The Federal High Court in Lagos has granted an interim order restricting withdrawals from accounts operated by the Osun State Government. The order, granted by Justice D.E. Osiagor, is aimed at preserving funds belonging to the state government over an unpaid arbitration award of $13.9 million and N157.5 million. The case centres on a dispute between Gamji Nigeria Company Limited and the Osun State Government over water infrastructure projects carried out in Ilesa West Local Government Area.
The dispute dates back to June 2017 when the state government awarded two contracts to Gamji for water infrastructure works in Ilesa West. The contracts involved the construction of transmission mains, booster pump stations, and water reservoirs. The projects were funded through an Islamic Development Bank loan facility facilitated by the Federal Ministry of Finance. However, changes to the engineering designs and variations in the scope of work later affected the projects, resulting in delays and additional costs.
Gamji claimed that substantial progress had been made on the projects, with about 93 per cent of the work completed by October 2023. The company also stated that the Osun State Government issued a Substantial Completion Certificate on November 14, 2024. Despite the completion of most of the works, issues emerged between the company and the state government over extensions of time, price adjustments, and increased costs of materials and labour.
The dispute was taken to arbitration, and the arbitral panel directed the Osun State Government to pay Gamji $13,924,343.32 and N157.5 million in reimbursable arbitration fees. The panel also imposed an annual interest rate of 20 per cent on any outstanding amount after the expiration of the period allowed for compliance. The deadline for the state government to comply with the award expired on August 24, 2026, but the payment was not made.
Gamji returned to court to seek an order protecting funds in the state’s bank accounts pending further proceedings to enforce the arbitral award. Justice Osiagor granted the interim preservation order, directing the affected financial institutions to immediately place a “Post No Debit” restriction on the accounts operated by the Osun State Government. The order specifically limited the preservation to the sums of $13,924,343.32 and N157.5 million.
The court order affects several banks holding accounts belonging to the state government, including 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. The restriction means that the banks are to prevent withdrawals or other debit transactions from the accounts to the extent required to preserve the amount covered by the arbitration award.
The Federal High Court has fixed October 22, 2026, for the hearing of the motion on notice. Until then, the interim restriction remains in place in respect of the accounts and amounts covered by the court order. This development is separate from an earlier dispute between the Osun State Government and the Economic and Financial Crimes Commission over restrictions placed on some of its bank accounts.
Key points
- The Federal High Court in Lagos has ordered commercial banks to restrict withdrawals from accounts operated by the Osun State Government over an unpaid arbitration award of $13.9 million and N157.5 million.
- The dispute centres on a long-running disagreement between Gamji Nigeria Company Limited and the Osun State Government over water infrastructure projects carried out in Ilesa West Local Government Area.
- The court has fixed October 22, 2026, for the hearing of the motion on notice.
