Court Freezes Osun Govt Accounts Over $13.9m Arbitration Award

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 on Saturday.

Gamji is seeking to preserve $13,924,343.32 and N157.5m awarded to it after arbitration proceedings arising from water infrastructure projects in Ilesa West Local Government Area of the 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, and water reservoirs under Slot 2, as part of a water supply and sanitation project in Ilesa West.

Gamji said the projects were funded through an Islamic Development Bank loan facility facilitated by the Federal Ministry of Finance.

The company said the original contract values were $15.98m for Slot 1 and $9.70m for Slot 2, but engineering design alterations and scope variations caused delays and led to cost revisions. The values were subsequently raised to $20.24m and $10.95m, respectively.

It claimed 93 per cent of the contracts had been completed by October 2023, with the state government issuing a Substantial Completion Certificate on November 14, 2024.

Disagreements later arose over claims for extension of time, price adjustments, and escalated costs of materials and labour. Gamji said the state government rejected its claims, prompting failed mediation and an arbitration notice on April 3, 2025.

The state government accepted the process and nominated its arbitrator, with preliminary proceedings held 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, plus 20 per cent annual interest on any outstanding balance after the compliance period.

Gamji said the compliance deadline lapsed on August 24, 2026, without payment, prompting its application to court.

Ruling on the application, Justice Osiagor directed the listed banks to immediately restrict the state government’s 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 domiciled with them for the preservation of the funds… 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 case to October 22, 2026, for hearing of the motion on notice.