The Osun State Government has moved against a Federal High Court order restricting access to its bank accounts over a $13.9 million and N157.5 million arbitration award in favour of Gamji Nigeria Company Limited.
The state government is asking the Federal High Court in Lagos to set aside the ex-parte order, arguing that it was obtained without full disclosure of important facts surrounding the dispute.
Politics Nigeria gathered that the application was filed on October 2, 2026, two days before details of the account restriction became public.
Gamji, a contractor involved in water infrastructure projects in Osun State, had approached the court seeking to preserve funds belonging to the state government pending enforcement of the arbitral award.
Justice D.E. Osiagor subsequently directed several commercial banks to place a “Post No Debit” restriction on accounts operated by the Osun State Government.
The restriction covers funds up to $13,924,343.32 and N157.5 million.
The banks affected 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 order followed Gamji’s claim that the arbitral award had become due and enforceable after the state government failed to comply with the payment deadline.
However, the Osun State Government has disputed the circumstances under which the order was obtained.
In a statement issued by the Commissioner for Information and Public Enlightenment, Kolapo Alimi, the government alleged that Gamji failed to disclose material facts to the court before obtaining the order.
The state also challenged the description of the arbitration award relied upon in the application.
Alimi said the ex-parte order issued on September 9, 2026, referred to an alleged arbitral award said to have been made against the state in July 2024.
He insisted that no such award was made against Osun in July 2024.
“In fact, it was reported that the purported award which the ex-parte order of September 9, 2026 referenced does not exist, as there was no arbitral award made against the state government in July 2024.
“The only arbitral award against the state government was in July 2026, and the said award is presently being challenged before the Lagos State High Court by the state government’s legal team,” he said.
The dispute between the state government and Gamji dates back to contracts awarded in 2017 during the administration of former Governor Gboyega Oyetola.
The contracts were connected to water infrastructure works in Ilesa West Local Government Area.
The projects included the construction of transmission mains, booster pump stations and water reservoirs as part of a wider water supply and sanitation programme.
The contractual disagreement later centred on variations to the original agreements and whether additional sums were payable to the contractor.
The government said the disagreement eventually resulted in arbitration.
According to Alimi, the state government had raised concerns about the manner in which the arbitration was conducted.
“The matter proceeded for arbitration which was deliberately mismanaged and handled to favour Gamji Nigeria Company Limited, while denying the state government fair hearing and full participation in the arbitration process as mandated by best practice in the arbitration process,” the statement alleged.
Gamji, however, maintained a different position in its court filings.
The company claimed that changes to the project designs, variations in the scope of work and other factors increased the cost of executing the contracts.
It also claimed that a substantial portion of the work had been completed before the disagreement over payments and other contractual claims intensified.
The dispute included claims relating to extensions of time, increases in the cost of materials and labour, as well as adjustments to the contract values.
The matter eventually proceeded to arbitration after attempts to resolve the disagreement outside the process failed.
Gamji issued its arbitration notice in April 2025.
The state government participated in the arbitration and nominated its arbitrator.
Proceedings subsequently continued, leading to the final award delivered on July 24, 2026.
The panel ordered Osun State to pay Gamji $13,924,343.32 and N157.5 million in reimbursable arbitration fees.
The award also provided for interest of 20 per cent annually on any unpaid balance after the stipulated compliance period.
Gamji later claimed that the deadline for compliance expired on August 24 without payment.
It then approached the Federal High Court in Lagos seeking an order to preserve funds in the state’s bank accounts.
The court granted the interim application and directed the affected banks to prevent debit transactions against the accounts to the extent covered by the order.
The state government is now challenging both the basis of the enforcement action and the underlying arbitral award.
Alimi disclosed that Osun’s legal team had already commenced proceedings at the Lagos State High Court before Gamji sought the Federal High Court order.
According to him, the state filed an application on September 1, 2026, seeking to set aside the arbitral award.
The government therefore argued that Gamji’s subsequent application to freeze its accounts did not present the complete picture of the ongoing legal dispute.
The latest application before the Federal High Court is expected to test whether the interim restriction should remain in place while the state pursues its challenge against the arbitration award.
The development could also affect the state’s access to funds held across several commercial banks, although the restriction is tied to the amount stated in the court order.
The Federal High Court has fixed October 22, 2026, for the hearing of the motion on notice.
Until then, the account restriction remains subject to the court’s further proceedings.
The dispute comes at a time when the Osun State Government has recently faced another legal battle involving restrictions placed on its accounts.
In August, the Economic and Financial Crimes Commission restricted one of the state’s accounts in connection with an investigation into alleged transactions involving about N11 billion.
The development generated a dispute between the state government and the anti-graft agency shortly before the August 15 governorship election.
The restriction was later lifted following intervention by President Bola Tinubu, after which Governor Ademola Adeleke directed the withdrawal of the state’s legal action against the EFCC.
The latest matter is, however, separate from the EFCC dispute.
This time, the account restriction was triggered by a private contractor’s attempt to enforce an arbitration award arising from a contractual disagreement with the state government.
