$79.5bn loss: FIRS urges court to dismiss Binance’s application to vacate order

The Federal Inland Revenue Service (FIRS) has asked the Federal High Court in Abuja to dismiss an application by Binance Holdings Limited seeking to overturn an ex-parte order permitting substituted service of court documents.

Justice Inyang Ekwo had, on 11 February 2025, granted FIRS permission to serve Binance with legal documents via electronic means, specifically through the email address of Eleanor Hughes, a senior official of the cryptocurrency firm. This followed a request by FIRS, represented by Senior Advocate of Nigeria (SAN), Kanu Agabi, citing Binance’s lack of physical presence in Nigeria as a barrier to traditional service.

In response, Binance’s counsel, Chukwuka Ikwuazom, SAN, filed a motion dated 4 April requesting the court to nullify the order for substituted service. He also sought an order declaring the service of originating processes via email as invalid.

Presenting a nine-point argument, Ikwuazom stated that Binance is registered and based in the Cayman Islands. He argued that under the court’s rules, a company must be served either by delivering the documents to a director, secretary, or principal officer, or by leaving them at the company’s registered office.

He added that substituted service on a company situated outside Nigeria is only valid where the court grants leave, in line with Order 6 Rule 18 or Rule 20 of the Federal High Court rules, depending on whether a service convention exists with the foreign jurisdiction. According to Ikwuazom, FIRS had not complied with these legal requirements.

He also contended that such substituted service is only permissible if the foreign government or court confirms failed attempts at conventional service, which was not the case here.

However, FIRS disagreed, maintaining that Binance’s application was both misleading and legally flawed.

In a counter-affidavit dated 14 April, deposed by litigation officer Ishaya Isuwa, FIRS rejected Binance’s claim of being registered and resident in the Cayman Islands. Isuwa argued that the company’s true legal status and physical base remain obscure, and noted that Binance failed to provide any registration certificate or verifiable address in the Cayman Islands.

He stressed that Binance has a strong economic footprint in Nigeria and operates a global platform used extensively for cryptocurrency and virtual currency transactions within the country.

Addressing the issue of service, Isuwa insisted that Eleanor Hughes, the email recipient of the court documents, is Binance’s General Counsel and a key officer of the company. He revealed that Hughes had engaged in multiple official communications with Nigerian authorities, including the Economic and Financial Crimes Commission (EFCC), on Binance’s behalf.

He added that Hughes had authorised the law firm Aluko & Oyebode to represent Binance during an investigation by the EFCC. This, he argued, shows that the firm was fully aware of the legal proceedings and had taken steps to defend its interests.

Isuwa further stated that an attempt was made to serve Binance’s detained representative, Tigran Gambaryan, at the Kuje Correctional Centre, but Gambaryan redirected the service to Aluko & Oyebode. However, the law firm declined to accept the documents, claiming it had not been officially briefed by Binance at the time.

He concluded that the service via Eleanor Hughes constituted valid service and fulfilled the requirements of the court rules. He urged the court to dismiss Binance’s application, asserting that no miscarriage of justice had occurred and that the company had already engaged legal representation as a result of the service.

When the matter was called on Wednesday, Ikwuazom informed the court that the hearing was scheduled for the application filed on 4 April. He also presented a motion for an extension of time, dated 28 April, to regularise their filings. The court granted the extension, as it was not opposed by Agabi.

Agabi, however, informed the court that he would be responding in detail to the substantive motion brought by Binance’s counsel.

Justice Ekwo adjourned the matter until 12 May for hearing of the motion on notice.

FIRS had filed the suit, marked FHC/ABJ/CS/1444/2024, on 30 September 2024. The tax agency named Binance Holdings, Tigran Gambaryan and Nadeem Anjarwalla as defendants and is seeking $79.5 billion in damages over alleged economic losses linked to the company’s activities in Nigeria.

In the originating summons, FIRS posed four legal questions, including whether Binance is liable under Section 13(2) of the Companies Income Tax Act 2024 and the 2020 Significant Economic Presence Order, to pay corporate income tax for having substantial economic operations in Nigeria between 2022 and 2023.

In a related development, Justice Emeka Nwite of a separate court had, in October 2024, released Gambaryan after the Federal Government dropped a money laundering charge filed by the EFCC against him and Binance.

Meanwhile, co-defendant Nadeem Anjarwalla escaped custody on 22 March 2024 after being detained on suspicion of tax evasion and other offences.