The well-publicised dispute between Russian billionaire Vladimir Potanin and his ex-wife Natalia Potanina is being heard by the Supreme Court of England and Wales over 30 October and 1 November 2023. Divorce and Family senior associate Sarah Havers explains why Mrs Potanina is bringing her financial remedies claim in this jurisdiction, and the importance of this case within the family law landscape.
Mrs Potanina has, for almost a decade now, been litigating around the world in an effort to obtain a greater share in her ex-husband’s “formidable fortune” of c.$20bn. So far she has not succeeded in increasing her financial award by the Russian court from $40m-$80m (there is a dispute between the parties as to the value of the award she has already received), which she says represents c. 0.3% of the wealth built up during their long marriage.
Since 2019 Mrs Potanina has been trying to obtain permission to bring a claim in England and Wales in the hope that the English court will award her a share in Mr Potanin’s extensive business assets held via companies and corporate structures.
Why would a divorcing spouse bring their claim in England and Wales?
London is the divorce capital of the world and the English court is known as one of the most generous in the world to the poorer spouse. As a result, it is not uncommon for a spouse of a wealthy international family to do everything they can to ensure their divorce and financial claims are decided by an English judge (a tactic often referred to as “forum shopping”).
The English court’s power to make financial awards even extends to couples who are already validly divorced overseas but where one spouse did not receive any, or any adequate, financial award. Albeit in these cases the scale of the financial award the court can make is often more limited than if the divorce had taken place in England. This power is contained in a forty-year-old piece of legislation, Part III of the Matrimonial and Family Proceedings Act 1984 (commonly referred to as Part III). Mrs Potanina is attempting to bring her claim under Part III, in the hope the English court makes a further financial award in her favour, in addition to that already made by the Russian court.
In an effort to limit “forum shopping”, bringing a claim under Part III requires the claiming spouse to have substantial connections to England and for the court to make a preliminary decision at the outset as to whether the claim should be allowed to proceed to a full hearing.
What is the significance of this case?
Ostensibly, the Supreme Court will be considering technical questions as to the procedure for granting permission to bring a Part III claim, but many family law practitioners hope that the Supreme Court will also use this case as an opportunity to offer up some further guidance as to the scope of financial awards made under Part III, particularly in cases such as this one where an award has already been made overseas by a foreign court.
Partner Emma Hatley comments: “Many see the English court’s increasing willingness to ‘top up’ foreign financial awards as encouraging forum shopping. Ex-spouses move to England (after divorcing abroad) in the hope of obtaining a second, more generous, bite of the cherry. In some cases, a further financial award is justified but in others, the English court must be careful not to step on the toes of foreign courts by topping up awards as a result of legitimate differences between legal systems.”
The Supreme Court’s judgment is due in 2024.
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