Osun Accounts Under Threat As Court Directs Banks To Impose Restrictions

The Federal High Court sitting in Lagos has ordered 11 commercial banks to place “Post No Debit” restrictions on accounts operated by the Osun State Government over an outstanding arbitration award of $13.924 million and ₦157.5 million in favour of Gamji Nigeria Company Limited.

Justice D.E. Osiagor issued the interim preservation order following an application filed by Gamji through its counsel, Yunus AbdulSalam, SAN, in a suit marked FHC/L/CS/1233/2026.

According to Bush Radio Academy, the company is seeking to enforce an arbitral award arising from water infrastructure projects carried out in Ilesa West Local Government Area of Osun State.

The financial institutions affected by the order 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.

The court directed the banks to preserve funds belonging to the Osun State Government up to the value of the amounts awarded to Gamji, pending the determination of the substantive application before the court. The interim order restricts debits from the affected accounts to the extent necessary to preserve the funds covered by the award.

The dispute dates back to two contracts reportedly awarded to Gamji by the Osun State Government in June 2017 for water infrastructure works in Ilesa West. The projects involved the construction of transmission mains and booster pump stations under one contract, as well as water reservoirs under another.

According to documents filed in court, the projects formed part of a wider water supply and sanitation programme financed through an Islamic Development Bank loan facility facilitated by the Federal Ministry of Finance.

Gamji stated that the original contracts were valued at approximately $15.98 million and $9.70 million respectively. The company later claimed that changes to engineering designs and variations in the scope of work resulted in delays and revisions that increased the contract values to about $20.24 million and $10.95 million.

The company further claimed that approximately 93 per cent of the projects had been completed by October 2023 and that the Osun State Government issued a Substantial Completion Certificate in November 2024.

Disagreements subsequently arose over claims relating to extensions of time, adjustments to contract prices and increased costs of materials and labour. Gamji said attempts to resolve the dispute through mediation were unsuccessful, leading to the commencement of arbitration proceedings in 2025.

The arbitral panel eventually issued its final award on July 24, 2026, directing the Osun State Government to pay Gamji $13,924,343.32 and ₦157.5 million in reimbursable arbitration expenses. The award also provided for 20 per cent annual interest on any outstanding amount after the stipulated compliance period.

Gamji told the court that the August 24, 2026 deadline for compliance expired without payment of the awarded sums, prompting the company to seek an order preserving funds in the state government’s bank accounts.

Justice Osiagor subsequently granted the interim preservation order and directed the affected banks to restrict withdrawals to the extent required to preserve the amounts covered by the arbitration award.

The court has adjourned the matter until October 22, 2026, for hearing of the motion on notice.

The order is an interim measure to preserve the funds while the enforcement proceedings continue and does not, at this stage, amount to a final determination of all issues between Gamji and the Osun State Government.