Reported by Ariajegbe Sylvia Esezobor
The Osun State Government has filed an application before the Federal High Court in Lagos seeking to set aside an ex-parte order that placed restrictions on bank accounts operated by the state government over a $13.9 million arbitration award in favour of Gamji Nigeria Company Limited, a contractor that handled water infrastructure projects in the state. The government also reassured the public that necessary legal action had commenced to vacate the order and ensure the due rights of the state were observed through judicial review of the arbitration award.
The Federal High Court in Lagos had ordered commercial banks to place a "Post No Debit" restriction on accounts operated by the Osun State Government. Justice D.E. Osiagor issued the interim order following an application filed by Gamji through its counsel, Yunus AbdulSalam, SAN, in a suit marked FHC/L/CS/1233/2026. The order covers funds up to $13,924,343.32 and N157.5 million, pending the hearing and determination of Gamji's motion on notice. The banks listed in 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, among others.
The dispute dates back to two contracts awarded to Gamji by the Osun State Government in June 2017 for water infrastructure projects during the administration of former Governor Adegboyega Oyetola. The contracts covered the construction of transmission mains and booster pump stations under Slot 1, as well as water reservoirs under Slot 2, under a water supply and sanitation project in Ilesa West Local Government Area. Gamji said the projects were financed through an Islamic Development Bank loan facility facilitated by the Federal Ministry of Finance. The original value of the Slot 1 contract was $15.98 million, while Slot 2 was valued at $9.70 million. Subsequent engineering design changes and variations in the scope of work resulted in delays and revisions to the project costs, with Slot 1 increasing to $20.24 million and Slot 2 rising to $10.95 million.
Gamji claimed that it had completed 93 per cent of the contracted works by October 2023, after which the state government issued a Substantial Completion Certificate on November 14, 2024. The company said disputes later emerged over claims relating to extensions of time, price adjustments and increased costs of materials and labour. According to Gamji, the state government rejected the claims, and attempts to resolve the disagreement through mediation failed. The company subsequently issued an arbitration notice on April 3, 2025, which the state government accepted, nominating its arbitrator. Preliminary proceedings were held in Lagos on May 15, 2025. The arbitral panel delivered its final award on July 24, 2026, directing the Osun State Government to pay $13,924,343.32 and N157.5 million in reimbursable arbitration fees, with interest at an annual rate of 20 per cent on any outstanding amount after the compliance period. Gamji said the compliance deadline expired on August 24, 2026, without payment, prompting it to approach the Federal High Court for relief.
However, the Osun State Government, in a statement signed by the Commissioner for Information and Public Enlightenment, Kolapo Alimi, declared that the order "was a product of deceit and substantial non-disclosure of material facts to the court" and that the arbitration award it sought to enforce "was also fraught with several irregularities." The government said the development prompted its legal team to approach the High Court of Lagos State to set aside the award. The statement further read, "In fact, it was reported that the purported award which the ex-parte order of 9th September, 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."
The government traced the history of the case, noting that the 2017 contract dispute started under the administration of former Governor Oyetola, which denied a variation request by Gamji, particularly as it related to whether the Osun State Government was indebted to the company to the tune of $15,982,638.22. "The matter proceeded for arbitration, which was deliberately mismanaged and handled to favour Gamji Nigeria Company Limited, while denying the state government a fair hearing and full participation in the arbitration process as mandated by best practice," the statement alleged. The government disclosed that its counsel had filed the suit to set aside the arbitral award at the Lagos State High Court since September 1, 2026, prior to the time Gamji "surreptitiously approached the Federal High Court to deceitfully procure an ex-parte order." Alongside the originating motion, a motion on notice was filed to suspend the execution of the award until the suit is heard and determined. Both processes were duly served on Gamji and its counsel, the government said, adding that it was surprised that despite being served, Gamji approached the Federal High Court to enforce the same award.
The latest restriction comes barely weeks after the Economic and Financial Crimes Commission lifted a freeze on some of the state's accounts following President Bola Tinubu's intervention. The EFCC had restricted Osun government accounts during the build-up to the August 15 governorship election over an investigation into the alleged handling of about N11 billion in Ecology Funds, Intervention Funds and Federation Account Allocation Committee allocations. The timing of that restriction became controversial because it occurred 10 days before the election, and President Tinubu subsequently directed the EFCC to vacate the order, saying the timing was capable of creating an impression that a federal agency was being used to interfere with the election. The accounts were eventually unfrozen on August 22. The latest restriction is unrelated to the EFCC matter and stems instead from the arbitration dispute with Gamji. The state government said its legal team would continue to pursue the matter before the relevant courts and urged residents to remain calm as the judicial process unfolds.
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