Osun State files application to overturn account-freezing order

The Osun State Government has disclosed that it has filed an application before the Federal High Court in Lagos, seeking to vacate the interim order freezing its accounts over a $13.9 million arbitration award in favor of Gamji Nigeria Company Limited.

A statement by the Commissioner for Information and Public Enlightenment, Kolapo Alimi, noted that the order was procured through deceit and the concealment of material facts, and that it does not accord with public policy.

Recall that Justice D.E. Osiagor of the Federal High Court, Lagos, had on September 9, 2026, ordered commercial banks to place a Post No Debit restriction on accounts operated by the state government following an application filed by Gamji through its counsel, Yunus AbdulSalam, SAN, in suit number FHC/L/CS/1233/2026.

The company is seeking to preserve $13,924,343.32 and N157.5 million awarded to it after arbitration proceedings arising from water infrastructure projects in Ilesa West Local Government Area.

According to the affidavit filed by Gamji, the dispute arose from two contracts awarded to it by the Osun State Government in June 2017 for water infrastructure works involving the construction of transmission mains, booster pump stations, and water reservoirs, as part of a water supply and sanitation project funded through an Islamic Development Bank loan facility.

Gamji claimed the original contract values were $15.98 million for Slot 1 and $9.70 million for Slot 2, but engineering design alterations and scope variations raised them to $20.24 million and $10.95 million respectively. It claimed 93 percent of the contract had been completed by October 2023, with a Substantial Completion Certificate issued on November 14, 2024.

Disagreements over extensions of time, price adjustments, and escalated costs led to arbitration, with the panel issuing a final award on July 24, 2026, directing the state government to pay $13,924,343.32 and N157.5 million as reimbursable arbitration fees, plus 20 percent annual interest after the compliance period.

However, Alimi, in the statement on Sunday, said the state government filed an application to set aside the order on October 2, 2026.

According to the state government, the order was not only a product of deceit and non-disclosure, but the award it sought to enforce was also fraught with irregularities.

The statement noted that there was no arbitral award against the state government in July 2024 as referenced, pointing out that the only award was made in July 2026 and is already being challenged before the Lagos State High Court.

“The 2017 contract dispute started under the former Oyetola administration, which denied a variation request by Gamji, particularly as it relates to whether the Osun State Government was indebted to Gamji to the tune of $15,982,638.22 or not.”

“The matter proceeded to arbitration, which was deliberately mismanaged and handled to favor Gamji Nigeria Company Limited, while denying the State Government a fair hearing and full participation,” the statement read.

The government stated that its counsel had filed a suit to set aside the award at the Lagos State High Court on September 1, 2026, alongside a motion on notice to suspend execution of the award pending determination. Both processes, it said, were duly served on Gamji and its counsel.

“Despite being in receipt of the originating motion and motion on notice filed before the Lagos State High Court, Gamji furtively approached the Federal High Court to enforce the same award being challenged.”

“Gamji failed to disclose that the validity of the award was being challenged or that it was served with an application to suspend any action aimed at executing the said award until the suit was heard and determined,” Alimi said.

The Commissioner added that the deceptive ploy has been relayed to the Federal High Court and that, since the matter is still sub judice, the government refrains from making prejudicial comments.

“The Osun State Government wishes to reassure the public that necessary legal action is ongoing to vacate the order and ensure the due rights of the state are observed through judicial review of the arbitration award,” the statement concluded.