Osun challenges court restriction on accounts over $13.9m arbitration award
The Osun State Government is challenging a Federal High Court order placing Post No Debit restrictions on its bank accounts over an arbitral award of $13,924,343.32 and ₦157.5 million in favour of Gamji Nigeria Company Limited.
Justice D.E. Osiagor of the Federal High Court in Lagos granted the interim preservation order in suit FHC/L/CS/1233/2026 following an application by Gamji.
The order directs commercial banks to preserve funds in Osun State Government accounts up to the value specified by the court pending determination of Gamji’s motion on notice.
The restriction is an interim preservation measure.
It does not, by itself, mean the money has been transferred to Gamji, that Osun has paid the award, or that the underlying dispute has reached a final judicial conclusion.
Dispute arose from 2017 water projects
The case stems from two water-infrastructure contracts awarded to Gamji by the Osun State Government in 2017 for projects in Ilesa West Local Government Area.
According to reporting on the arbitration and subsequent court proceedings, disagreements later arose over contract performance, extensions of time, price adjustments and increased costs.
Gamji initiated arbitration after the dispute was not resolved.
An arbitral panel delivered an award on July 24, 2026, directing Osun State to pay $13,924,343.32 and ₦157.5 million in reimbursable arbitration fees.
Reporting on the award also cites interest provisions on outstanding sums.
Gamji subsequently approached the Federal High Court seeking to preserve funds while pursuing enforcement of the award.
Court grants interim preservation order
The interim order states that the award had become due and enforceable for the purpose of preserving funds pending determination of the motion on notice.
That does not amount to a final judicial determination of all disputes surrounding the award.
Osun is separately challenging the arbitral award and the account restriction.
The preservation order is intended to keep funds available while Gamji’s motion on notice is considered.
The matter was adjourned to October 22, 2026, for further hearing.
Osun seeks to set aside award
The Osun State Government says it filed an action at the Lagos State High Court on September 1, 2026, seeking to set aside the July 2026 arbitral award.
The state also says it applied for suspension of execution of the award while that challenge is pending.
Separately, Osun says it filed an application at the Federal High Court on October 2 asking the court to discharge or set aside the September 9 ex parte account restriction.
The state alleges that Gamji failed to disclose material facts when seeking the ex parte order.
It also alleges irregularities in the arbitration process and says it was denied a fair opportunity to participate fully.
Those are Osun State’s legal claims and have not been established as court findings.
July 2024 reference disputed by state
Osun’s statement also disputes references to any arbitral award said to have been made in July 2024.
The state’s position is that no such July 2024 award existed and that the operative arbitral award was delivered in July 2026.
The July 2026 award itself is not denied by the state; Osun is challenging its validity and enforcement.
That distinction is important to the legal chronology.
What the account restriction means
The Post No Debit order restricts withdrawals from affected Osun State Government accounts up to the value specified in the court order while the enforcement proceedings continue.
It is not equivalent to payment of the award.
There is no verified evidence in the material reviewed for this report that Gamji has received the money or that the preserved sums have been debited from Osun’s accounts.
The order may constrain access to funds held in affected accounts while it remains in force.
However, no verified evidence reviewed for this report establishes that salaries, public services or specific government programmes have been disrupted as a result.
Accountability questions remain
The dispute raises unresolved questions over the management of the 2017 contracts, the path from project disagreement to a multimillion-dollar arbitral award, the validity of the arbitration process, and the legal basis for preserving state funds while enforcement is contested.
It also raises a procedural dispute over what information was placed before the Federal High Court when the interim order was sought.
Those issues remain for the courts to determine.
For now, what is established is that an arbitral panel made a July 2026 award in Gamji’s favour, the Federal High Court granted an interim Post No Debit order over Osun State accounts, and the state government is challenging both the award and the account restriction.
What is not established is that Gamji has been paid, that Osun has exhausted its legal remedies, or that the underlying dispute has reached a final judicial conclusion.
