diff --git a/.gitignore b/.gitignore
index 30346ae64..9ecaf916d 100644
--- a/.gitignore
+++ b/.gitignore
@@ -10,3 +10,4 @@ chain-code/
 two-chains/ibc-*
 two-chains/.relayer
 two-chains/*.log
+test/setup/valkeys/*.json
diff --git a/relayer/misbehaviour.go b/relayer/misbehaviour.go
index 2f8cd6a11..db5c47e00 100644
--- a/relayer/misbehaviour.go
+++ b/relayer/misbehaviour.go
@@ -20,7 +20,7 @@ var (
 // against the associated light client. If the headers do not match, the emitted
 // header and a reconstructed header are used in misbehaviour submission to
 // the IBC client on the source chain.
-func checkAndSubmitMisbehaviour(src *Chain, events map[string][]string) error {
+func checkAndSubmitMisbehaviour(src, counterparty *Chain, events map[string][]string) error {
 	hdrs, ok := events[fmt.Sprintf("%s.%s", updateCliTag, headerTag)]
 	if !ok {
 		return nil
@@ -52,7 +52,7 @@ func checkAndSubmitMisbehaviour(src *Chain, events map[string][]string) error {
 			return fmt.Errorf("emitted header is not tendermint type")
 		}
 
-		trustedHeader, err := src.GetLightSignedHeaderAtHeight(emittedHeader.Header.Height)
+		trustedHeader, err := counterparty.GetLightSignedHeaderAtHeight(emittedHeader.Header.Height)
 		if err != nil {
 			return err
 		}
diff --git a/relayer/naive-strategy.go b/relayer/naive-strategy.go
index ddc1ca9dd..696c3e6c9 100644
--- a/relayer/naive-strategy.go
+++ b/relayer/naive-strategy.go
@@ -232,7 +232,9 @@ func (nrs *NaiveStrategy) UnrelayedAcknowledgements(src, dst *Chain) (*RelaySequ
 // HandleEvents defines how the relayer will handle block and transaction events as they are emitted
 func (nrs *NaiveStrategy) HandleEvents(src, dst *Chain, events map[string][]string) {
 	// check for misbehaviour and submit if found
-	err := checkAndSubmitMisbehaviour(src, events)
+	// events came from dst chain, use that chain as the source
+	// the chain messages are submitted to
+	err := checkAndSubmitMisbehaviour(dst, src, events)
 	if err != nil {
 		src.Error(err)
 	}
diff --git a/test/relayer_akash_test.go b/test/relayer_akash_test.go
index 2ddd22359..25eb15f49 100644
--- a/test/relayer_akash_test.go
+++ b/test/relayer_akash_test.go
@@ -10,8 +10,8 @@ import (
 
 var (
 	akashChains = []testChain{
-		{"ibc-0", gaiaTestConfig},
-		{"ibc-1", akashTestConfig},
+		{"ibc-0", 0, gaiaTestConfig},
+		{"ibc-1", 1, akashTestConfig},
 	}
 )
 
diff --git a/test/relayer_gaia_test.go b/test/relayer_gaia_test.go
index 10d565ba7..c63eca44b 100644
--- a/test/relayer_gaia_test.go
+++ b/test/relayer_gaia_test.go
@@ -2,16 +2,26 @@ package test
 
 import (
 	"testing"
+	"time"
 
 	sdk "github.com/cosmos/cosmos-sdk/types"
+	clienttypes "github.com/cosmos/cosmos-sdk/x/ibc/core/02-client/types"
+	ibctmtypes "github.com/cosmos/cosmos-sdk/x/ibc/light-clients/07-tendermint/types"
+	ibctesting "github.com/cosmos/cosmos-sdk/x/ibc/testing"
+	ibctestingmock "github.com/cosmos/cosmos-sdk/x/ibc/testing/mock"
 	"github.com/cosmos/relayer/relayer"
 	"github.com/stretchr/testify/require"
+	"github.com/tendermint/tendermint/crypto/tmhash"
+	tmproto "github.com/tendermint/tendermint/proto/tendermint/types"
+	tmprotoversion "github.com/tendermint/tendermint/proto/tendermint/version"
+	tmtypes "github.com/tendermint/tendermint/types"
+	tmversion "github.com/tendermint/tendermint/version"
 )
 
 var (
 	gaiaChains = []testChain{
-		{"ibc-0", gaiaTestConfig},
-		{"ibc-1", gaiaTestConfig},
+		{"ibc-0", 0, gaiaTestConfig},
+		{"ibc-1", 1, gaiaTestConfig},
 	}
 )
 
