Court Restrains UBA From Paying Out Osun LG Allocations

An Oyo State High Court has issued an interim injunction restraining the United Bank for Africa (UBA) from releasing any funds from the accounts of the 30 Local Governments in Osun State that were allegedly opened by court-sacked All Progressives Congress (APC) Local Government Chairmen and councillors. The order, which was granted on Friday, September 26, 2025, followed an ex-parte application brought before the court by the Attorney-General of Osun State on behalf of the state government. Justice A.L. Akintola of Court 5 delivered the ruling, which effectively halted any withdrawals or payments from the contentious accounts pending the hearing and determination of a substantive motion on notice for interlocutory injunction already filed in the case.

The controversy erupted after the Federal Government released statutory allocations for each of the 30 Local Governments in Osun State into these disputed accounts. The state government swiftly challenged the move, filing suit number 1/1149/25 to restrain the bank from allowing access to the funds. In the case, the Osun State Attorney-General acted as the Claimant/Plaintiff while UBA was listed as the sole Defendant/Respondent.

In the reliefs sought, the plaintiff asked the court to restrain UBA from paying out any money from the statutory Local Government funds belonging to all the 30 Local Governments in Osun State. Specifically, the orders sought included an interim injunction mandating the bank not to release any of the funds to any individual or group, whether natural or artificial, until the motion on notice for interlocutory injunction is heard and determined.

24 States To Benefit As FG Secures AfDB Support For SAPZ Initiative

Justice Akintola, after reviewing the application, affidavit, exhibits, and arguments presented by counsel to the state government, A.A. Abass Esq, held that the situation warranted urgent judicial intervention. In his ruling, the judge stated that any delay in granting the interim orders could result in “irreversible harm, injury, or situation of helplessness” for the claimants. He emphasized that the orders were only interim in nature, giving the defendant bank an opportunity to appear before the court to contest the motion on notice for interlocutory injunction at the next hearing. Consequently, the court granted the interim injunction as prayed and adjourned the matter to October 3, 2025, for further proceedings.

Justice Akintola’s ruling underscored the necessity of protecting public funds and maintaining order until the substantive issues are determined. The decision temporarily safeguards the allocations meant for the 30 Local Governments in Osun State from being disbursed under disputed circumstances.

In a covering letter dated September 26, 2025, the state government’s lead counsel, Mr Musibau Adetunbi, SAN, formally notified UBA of the court’s ruling and stressed the bank’s obligation to comply. The letter, which was addressed to the bank’s head office in Lagos and its branch in Osogbo, reiterated that UBA had been duly served with all relevant processes, and its Legal Department was aware of the order. However, out of what the counsel described as an “abundance of caution,” the letter further reminded the bank’s leadership of its duty to obey the subsisting order.

The letter stated: “Kindly find attached a copy of the interim order granted against your bank in the above-named suit. Kindly be informed that all relevant processes have been duly served on your bank and your Legal Department has equally been notified of the Order. However, out of abundance of caution, we believe that you are one of the authorities of the Bank that we should notify. The essence of this letter is just to remind you of your duty to comply with the above-stated order, so long as it subsists, and which obviously was made pending the hearing of Motion on Notice.”

The correspondence further clarified that the injunction covers any statutory payment made to the bank for the benefit of the 30 Local Governments in Osun State. It also included a list of the 30 contentious bank accounts and their details, while noting that the order extended to any other accounts that may not have been specifically mentioned in the court filings.

The background to this legal battle stems from the lingering political tussle in Osun State. The APC Local Government Chairmen and councillors, whose tenures had earlier been nullified by the courts, are accused of opening new accounts into which the Federal Government released the Local Government allocations. The Osun State Government, led by the Attorney-General, contends that such actions are illegal and unconstitutional, hence the need to prevent disbursement of the funds until proper legal determination is made.

The implications of the ruling are significant for governance and grassroots development in Osun State. Statutory allocations represent the primary source of funding for Local Governments across Nigeria, and any disruption in their disbursement could impact service delivery, including education, healthcare, and rural infrastructure. The interim injunction effectively freezes the funds, leaving the Local Governments in a financial limbo until the matter is resolved.

Observers note that the case also raises questions about the role of financial institutions in managing politically sensitive accounts. By restraining UBA, the court has sent a strong signal about the responsibility of banks to ensure compliance with constitutional and legal provisions when handling public funds.

Legal analysts have suggested that the adjourned hearing on October 3, 2025, will be pivotal, as the court will consider whether to extend the order into a full interlocutory injunction. If granted, such an order could restrain the bank for a longer period, pending the conclusion of the substantive suit.

Meanwhile, political stakeholders in Osun State continue to watch closely, as the battle over Local Government funds ties into broader disputes about control, legitimacy, and governance at the grassroots level. The ruling by Justice Akintola is widely regarded as a temporary victory for the Osun State Government, but the final outcome will depend on further arguments and evidence presented when the case resumes.

For now, UBA is legally bound to comply with the order and refrain from allowing any withdrawals or payments from the disputed accounts. Any breach could expose the bank to contempt proceedings, further complicating the matter.

As the situation unfolds, attention will be on the October 3 hearing, where both the state government and UBA will have the chance to make more comprehensive arguments before the court. Until then, the funds remain locked under judicial restraint, highlighting the delicate balance between politics, law, and finance in the administration of Local Government resources in Nigeria.