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August 29, 2019updated 27 Aug 2019 2:48pm

From Russia (to the English Family Court) with Love

By Philippa Dolan

Philippa Dolan, a partner in the Family Team at Collyer Bristow LLP, explains why Vladimir Potanin and his divorce proceedings might see the biggest award ever made by the English Family Court.

Vladimir and Natalia Potanin were a very wealthy Russian couple. Vladimir founded Norilsk Nickel and is reputed to be the second richest man in Russia.

In 2013 he announced to Natalia, apparently out of the blue, that their thirty year marriage was over. A new woman was on the scene and Vladimir married her the following year.

Vladimir cited the date when their relationship ended as 16 January 2007 because, he claimed, that was when he felt the relationship was not working for him. Apparently, he failed to share this important information with Natalia until the divorce proceedings began some six years later. And, coincidentally, this retrospective chronology upheld by the Court in Moscow just happened to have a significant effect on the calculation of his personal wealth at the point of separation.

In the year 2007, Vladimir and his former business partner Mikhail Prokhorov, divided their business interests. There were also a number of opaque business structures in the mix. Natalia fought the case but lost with the outcome that Vladimir did not have to pay her very much at all, certainly nothing like the £5 billion that she is reportedly seeking to claim in the Family Court in London.

The Family Court in London is famous for its welcoming approach to foreign couples wanting British judges’ expertise on how to divide their wealth on divorce, especially the wives of rich men. It’s true that, compared to other jurisdictions, the UK has a more generous approach to the non-earning spouse that they may expect elsewhere. Ever since 2000 and the seminal case of Mr. and Mrs. White, the Court’s approach has been that the homemaker has made an equal contribution to that of her husband who’s built up a successful business.

Inevitably there’s quite a lot of satellite litigation concerning the English Court’s jurisdiction to decide these cases. Husbands deny that their wives’ part-time occupation of the Kensington penthouse could amount to them actually living in London whilst the wives are adamant that they’re absolutely part of the local community.

None of this helps Natalia Potanina however, because she and Vladimir were living in Moscow at the time Vladimir began the divorce proceedings. But Natalia moved to London in 2014 and is now asking for the Court’s help under the provisions of Part III of the Matrimonial and Family Proceedings Act 1984. This legislation is available for spouses who are living in England and Wales, but whose divorce proceedings were determined elsewhere, and their financial claims having been dealt with either inadequately or not at all.

The Court does not interfere lightly in decisions made in other jurisdictions but judges in England and Wales still retain quite a protective approach to the financially weaker spouse, and their children, particularly where there’s financial hardship.

In order to bring proceedings under Part III, the first step is to make an application for permission. The Court will only give permission where it considers that there are “substantial” grounds for doing so. The Applicant must show a strong connection with this jurisdiction, and the application must have real merit and not be simply an attempt to cherry pick where the best settlement deal may be found. Delay can be fatal. The Court has to consider all the circumstances of the case and, if persuaded, will apply the same criteria as it would in a domestic divorce case.

So, given the alleged extent of Vladimir’s assets and the lifestyle the family had previously enjoyed in Russia, we could be about to see the biggest award ever made by the UK’s Family Court…

Philippa Dolan is a partner in the Family Team at Collyer Bristow LLP

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