@@ -148,3 +158,164 @@ func TestGaiaReuseIdentifiers(t *testing.T) {
 	require.Equal(t, expectedSrc, src)
 	require.Equal(t, expectedDst, dst)
 }
+
+func TestGaiaMisbehaviourMonitoring(t *testing.T) {
+	chains := spinUpTestChains(t, gaiaChains...)
+
+	var (
+		src = chains.MustGet("ibc-0")
+		dst = chains.MustGet("ibc-1")
+	)
+
+	path, err := genTestPathAndSet(src, dst, "transfer", "transfer")
+	require.NoError(t, err)
+
+	// create path
+	_, err = src.CreateClients(dst)
+	require.NoError(t, err)
+	testClientPair(t, src, dst)
+
+	_, err = src.CreateOpenConnections(dst, 3, src.GetTimeout())
+	require.NoError(t, err)
+	testConnectionPair(t, src, dst)
+
+	_, err = src.CreateOpenChannels(dst, 3, src.GetTimeout())
+	require.NoError(t, err)
+	testChannelPair(t, src, dst)
+
+	// start the relayer process in it's own goroutine
+	rlyDone, err := relayer.RunStrategy(src, dst, path.MustGetStrategy())
+	require.NoError(t, err)
+
+	// Wait for relay message inclusion in both chains
+	require.NoError(t, src.WaitForNBlocks(1))
+	require.NoError(t, dst.WaitForNBlocks(1))
+
+	latestHeight, err := dst.QueryLatestHeight()
+	require.NoError(t, err)
+
+	header, err := dst.QueryHeaderAtHeight(latestHeight)
+	require.NoError(t, err)
+
+	clientStateRes, err := src.QueryClientState(latestHeight)
+	require.NoError(t, err)
+
+	// unpack any into ibc tendermint client state
+	clientStateExported, err := clienttypes.UnpackClientState(clientStateRes.ClientState)
+	require.NoError(t, err)
+
+	// cast from interface to concrete type
+	clientState, ok := clientStateExported.(*ibctmtypes.ClientState)
+	require.True(t, ok, "error when casting exported clientstate")
+
+	height := clientState.GetLatestHeight().(clienttypes.Height)
+	heightPlus1 := clienttypes.NewHeight(height.RevisionNumber, height.RevisionHeight+1)
+
+	// setup validator for signing duplicate header
+	// use key for dst
+	privKey := getSDKPrivKey(1)
+	privVal := ibctestingmock.PV{
+		PrivKey: privKey,
+	}
+	pubKey, err := privVal.GetPubKey()
+	require.NoError(t, err)
+	validator := tmtypes.NewValidator(pubKey, header.ValidatorSet.Proposer.VotingPower)
+	valSet := tmtypes.NewValidatorSet([]*tmtypes.Validator{validator})
+	signers := []tmtypes.PrivValidator{privVal}
+
+	// creating duplicate header
+	newHeader := createTMClientHeader(t, dst.ChainID, int64(heightPlus1.RevisionHeight), height,
+		header.GetTime().Add(time.Minute), valSet, valSet, signers, header)
+
+	// update client with duplicate header
+	updateMsg, err := clienttypes.NewMsgUpdateClient(src.PathEnd.ClientID, newHeader, src.MustGetAddress())
+	require.NoError(t, err)
+
+	res, success, err := src.SendMsg(updateMsg)
+	require.NoError(t, err)
+	require.True(t, success)
+	require.Equal(t, uint32(0), res.Code)
+
+	// wait for packet processing
+	require.NoError(t, dst.WaitForNBlocks(6))
+
+	// kill relayer routine
+	rlyDone()
+
+	clientStateRes, err = src.QueryClientState(0)
