Lawyers from Matheson believe it is probably “only a matter of time” before an application for substituted service on the blockchain is made in Ireland.
They were writing in the wake of a decision by the High Court of England and Wales to grant an application for service of court proceedings by way of the transfer of a non-fungible token (NFT) recorded to a blockchain.
The Matheson lawyers point out that personal service has long been the default method of bringing court proceedings to a person’s attention.
In a note on the firm’s website, they say that the ruling in the case of D’Aloia v. (1) Persons Unknown (2) Binance Holdings Limited & Others was a first for the courts in Britain.
Service by NFT
The claimant, who founded an online-gaming service-provider, brought proceedings against a number of crypto-currency exchanges and others for alleged misappropriation of £1.8 million of Tether and £190,000 of USD Coin.
The claimant alleged that individuals had impersonated an online brokerage, and induced him to transfer funds from his crypto-wallets to their platform.
In seeking interim relief, counsel for the claimant explained to the court that it was apparent that the alleged misappropriated funds had been transferred to private wallets and crypto-currency exchanges.
The court granted interim relief, and made an order that notice of the proceedings could be served on the defendants by way of an NFT, to be transferred to the private wallets that allegedly held the claimant's stolen crypto-currency.
Although this precise question has not yet come before an Irish court, the Matheson lawyers say that the Irish courts have demonstrated openness to evolving technology, and have granted novel orders for substituted service.
Under the Rules of the Superior Courts, the courts can grant an order for substituted service where “the plaintiff is from any cause unable to effect prompt personal service”.
The lawyers point to a case ten years ago, in which Mr Justice Peart granted an order for substituted services of proceedings by way of a private message on Facebook.
The defendant was not resident in Ireland, and the court was satisfied that extensive, but unsuccessful, efforts had been made to serve the defendant in person.
The Matheson analysis says that the courts examine each application for substituted service on its merits.
“If seeking an order for substituted service by way of a novel or innovative means, such as by way of an NFT or similar crypto-asset, given the approach of the courts to date, an applicant will need to satisfy the court that more traditional means of effecting service are not feasible,” the note says.
The lawyers add that, if the court is satisfied that substituted service is merited, there is “no obvious barrier” to service on the blockchain.
They conclude that such cases may lead to a wider debate about whether service by electronic means would provide “a more reliable, evidentially sound alternative” to personal service.