Again, Court Restricts Osun Accounts Over $13.9m Arbitration Award

The Federal High Court in Lagos has again restricted bank accounts operated by the Osun State Government over a $13.9 million arbitration award.

Justice D.E. Osiagor issued the interim order after Gamji Nigeria Company Limited sought to preserve funds in the state’s accounts.

The company is pursuing the money over water infrastructure projects in Ilesa West Local Government Area.

The suit, marked FHC/L/CS/1233/2026, directs commercial banks to place a “Post No Debit” restriction on the affected accounts.

The order covers $13,924,343.32 and N157.5 million pending the hearing of Gamji’s motion on notice.

Banks named in the order include Guaranty Trust Bank, Access Bank, First Bank, Zenith Bank, United Bank for Africa, Ecobank and Fidelity Bank.

Others are Stanbic IBTC, Sterling Bank, Union Bank and Wema Bank, among others.

The fresh restriction comes weeks after the Economic and Financial Crimes Commission (EFCC) lifted an earlier restriction on some Osun accounts.

The EFCC had restricted some state accounts during the build-up to the August 15 governorship election. It cited an investigation into about N11 billion in public funds.

President Bola Tinubu later directed the anti-graft agency to lift the restriction. The accounts were subsequently unfrozen.

The latest case, however, arose from a contractual dispute involving Gamji and the Osun Government.

Gamji said the state awarded it two water infrastructure contracts in June 2017. The projects covered transmission mains, booster pump stations and water reservoirs in Ilesa West.

The company said the projects received funding through an Islamic Development Bank loan facilitated by the Federal Ministry of Finance.

According to court documents, the original contracts were worth $15.98 million and $9.70 million.

Gamji said design changes and variations later increased the values to $20.24 million and $10.95 million.

The company also claimed that it completed about 93 per cent of the work by October 2023.

It said the state government subsequently issued a Substantial Completion Certificate on November 14, 2024.

Disagreements later emerged over extensions of time, price adjustments and rising material and labour costs.

Gamji said mediation efforts failed after the state rejected its claims. It then issued an arbitration notice on April 3, 2025.

The state accepted the arbitration process and nominated its arbitrator. Preliminary proceedings followed in Lagos on May 15, 2025.

The arbitral panel delivered its final award on July 24, 2026.

It directed the Osun Government to pay Gamji $13,924,343.32 and N157.5 million in reimbursable arbitration fees.

The award also imposed 20 per cent annual interest on any unpaid balance after the compliance deadline.

Gamji told the court that the August 24 deadline expired without payment. The company then sought an order to preserve state funds.

Justice Osiagor granted the interim application and directed the banks to restrict withdrawals from the affected accounts.

“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,” the order read.

The court said the restriction would preserve funds towards the liquidation of the arbitration award pending the substantive hearing.

However, the restriction does not represent a final determination of the dispute. The court adjourned the matter until October 22, 2026.

Meanwhile, the Osun Government has challenged the order and the underlying arbitration award.

The state said it had filed a case at the Lagos State High Court on September 1, seeking to set aside the award.

It also filed an application to suspend enforcement pending determination of that case, according to the state Commissioner for Information and Public Enlightenment, Kolapo Alimi.

Alimi said the state had already challenged the award before Gamji approached the Federal High Court.

“The Counsel to the State Government had filed the suit to set aside the Arbitral Award at the Lagos State High Court since the 1st day of September, 2026,” he said.

The commissioner also alleged that Gamji failed to disclose the pending challenge when it sought the Federal High Court order.

“The state government submitted that just as the court order was a product of deceit and substantial non-disclosure of material facts to the Court, the arbitration award it sought to enforce was also fraught with several irregularities,” Alimi said.

The latest legal battle therefore places the state’s finances at the centre of another court process, even as the substantive dispute over the arbitration award remains unresolved.