Federal Court Freezes Osun State Bank Accounts Over $13.9m Debt

Lagos's Federal High Court has instructed financial institutions to block access to bank accounts held by Osun State Government, preventing fund withdrawals. Following an application submitted by Gamji Nigeria Company Limited through its legal representative Yunus AbdulSalam (SAN), Justice D.E.

Osiagor issued this interim order. The matter, docketed as FHC/L/CS/1233/2026, arises from disagreement surrounding water infrastructure work implemented across Ilesa West Local Government Area.

Gamji seeks recovery of $13,924,343.32 plus N157.5 million in an arbitration-determined debt. To safeguard these funds pending resolution, Gamji's counsel petitioned the court for a preservation directive.

Known colloquially as "Post No Debit" restrictions, this mechanism prevents Osun State from making withdrawals via its accounts at major commercial banks. Several large financial institutions received inclusion in the court's directive, though comprehensive identification of all affected banks remains unavailable from available sources.

The fundamental disagreement traces to infrastructure initiatives spanning water supply and sanitation in the state. Through arbitration, it was established that Osun State owes Gamji the cited amounts.

The state government has neither made public statements regarding the ruling nor disclosed intentions about appealing or satisfying the obligation. Operations of Osun State Government face significant disruption due to this account freeze, as routine spending cannot proceed until settlement occurs.

Pending additional judicial determinations in the ongoing dispute, this interim directive continues as binding. Documentation from the court became accessible to news organizations beginning October 3, 2024.