Court orders restrictions on Osun government accounts over $13.9m award

A Federal High Court in Lagos has ordered several commercial banks to restrict withdrawals from Osun State Government accounts over an arbitration award of $13.9m and N157.5m. Justice Daniel Osiagor issued the interim “Post No Debit” order after Gamji Nigeria Company Limited applied to preserve funds that could be used to satisfy the award. The restriction covers up to $13,924,343.32 and N157.5m pending the hearing of the company’s substantive application.

The affected institutions include Guaranty Trust, Access Bank, First HoldCo, Zenith Bank, United Bank for Africa, Ecobank, Fidelity Bank, Stanbic IBTC, Sterling Bank, Union Bank and Wema Bank, among others. The dispute arose from two water infrastructure contracts awarded by the Osun Government in June 2017, during the administration of former governor Adegboyega Oyetola. The projects, in Ilesa West Local Government Area, involved transmission mains, booster pump stations and water reservoirs.

Gamji said the contracts were funded through an Islamic Development Bank loan facility facilitated by the Federal Ministry of Finance. It said design changes and variations increased the contract values, and that about 93 per cent of the work had been completed by October 2023. The company also said the state issued a substantial completion certificate in November 2024.

Disagreements later arose over extensions, price adjustments and higher material and labour costs. After mediation failed, Gamji issued an arbitration notice in April 2025. The panel’s final award, dated July 24, 2026, included the dollar amount and reimbursable arbitration fees.

The award also provided for 20 per cent annual interest on unpaid sums after the compliance deadline. The court adjourned the case until October 22, 2026. The interim order does not finally determine the dispute, and the Osun Government had not publicly responded to it, according to the report.