+	require.NoError(t, err)
+
+	// unpack any into ibc tendermint client state
+	clientStateExported, err = clienttypes.UnpackClientState(clientStateRes.ClientState)
+	require.NoError(t, err)
+
+	// cast from interface to concrete type
+	clientState, ok = clientStateExported.(*ibctmtypes.ClientState)
+	require.True(t, ok, "error when casting exported clientstate")
+
+	// clientstate should be frozen
+	require.True(t, clientState.IsFrozen())
+}
+
+func createTMClientHeader(t *testing.T, chainID string, blockHeight int64, trustedHeight clienttypes.Height,
+	timestamp time.Time, tmValSet, tmTrustedVals *tmtypes.ValidatorSet, signers []tmtypes.PrivValidator,
+	oldHeader *ibctmtypes.Header) *ibctmtypes.Header {
+	var (
+		valSet      *tmproto.ValidatorSet
+		trustedVals *tmproto.ValidatorSet
+	)
+	require.NotNil(t, tmValSet)
+
+	vsetHash := tmValSet.Hash()
+
+	tmHeader := tmtypes.Header{
+		Version:            tmprotoversion.Consensus{Block: tmversion.BlockProtocol, App: 2},
+		ChainID:            chainID,
+		Height:             blockHeight,
+		Time:               timestamp,
+		LastBlockID:        ibctesting.MakeBlockID(make([]byte, tmhash.Size), 10_000, make([]byte, tmhash.Size)),
+		LastCommitHash:     oldHeader.Header.LastCommitHash,
+		DataHash:           tmhash.Sum([]byte("data_hash")),
+		ValidatorsHash:     vsetHash,
+		NextValidatorsHash: vsetHash,
+		ConsensusHash:      tmhash.Sum([]byte("consensus_hash")),
+		AppHash:            tmhash.Sum([]byte("app_hash")),
+		LastResultsHash:    tmhash.Sum([]byte("last_results_hash")),
+		EvidenceHash:       tmhash.Sum([]byte("evidence_hash")),
+		ProposerAddress:    tmValSet.Proposer.Address, //nolint:staticcheck
+	}
+	hhash := tmHeader.Hash()
+	blockID := ibctesting.MakeBlockID(hhash, 3, tmhash.Sum([]byte("part_set")))
+	voteSet := tmtypes.NewVoteSet(chainID, blockHeight, 1, tmproto.PrecommitType, tmValSet)
+
+	commit, err := tmtypes.MakeCommit(blockID, blockHeight, 1, voteSet, signers, timestamp)
+	require.NoError(t, err)
+
+	signedHeader := &tmproto.SignedHeader{
+		Header: tmHeader.ToProto(),
+		Commit: commit.ToProto(),
+	}
+
+	if tmValSet != nil {
+		valSet, err = tmValSet.ToProto()
+		if err != nil {
+			panic(err)
+		}
+	}
+
+	if tmTrustedVals != nil {
+		trustedVals, err = tmTrustedVals.ToProto()
+		if err != nil {
+			panic(err)
+		}
+	}
+
+	// The trusted fields may be nil. They may be filled before relaying messages to a client.
+	// The relayer is responsible for querying client and injecting appropriate trusted fields.
+	return &ibctmtypes.Header{
+		SignedHeader:      signedHeader,
+		ValidatorSet:      valSet,
+		TrustedHeight:     trustedHeight,
+		TrustedValidators: trustedVals,
+	}
+}
diff --git a/test/setup/Dockerfile.akashtest b/test/setup/Dockerfile.akashtest
index 9ee7666fd..a7de73861 100644
--- a/test/setup/Dockerfile.akashtest
+++ b/test/setup/Dockerfile.akashtest
@@ -8,7 +8,9 @@ USER root
 
