The Osun State Government has asked the Federal High Court in Lagos to lift an interim order restricting withdrawals from its bank accounts over a disputed $13.9 million arbitral award, arguing that the contractor behind the order failed to disclose that the state had already challenged the award before another court.
Key Highlights
- Osun State is challenging an interim account freeze order linked to a $13.9 million arbitral award.
- The restriction also covers ₦157.5 million in reimbursable arbitration fees.
- The order directs several banks to place a “Post No Debit” restriction on specified Osun government accounts.
- The dispute involves water-infrastructure contracts awarded to Gamji Nigeria Company Limited in 2017.
- An arbitral panel issued a final award on July 24, 2026.
- Osun says it had already filed proceedings to set aside the award before Gamji sought the Federal High Court order.
- Gamji argues that the award is due and that the funds should be preserved pending the court hearing.
- The Federal High Court has fixed the hearing for October 22, 2026.
- The account restriction does not amount to a blanket seizure of all Osun State funds.
Osun Challenges $13.9 Million Account Freeze
The Osun State Government is seeking to overturn an interim order restricting withdrawals from some of its bank accounts in connection with an arbitral award worth $13,924,343.32 and ₦157.5 million.
Justice D.E. Osiagor of the Federal High Court in Lagos granted the interim restriction in Suit No. FHC/L/CS/1233/2026 following an ex parte application by Gamji Nigeria Company Limited through its counsel, Yunus AbdulSalam, SAN.
The order directed affected banks to place a “Post No Debit” restriction on Osun government accounts sufficient to preserve the amounts covered by the award pending the hearing of Gamji’s motion on notice.
The hearing has been scheduled for October 22, 2026.
Banks Ordered to Restrict Osun Accounts
The financial institutions named 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 restriction does not make the banks debtors in the dispute. Instead, the order prevents the affected banks from processing debits against Osun government accounts up to the amounts required to preserve the sums contained in the arbitral award.
How the Osun-Gamji Dispute Started
The dispute stems from two water-infrastructure contracts awarded by the Osun State Government to Gamji Nigeria Company Limited in June 2017 for projects in Ilesa West Local Government Area.
Gamji subsequently raised claims involving extensions of time, price adjustments and increased material and labour costs. After mediation failed, the company issued an arbitration notice on April 3, 2025.
An arbitration panel constituted with the participation of the state eventually issued a final award on July 24, 2026.
The award ordered Osun State to pay approximately $13.9 million and ₦157.5 million, including reimbursable arbitration fees, with interest reportedly set at 20 per cent annually on unpaid sums.
Osun Says It Had Already Challenged the Award
The Osun State Government has disputed the manner in which Gamji sought to preserve the funds.
Osun Commissioner for Information, Kolapo Alimi, said the state believes the ex parte application failed to disclose important information concerning the existing legal challenge to the arbitral award. Alimi described the Federal High Court application as having been based on what he called “deceit and substantial non-disclosure of material facts.”
The commissioner also said the state considers the arbitral award to contain several irregularities. These remain claims by the Osun State Government and have not been determined by the court.
Osun Had Filed Set-Aside Proceedings
According to the state government, its lawyers had already approached the High Court of Lagos State on September 1, 2026, seeking to set aside the July arbitral award.
The state also said it had filed an application seeking to suspend execution of the award before Gamji approached the Federal High Court for the account-preservation order.
Reports indicate that Osun’s application seeking to vacate the Federal High Court restriction was filed on October 2, 2026. The state is now asking Justice Osiagor to lift the debit restriction while its challenge to the arbitral award remains pending before the Lagos State High Court.
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Gamji Seeks to Preserve Award Funds
Gamji’s position is that the arbitral award is due and enforceable and that the funds should be preserved to prevent the money from being moved before the court considers its motion on notice. The contractor therefore sought the interim restriction against the affected Osun government accounts.
Osun, however, maintains that the Federal High Court should not have granted the restriction without taking into account its existing proceedings challenging the award. The competing arguments will now be considered by the court.
What the Osun Account Freeze Means
The Osun $13.9 million account freeze does not mean that every account belonging to the state has been confiscated or that all government funds have been seized. The interim order is targeted at preserving funds up to the amounts specified in the arbitral award.
The state government has also sought to reassure the public that the restriction should not automatically be interpreted as meaning that salaries, government operations or all state finances have been frozen.
October 22 Hearing to Determine Next Step
The next major development in the case is expected on October 22, 2026, when the Federal High Court is scheduled to hear Gamji’s motion on notice. The court will also have to consider Osun’s request to vacate the interim restriction.
At the centre of the dispute are two competing legal positions: Gamji’s argument that the award should be protected and Osun’s contention that the preservation order should be lifted because the state had already commenced proceedings challenging the award.
Until the court rules, the affected banks remain bound by the existing “Post No Debit” order in respect of the preserved sums.
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