Osun govt seeks reversal of court order restricting state’s bank accounts

The Osun State Government has asked the Federal High Court in Lagos to vacate an order restricting its bank accounts over a $13.9 million arbitration award in favour of Gamji Nigeria Company Limited, a contractor involved in water infrastructure projects in Ilesa West Local Government Area.

According to a statement signed by the state’s Commissioner of Information and Public Enlightenment, Oluomo Kolapo Alimi, and shared with PREMIUM TIMES, the government filed the application on 2 October, arguing that Gamji allegedly failed to disclose material facts when it sought the account restriction.

The state said one of the undisclosed facts was that it had already approached the Lagos State High Court to challenge the arbitration award before Gamji sought the Federal High Court order.

Mr Alimi said the state’s legal team filed the suit to set aside the arbitral award at the Lagos State High Court on 1 September, while an application was also filed to suspend enforcement of the award pending the determination of the case.

“The Counsel to the State Government had filed the suit to set aside the Arbitral Award at the Lagos State High Court since the 1st day of September, 2026 – prior to the time when Gamji Nig. Co. Ltd. surreptitiously approached the Federal High Court to deceitfully procure an ex-parte order,” Mr Alimi stated.

PREMIUM TIMES earlier reported that the Federal High Court had ordered commercial banks to place a “Post No Debit” restriction on accounts operated by the state government to preserve $13.9 million and N157.5 million awarded to Gamji.

The interim order, issued by Judge Daniel Osiagor, followed an application by Gamji Nigeria Company Limited, seeking to preserve the funds pending the determination of its motion on notice. The court adjourned the case until 22 October.

Mr Alimi said the applications challenging the award were served on Gamji and its lawyers before the company approached the Federal High Court.

He, however, stated that the company failed to disclose the pending challenge when it sought the interim restriction on the state’s accounts.

“The state government submitted that just as the court order was a product of deceit and substantial non-disclosure of material facts to the Court, the arbitration award it sought to enforce was also fraught with several irregularities,” Mr Alimi said.

Dispute over arbitration award

The dispute arose from two water infrastructure contracts awarded to Gamji Nigeria Company Limited by the Osun State Government in 2017 during the administration of former Governor Adegboyega Oyetola.

The projects involved the construction of transmission mains and booster pump stations, as well as water reservoirs in Ilesa West Local Government Area.

Gamji Nigeria Company Limited, in its suit marked FHC/L/CS/1233/2026, told the Federal High Court that the projects were funded through an Islamic Development Bank loan facility facilitated by the Federal Ministry of Finance.

The company said the original contracts were initially valued at $15.98 million and $9.70 million, respectively, before subsequent variations increased their values.

It said about 93 per cent of the work had been completed by October 2023 and that the state government issued a Substantial Completion Certificate in November 2024.

However, disagreements later arose over claims involving extensions of time, price adjustments and increased costs of materials and labour, eventually leading to arbitration.

Gamji Nigeria Company Limited said an arbitral panel issued a final award on 24 July 2026, directing the Osun government to pay $13.9 million and N157.5 million in reimbursable arbitration fees, with 20 per cent annual interest on any outstanding balance after the compliance deadline.

Gamji subsequently approached the Federal High Court after, according to its case, the 24 August deadline for compliance expired without payment.

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The Osun government, however, disputes the validity of the award and the manner in which the arbitration was conducted.

Mr Alimi said the state government was denied what it described as “fair hearing and full participation” in the arbitration process.

He said the proceedings and the eventual award were characterised by “several irregularities”, which the state has now challenged before the Lagos State High Court.

The commissioner also disputed the date and existence of an award referenced in the Federal High Court proceedings, saying there was no arbitral award against the state in July 2024 as claimed by Gamji.

“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,” Mr Alimi said.