 COPY ./akash-setup.sh .
 
+COPY ./valkeys ./setup/valkeys
+
 EXPOSE 26657
 
 ENTRYPOINT [ "./akash-setup.sh" ]
-# NOTE: to run this image, docker run -d -p 26657:26657 ./single-node.sh {{chain_id}} {{genesis_account}}
+# NOTE: to run this image, docker run -d -p 26657:26657 ./akash-setup.sh {{chain_id}} {{genesis_account}} {{seeds}} {{priv_validator_key_path}}
diff --git a/test/setup/Dockerfile.gaiatest b/test/setup/Dockerfile.gaiatest
index 34bef1cb1..05df8d437 100644
--- a/test/setup/Dockerfile.gaiatest
+++ b/test/setup/Dockerfile.gaiatest
@@ -14,7 +14,15 @@ WORKDIR /gaia
 
 COPY ./gaia-setup.sh .
 
+COPY ./valkeys ./setup/valkeys
+
+USER root
+
+RUN chmod -R 777 ./setup
+
+USER gaia
+
 EXPOSE 26657
 
 ENTRYPOINT [ "./gaia-setup.sh" ]
-# NOTE: to run this image, docker run -d -p 26657:26657 ./single-node.sh {{chain_id}} {{genesis_account}}
+# NOTE: to run this image, docker run -d -p 26657:26657 ./gaia-setup.sh {{chain_id}} {{genesis_account}} {{seeds}} {{priv_validator_key_path}}
diff --git a/test/setup/akash-setup.sh b/test/setup/akash-setup.sh
index 741575922..a7b9001a3 100755
--- a/test/setup/akash-setup.sh
+++ b/test/setup/akash-setup.sh
@@ -4,6 +4,7 @@ set -o errexit -o nounset
 
 CHAINID=$1
 GENACCT=$2
+PRIVPATH=$3
 
 if [ -z "$1" ]; then
   echo "Need to input chain id..."
@@ -15,12 +16,18 @@ if [ -z "$2" ]; then
   exit 1
 fi
 
+if [ -z "$3" ]; then
+  echo "Need to input path of priv_validator_key json file"
+  exit 1
+fi
+
 # Build genesis file incl account for passed address
 coins="10000000000stake,100000000000samoleans"
 akash init --chain-id $CHAINID $CHAINID
 akash keys add validator --keyring-backend="test"
 akash add-genesis-account $(akash keys show validator -a --keyring-backend="test") $coins
 akash add-genesis-account $GENACCT $coins
+cp $PRIVPATH ~/.akash/config/priv_validator_key.json
 akash gentx validator 5000000000stake --keyring-backend="test" --chain-id $CHAINID
 akash collect-gentxs
 
diff --git a/test/setup/gaia-setup.sh b/test/setup/gaia-setup.sh
index ea9e4c689..76117e815 100755
--- a/test/setup/gaia-setup.sh
+++ b/test/setup/gaia-setup.sh
@@ -4,6 +4,7 @@ set -o errexit -o nounset
 
 CHAINID=$1
 GENACCT=$2
+PRIVPATH=$3
 
 if [ -z "$1" ]; then
   echo "Need to input chain id..."
@@ -15,12 +16,18 @@ if [ -z "$2" ]; then
   exit 1
 fi
 
+if [ -z "$3" ]; then
+  echo "Need to input path of priv_validator_key json file"
+  exit 1
+fi
+
 # Build genesis file incl account for passed address
 coins="10000000000stake,100000000000samoleans"
 gaiad init --chain-id $CHAINID $CHAINID
 gaiad keys add validator --keyring-backend="test"
 gaiad add-genesis-account $(gaiad keys show validator -a --keyring-backend="test") $coins
 gaiad add-genesis-account $GENACCT $coins
+cp $PRIVPATH ~/.gaia/config/priv_validator_key.json
 gaiad gentx validator 5000000000stake --keyring-backend="test" --chain-id $CHAINID
 gaiad collect-gentxs
 
diff --git a/test/setup/valkeys/.gitkeep b/test/setup/valkeys/.gitkeep
new file mode 100644
index 000000000..e69de29bb
diff --git a/test/test_chains.go b/test/test_chains.go
index ec12d2609..4b2f29efb 100644
--- a/test/test_chains.go
+++ b/test/test_chains.go
@@ -11,6 +11,15 @@ import (
 	ry "github.com/cosmos/relayer/relayer"
 )
 
