Court freezes accounts of Osun – Blueprint Newspapers Limited

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

Justice DE Osiagor issued the interim order following an application made by Gamji through his lawyer, Yunus AbdulSalam, SAN, in case number FHC/L/CS/1233/2026.

The company is seeking to preserve $13,924,343.32 and $157.5 million that it says was awarded to it following an arbitration arising out of water infrastructure projects in Ilesa West Local Government Area of ​​Osun State.

Financial institutions named in the request 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.

Controversy over water projects

According to an affidavit filed in support of the application, the dispute stems from two contracts awarded to Gamji by the Osun State Government in June 2017 for water infrastructure works.

The projects included the construction of transmission pipelines and booster pumping stations under Slot 1 and water tanks under Slot 2, as part of a larger water supply and sanitation project in Ilesa West.

Gamji said the projects will be financed through an Islamic Development Bank loan, arranged by the Federal Ministry of Finance.

The company said the original contract value for Slot 1 was approximately $15.98 million, while Slot 2 was valued at approximately $9.70 million.

It said changes to technical designs, changes in the scope of work and variations to orders have resulted in delays and increases in contract value.

According to the affidavit, subsequent changes increased the value of Slot 1 to approximately $20.24 million and Slot 2 to approximately $10.95 million.

Arbitration follows disagreements

Gamji further said that about 93% of the work had been completed by October 2023 and that the state government issued a substantial completion certificate on November 14, 2024.

The company said disagreements later arose over claims related to time extensions, price adjustments and increases in the cost of materials, labor and other inputs.

Gamji said he had made several requests which were rejected by the state government, prompting both sides to try to resolve the dispute through mediation.

It said it subsequently issued a notice of arbitration on April 3, 2025, while the Osun State Government accepted the arbitration process and appointed its own arbitrator.

The arbitration panel initiated the proceedings, with a preliminary meeting held in Lagos on 15 May 2025.

Jury awards $13.9 million, $157.5 million

According to Gamji, the panel rendered its final award on July 24, 2026, ordering the Osun state government to pay $13,924,343.32 and N157.5 million described as refundable arbitration fees.

The company also said the award carried interest of 20% per annum on any outstanding portion of the debt after the stipulated performance period.

Gamji claimed that the deadline for compliance expired on August 24, 2026, but that the awarded sums were not paid when he submitted the application to the court.

Following the application, Justice Osiagor granted an interim attachment order directing financial institutions to restrict withdrawals from state government accounts.

The court orders the funds to be preserved

The judge ordered the listed banks to impose a “Post No Debit” restriction on Osun State Government accounts maintained with them and to preserve funds up to the value of $13,924,343.32 and N157.5 million.

The order is aimed at preserving the funds intended for the settlement of the arbitration award pending the hearing and determination of the request for formal notice.

The order reads in part: “That an order of preservation of an interim injunction be granted directing the said financial institutions in Nigeria to forthwith impose a Post No Debit restriction on the account of the respondent domiciled with them for the preservation of funds with them in the amount 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”.

The court adjourned the matter to October 22, 2026, for the hearing of the notice motion.