushin ‘strongman’ EU pledges more funding for Nigerian artists, cultural events Gamji further claimed that 93 per cent of the contract had been completed by October 2023, with the state government issuing a Substantial Completion Certificate on November 14, 2024. Disagreements subsequently arose over claims regarding extensions of time, price adjustments, and escalated costs of materials and labour. Gamji stated that the state government rejected its claims, prompting failed mediation attempts and the eventual issuance of an arbitration notice on April 3, 2025. The state government accepted the process and nominated its arbitrator, leading to preliminary proceedings in Lagos on May 15, 2025. The arbitral panel issued its final award on July 24, 2026, directing the Osun State Government to pay $13,924,343.32 and N157.5m in reimbursable arbitration fees. The panel also awarded 20 per cent annual interest on any outstanding balance following the expiration of the compliance period. Gamji stated that the compliance deadline lapsed on August 24, 2026, without payment from the state government, prompting its court application. Ruling on the application, Justice Osiagor directed the listed banks to immediately place a restriction on the state government’s accounts. The judge ordered the preservation of funds up to $13,924,343.32 and N157.5m toward the liquidation of the arbitral award, pending the determination of the motion on notice. “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 order read in part. The court adjourned the suit to October 22, 2026, for a hearing on the motion on notice. Dare Akogun

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