+const (
+	// SEED1 is a mnenomic
+	//nolint:lll
+	SEED1 = "cake blossom buzz suspect image view round utility meat muffin humble club model latin similar glow draw useless kiwi snow laugh gossip roof public"
+	// SEED2 is a mnemonic
+	//nolint:lll
+	SEED2 = "near little movie lady moon fuel abandon gasp click element muscle elbow taste indoor soft soccer like occur legend coin near random normal adapt"
+)
+
 var (
 	// GAIA BLOCK TIMEOUTS are located in the gaia setup script in the
 	// setup directory.
@@ -37,6 +46,8 @@ var (
 		accountPrefix:  "akash",
 		trustingPeriod: "330h",
 	}
+
+	seeds = []string{SEED1, SEED2}
 )
 
 type (
@@ -44,6 +55,7 @@ type (
 	// cosmos-sdk based blockchain
 	testChain struct {
 		chainID string
+		seed    int
 		t       testChainConfig
 	}
 
diff --git a/test/test_setup.go b/test/test_setup.go
index 2ad86f60f..63362aa3e 100644
--- a/test/test_setup.go
+++ b/test/test_setup.go
@@ -14,6 +14,11 @@ import (
 	"github.com/stretchr/testify/require"
 
 	ry "github.com/cosmos/relayer/relayer"
+
+	sdked25519 "github.com/cosmos/cosmos-sdk/crypto/keys/ed25519"
+	sdkcryptotypes "github.com/cosmos/cosmos-sdk/crypto/types"
+	tmed25519 "github.com/tendermint/tendermint/crypto/ed25519"
+	"github.com/tendermint/tendermint/privval"
 )
 
 // spinUpTestChains is to be passed any number of test chains with given configuration options
@@ -46,6 +51,7 @@ func spinUpTestChains(t *testing.T, testChains ...testChain) ry.Chains {
 		c := newTestChain(t, tc)
 		chains[i] = c
 		wg.Add(1)
+		genPrivValKeyJSON(tc.seed)
 		go spinUpTestContainer(t, rchan, pool, c, dir, &wg, tc)
 	}
 
@@ -135,7 +141,11 @@ func spinUpTestContainer(t *testing.T, rchan chan<- *dockertest.Resource,
 		Repository:   containerName, // Name must match Repository
 		Tag:          "latest",      // Must match docker default build tag
 		ExposedPorts: []string{tc.t.rpcPort, c.GetRPCPort()},
-		Cmd:          []string{c.ChainID, c.MustGetAddress().String()},
+		Cmd: []string{
+			c.ChainID,
+			c.MustGetAddress().String(),
+			getPrivValFileName(tc.seed),
+		},
 		PortBindings: map[dc.Port][]dc.PortBinding{
 			dc.Port(tc.t.rpcPort): {{HostPort: c.GetRPCPort()}},
 		},
@@ -207,3 +217,25 @@ func genTestPathAndSet(src, dst *ry.Chain, srcPort, dstPort string) (*ry.Path, e
 	dst.PathEnd = path.Dst
 	return path, nil
 }
+
+func genPrivValKeyJSON(seedNumber int) {
+	privKey := getPrivKey(seedNumber)
+	filePV := getFilePV(privKey, seedNumber)
+	filePV.Key.Save()
+}
+
+func getPrivKey(seedNumber int) tmed25519.PrivKey {
+	return tmed25519.GenPrivKeyFromSecret([]byte(seeds[seedNumber]))
+}
+
+func getSDKPrivKey(seedNumber int) sdkcryptotypes.PrivKey {
+	return sdked25519.GenPrivKeyFromSecret([]byte(seeds[seedNumber]))
+}
+
+func getFilePV(privKey tmed25519.PrivKey, seedNumber int) *privval.FilePV {
+	return privval.NewFilePV(privKey, getPrivValFileName(seedNumber), "/")
+}
+
+func getPrivValFileName(seedNumber int) string {
+	return fmt.Sprintf("./setup/valkeys/priv_val%d.json", seedNumber)
+}