Natalia_Potanina

The Potanina divorce: the highest-value divorce case in English legal history?

The Potanina divorce highlights the issue that those who have divorced abroad can apply to get a better settlement in England. Partner Fiona Wood explains.

Last week the Court of Appeal overturned a decision of the High Court, therefore allowing Natalia Potanina to bring her divorce claim in England. Her husband, Vladimir Potanin is stated to be worth $20 billion and to have a controlling stake in Nornickel, one of the world’s largest producers of nickel and palladium.

Divorce in Russia

The couple married in Russia in 1983 and lived there for most of their marriage. They divorced in Russia in 2014. Natalia received a divorce settlement of $41.5 million from the Russian court but says that she should have received a far greater share of her husband’s fortune. She informed the English High Court that she had “made exhaustive efforts to obtain justice in Russia” but that the sum she was awarded “does not even begin to meet my reasonable needs”.

English law

Couples who have links to the UK but who have divorced overseas and believe they have been treated unfairly can apply for permission to bring their case to be heard by the English courts under Part III of the Matrimonial and Family Proceedings Act 1984. English law is far more generous to the financially weaker spouse, usually the wife, than the law of many other countries, making such an application an attractive option.

Divorce tourism

Natalia has had a house in England since late 2014. Her attempt to bring proceedings in the English courts was blocked by the High Court in 2019 on the basis that the couple had little connection with Britain. A judge said that if her claim went ahead “there is effectively no limit to divorce tourism”.

Court of Appeal

However, last week the Court of Appeal reversed that decision and granted Natalia permission to bring her case in the High Court in London. Lady Justice Eleanor King in her ruling last week noted that the 1984 Act was not just designed for families with “massive or even substantial wealth” to bring cases. She went on to say “No doubt to most people, whether affluent or poor, the sums received by the wife made her a rich woman. Everything is, however, relative. The wife’s settlement represents only a tiny proportion of the vast wealth of this family, all of which has been accumulated during this very long marriage”.

It is not yet known if Vladimir Potanina will appeal this decision to the Supreme Court. Also, if the High Court does adjudicate on their divorce settlement, we do not yet know how generous they will be. However, this case does highlight the fact that those who receive divorce settlements abroad can potentially have a second bite at the cherry and try to obtain a second divorce settlement in England if they have links here.  Furthermore, now that we are no longer part of the EU this claim is also now potentially available to EU nationals.

Enforcing English divorce orders against assets in other countries

It is, however, worth noting that obtaining a second divorce settlement in England can be a pyrrhic victory if the majority of the husband’s assets are outside of the UK. Enforcing English divorce orders against assets in other countries can be extremely difficult. Despite this, I am sure that there are many wealthy ex-wives around the world watching very closely what happens in the Potanina case.

 

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