Court orders banks to restrict Osun accounts over $13.9m, N157.5m arbitration award The federal high court in Lagos has ordered banks to place a
“post no debit” restriction on accounts operated by the Osun state government
over a $13.9 million arbitration award in favour of Gamji Nigeria Company
Limited.
The order was issued by D.E. Osiagor, judge of the federal
high court, following an application by Gamji through its counsel, Yunus
AbdulSalam, senior advocate of Nigeria (SAN), in a suit marked
FHC/L/CS/1233/2026.
The court directed the banks to preserve $13,924,343.32 and
N157.5 million in the state’s accounts pending the determination of Gamji’s
motion on notice.
The affected financial institutions 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.
Gamji is seeking to enforce an arbitral award arising from
water infrastructure projects it executed for the Osun government in Ilesa west
LGA.
In the interim order, the judge directed the banks to
immediately restrict withdrawals from the state government’s accounts.
“A preservation order of interim injunction is granted
directing the cited financial institutions in Nigeria to immediately place a
Post No Debit restriction on the Respondent’s account domiciled with them for
the preservation of the funds with them in the sum of $13,924,343.32 and
N157,500,000.00 towards the liquidation of the Arbitral Award dated 24th July,
2026 which has become due and enforceable, pending the hearing and
determination of the motion on notice,” the order reads.
The court adjourned the case until October 22 for hearing of
the motion on notice.
BACK STORY
The dispute between Osun state government and Gamji involves
two contracts awarded to the company in June 2017 for water infrastructure
projects in Ilesa west LGA.
The projects involved the construction of transmission mains
and booster pump stations under slot 1, and water reservoirs under slot 2.
The projects were part of a water supply and sanitation
programme funded through an Islamic Development Bank loan facility facilitated
by the federal ministry of finance.
Gamji said the original value of the slot 1 contract was
$15.98 million, while slot 2 was valued at $9.70 million.
According to the company, changes to the engineering designs
and variations in the scope of work caused delays and led to revisions of the
contract values.
The amended values were put at $20.24 million for slot 1 and
$10.95 million for slot 2.
Gamji said it had completed 93 percent of the work by
October 2023 and that the state government issued a substantial completion
certificate on November 14, 2024.
Disagreements later arose over claims relating to extensions
of time, price adjustments and increased costs of materials and labour.
Gamji said the state government rejected its claims, leading
to unsuccessful mediation attempts and the issuance of an arbitration notice on
April 3, 2025.
The state government subsequently accepted the arbitration
process and nominated its arbitrator, with preliminary proceedings held in
Lagos on May 15, 2025.
On July 24, 2026, the arbitral panel issued its final award,
directing the Osun state government to pay Gamji $13,924,343.32 and N157.5
million in reimbursable arbitration fees.
The panel also awarded 20 percent annual interest on any
outstanding balance after the expiration of the compliance period.
Gamji said the compliance deadline expired on August 24
without payment by the Osun state government, prompting the company to approach
the federal high court.
OSUN ASKS COURT TO SET ASIDE THE ORDER
However, the Osun state government has asked the federal
high court to set aside the order.
In a statement issued on Sunday, Kolapo Alimi, commissioner
for information and public enlightenment, said the state had filed an
application seeking to vacate the ex-parte order issued on September 9.
Alimi alleged that the order was obtained through “fraud,
deceit and concealment of material facts”.
He also described the arbitration award as “rigged,
dishonest and fake”, alleging that the process was “deliberately mismanaged and
fraudulently handled” in favour of Gamji.
According to the commissioner, the state government was
denied a fair hearing and full participation in the arbitration proceedings.
He said the state government’s lawyers initially filed a
suit challenging the award but later discontinued the case.
Alimi said a fresh suit was subsequently filed at the Lagos
state high court on September 1, seeking to set aside the award on the grounds
that Lagos was the seat of the arbitration.
He said Osun state government also filed an application
asking the Lagos state high court to suspend enforcement of the award pending
the determination of its challenge.
According to him, the court processes were served on Gamji
and its lawyers. He alleged that the company subsequently approached the
federal high court to enforce the same award despite being aware that it was
already being challenged before the Lagos state high court.
The commissioner said Gamji failed to disclose the pending
Lagos suit and the application seeking to suspend enforcement of the award when
it approached the federal high court.
He said the alleged non-disclosure resulted in the ex-parte
order of September 9, adding that the state was pursuing the necessary legal
steps to challenge the arbitration award.
Alimi said since the matter is before the court, the state
government would refrain from making further comments on the merits of the
case.
Source:
Court orders banks to restrict Osun accounts over $13.9m, N157.5m arbitration award
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December 24, 2016, 01:01:33 pm