Court Delivers Ruling in Binance Motion Challenging FIRS’ Substituted Service
The Federal High Court in Abuja has fixed Nov. 12 for ruling in a motion filed by Binance Holdings Limited seeking to void the substituted service of court documents served on it by the Federal Inland Revenue Service (FIRS).
Justice Mohammed Umar, on Wednesday, fixed the date after Binance lawyer and counsel for the FIRS adopted their processes and presented their arguments for and against the application.
The agency had, in the suit dragged Binance, Tigran Gambaryan and Nadeem Anjarwalla, who were the company’s representatives, to court, demanding 79.5 billion dollars over economic losses allegedly caused by their operations in Nigeria.
In the originating summons marked: FHC/ABJ/CS/1444/2024, dated and filed Sept. 30, 2024, by Chief Kanu Agabi, SAN, the country’s’ tax regulatory body sought four questions for determination.
The FIRS prayed the court to determine “whether pursuant to Section 13(2) of the Companies Income Tax (CIT) Act Cap. C21, LFN, 2024 and Order (1)(a) and (c) of Companies Income Tax (Significant Economic Presence) Order 2020, the defendants are not liable to pay annual corporate income tax to the Federal Government.
Another court, presided over by Justice Emeka Nwite had, in October 2024, released Gambaryan after the Federal Government withdrew a money laundering charge filed against him and the company by the EFCC.
Besides, Anjarwalla, an executive of Binance who was detained alongside Gambaryan for tax evasion and other offences, escaped from lawful custody earlier on March 22, 2024.
The News Agency of Nigeria (NAN) reports that the case, which was formerly before Justice Inyang Ekwo, was reassigned to Justice Umar.
Justice Ekwo had, on Feb. 11, granted leave to FIRS to serve its originating summons and accompanying documents on the cryptocurrency firm through substituted means by sending the processes via email address: Eleanor-huges@binance.com.
The federal revenue agency, through its lawyer, Kanu Agabi, SAN, had, in an ex-parte motion, told the court its inability to effect service of court papers on the firm because it had no physical presence in the country.
Binance lawyer, Chukwuka Ikwuazom, SAN, filed a motion on notice dated and filed on April 4, urging the court to set aside the ex-parte order.
He also sought an order setting aside the purported substituted service of the originating processes on Binance through the electronic email.
Giving nine-ground argument, Ikwuazom submitted that Binance is a company registered under the laws of Cayman Island and resident in Cayman Island.
He argued that by the rules of the court, an originating process or any other document issued by the court can only be served on a company by delivering it to a director, secretary or other principal officer of the company or by leaving it at the registered office of the company.
According to him, the originating processes and documents of this court cannot be served on a company such as the applicant by substituted means.
“By the Rules of this Court, service of originating processes outside jurisdiction can only be made in accordance with the provisions of Order 6 Rule 18 of the Rules of this Court (in the absence of a service convention) or in accordance with Order 6 Rule 20 of the Rules of this Honourable Court (where a service convention exists) and only after the leave of the Court to serve outside jurisdiction has been sought and granted.”
Ikwuazom argued that FIRS failed wholly to follow the process prescribed by the rules of the court for service of the originating processes on the company outside the jurisdiction of the court.
“The respondent also failed to obtain the required leave of this Honourable Court to serve the Originating Processes on the applicant outside the jurisdiction of this court,” he added.
He said, “substituted service of a process on a defendant outside jurisdiction can only be made where the government or a court of the foreign country where the process was intended to be served certifies to this Honourable Court that the efforts made to serve the process have failed.”
He prayed the court to grant their prayers.
But FIRS, through its lawyer, disagreed with Binance submission.
In its counter affidavit dated and filed on April 14, and deposed to by Ishaya Isuwa, a litigation officer, the agency argued that the depositions in the affidavit of Binance were totally false and concocted in an attempt to mislead the court.
Isuwa submitted that Binance was not registered under the laws of Cayman Islands and is also not resident in Cayman Islands as claimed.
He said that the company’s registration status and residence is shrouded in secrecy.
Besides, the officer argued that the cryptocurrency firm did not exhibit its certificate of registration in Cayman Islands before the court.
“The 1st defendant (Binance) has no registered address in Cayman Islands but only has significant economic presence in Nigeria,” he added.
He said it only operates an online platform that deals in crypto and virtual currencies transactions globally, including the Federal Republic Nigeria.
Isuwa said contrary to the submission of Binance, he said Eleanor Hughes, whose email address was used for service, is the General Counsel and a principal officer of the firm who duly received all the processes served on the company through her email address
He said Hughes, sometimes on March, 5 2024, caused a letter to be written to the Economic and Financial Crimes Commission, appointing the law firm of Aluko & Oyebode to provide legal representation to its in connection with an investigation into the activities of the company in Nigeria.
He said Hughes had written several official communications, through the email, to the Federal Government.
The litigation officer said the law firm of Aluko & Oyebode had been representing Binance in connection with the ongoing investigation into its activities in the country.
He said there was an attempt to serve all the processes in the matter on Tigran Gambaryan, the company’s representative who was in Kuje Correctional Centre then, but that Gambaryan directed that the documents be served on the law firm.
He said when the bailiff was mobilised for the service, Aluko & Oyebode Law Firm declined to receive the documents, saying that they had not been briefed by Binance.
Isuwa submitted that upon the service of the court processes on Binance as ordered by the court, the pendency of the suit had been brought to the knowledge of the company who had briefed its lawyer, Aluko Oyebode and Co, to represent it before this court.
He argued that Ikwuazom, who appeared for the firm, was before the court because he had been briefed by the company.
He said Binance had not shown that it suffered any miscarriage of justice as a result of the service of the court documents by substituted means.
According to him, service of the originating processes on the 1st defendant/applicant through Eleanor Hughes is good service in accordance with rules of this honourable court. Isuwa said it would be in the interest of justice to dismiss the application by Binance. #Court Delivers Ruling in Binance Motion Challenging FIRS’ Substituted Service#
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