Court Orders Banks To Place ‘Post No Debit’ On Osun Accounts Over $13.9m, N157.5m Arbitration Award

The Federal High Court in Lagos has directed commercial banks to impose a “Post No Debit” restriction on accounts operated by the Osun State Government, following a $13.9 million arbitration award in favour of Gamji Nigeria Company Limited.

Justice D.E. Osiagor issued the interim order after Gamji, through its counsel Yunus AbdulSalam, SAN, filed an application in suit number FHC/L/CS/1233/2026.

The company seeks to preserve $13,924,343.32 and ₦157.5 million awarded to it in arbitration proceedings arising from water infrastructure projects in Ilesa West Local Government Area.

The financial institutions affected 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.

Background of the Dispute

According to Gamji’s affidavit, the dispute stems from two contracts awarded in June 2017 for water infrastructure works under a broader supply and sanitation project financed by a loan from the Islamic Development Bank, arranged by the Federal Ministry of Finance.

The first contract, known as Slot 1, covered the construction of transmission mains and booster pump stations. It was initially valued at $15.98 million but later revised to $20.24 million.

The second contract, referred to as Slot 2, involved the building of water reservoirs. Its original value was $9.70 million, which was subsequently increased to $10.95 million.

Gamji stated that design changes, scope variations, and delays increased the contract values. By October 2023, about 93% of the work had been completed, and the state government issued a Substantial Completion Certificate on November 14, 2024.

Disagreements later arose over claims relating to extensions of time, price adjustments, and rising costs of materials and labour. After failed mediation attempts, Gamji issued an arbitration notice on April 3, 2025.

The arbitration panel, constituted with the state government’s participation, delivered its final award on July 24, 2026, ordering Osun State to pay $13.9m and ₦157.5m, plus interest at 20% per annum on any unpaid sums.

The compliance deadline expired on August 24, 2026, but the state government allegedly failed to pay, prompting Gamji’s court application.

Court’s Interim Order

Justice Osiagor directed the cited banks to immediately restrict debits on Osun State Government accounts to preserve funds equivalent to the arbitral award.

The order reads in part: “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 matter has been adjourned to October 22, 2026 for hearing of the motion on notice.(SaharaReporters)