The Osun State Government has asked the Federal High Court in Lagos to set aside an order restricting its bank accounts over a $13.9 million arbitration award in favour of Gamji Nigeria Company Limited, describing the order as a product of alleged non-disclosure of material facts.
The government said it had already begun legal proceedings to challenge the arbitration award before the Lagos State High Court before Gamji approached the Federal High Court seeking to enforce the award.
Justice D.E. Osiagor of the Federal High Court in Lagos had ordered commercial banks to place a “Post No Debit” restriction on accounts operated by the Osun State Government.
The order was made following an application by Gamji Nigeria Company Limited in suit FHC/L/CS/1233/2026, seeking to preserve $13,924,343.32 and N157.5 million awarded to the company following an arbitration proceeding over water infrastructure projects in Ilesa West Local Government Area.
The affected financial institutions 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.
The court ordered the preservation of the funds pending the hearing and determination of a motion on notice and adjourned the matter to October 22, 2026.
Dispute over water contracts
The dispute dates back to contracts awarded by the Osun State Government in June 2017 to Gamji for water infrastructure projects in Ilesa West.
The projects involved the construction of transmission mains and booster pump stations as well as water reservoirs, under a water supply and sanitation project funded through an Islamic Development Bank loan facility.
Gamji said the original contracts were valued at $15.98 million and $9.70 million, with subsequent variations increasing the values to $20.24 million and $10.95 million respectively.
The company claimed that about 93 per cent of the work had been completed by October 2023, with the state government issuing a Substantial Completion Certificate in November 2024.
Disagreements later emerged over extensions of time, price adjustments and increased costs of materials and labour, eventually leading to arbitration.
Arbitration awarded $13.9m
An arbitral panel issued its final award on July 24, 2026, directing the Osun State Government to pay Gamji $13,924,343.32 and N157.5 million in reimbursable arbitration fees.
The award also provided for 20 per cent annual interest on any outstanding balance after the compliance period.
Gamji said the August 24 compliance deadline expired without payment, prompting the company to approach the Federal High Court to preserve the funds.
Osun challenges award
The state government, however, disputes both the validity of the award and the process through which it was reached.
In a statement signed by the Commissioner for Information and Public Enlightenment, Kolapo Alimi, the government said its legal team had filed a suit at the Lagos State High Court on September 1, 2026, seeking to set aside the arbitral award.
It also filed an application seeking to suspend enforcement of the award pending determination of the case.
The government accused Gamji of approaching the Federal High Court without disclosing that the award was already being challenged before the Lagos State High Court.
It described the arbitration process as having been characterised by “several irregularities” and alleged that the state was denied fair hearing and full participation.
Government seeks to vacate restriction
The Osun Government has now filed a motion asking the Federal High Court to set aside the account restriction.
The government also disputed references in the Federal High Court proceedings to an alleged July 2024 arbitration award, insisting that the only arbitral award against the state was issued in July 2026 and is currently being challenged.
The state said Gamji and its lawyers were already aware of the challenge before seeking the Federal High Court order.
The dispute places the state’s finances and ability to access funds under judicial scrutiny while two legal proceedings concerning the arbitration award are ongoing.
For residents, the immediate issue is whether the account restriction will affect the government’s ability to meet its financial obligations and fund public services. The state government, however, said it had taken the necessary legal steps to challenge the order.
The government said that because the matter remains sub judice, it would refrain from making comments that could prejudice the case.
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