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A family feud like no other… or is it?

Former wife of a Russian oligarch returns to the UK courts in pursuit of a financial settlement of over £450million.

The world is watching as the former wife of a Russian oligarch returns to the UK courts this week, ironically at the start of a campaign led by family law organisation Resolution called ‘Good Divorce Week’, in the latest chapter of a saga spanning multiple legal jurisdictions.

Mrs Akhmedova was awarded a financial settlement of over £450million in 2016 following divorce proceedings in London. It was lauded as the highest award in UK legal history. But she, like others, has failed to receive the money to which the court has ordered she is entitled, despite multiple attempts to enforce the order in various jurisdictions around the world.

The family fortune is reported to consist of luxury mansions, a superyacht, helicopter and private jet, and an art collection including pieces by Andy Warhol and Damien Hirst. Yet Mrs Akhmedova has managed to secure just a few million pounds from her entitlement to date, and she accuses her ex-husband, Mr Akhmedov, and their adult son, Temur, of hiding assets to avoid payment.

She has brought litigation in Dubai and America, where a US court recently ordered household name, Google, to hand over personal emails between father and son, and she has also secured an order to raid her son’s prestigious Knightsbridge home to search for evidence.

She brought her son into the dispute last year when she accused him of helping her ex-husband to hide assets from her in order to avoid paying the court award. She alleges that her former husband transferred cash and assets to their son in order to avoid paying her the money.

What is the relevance to other divorces?

Some of the aspects of Mrs Akhmedova’s case are not limited to the divorces of ultra-wealthy parties. Here are some examples of issues which commonly arise.

Securing assets

If a party to a divorce becomes suspicious that the other party is planning to take steps to put resources beyond their reach, with a view to thwarting their financial claims, it is possible to make an urgent application to the court for a ‘freezing injunction’ to endeavour to preserve assets on a worldwide basis pending the outcome of the case. It is understood that Mrs Akhmedova’s son has been served with a worldwide freezing order preventing him from transferring funds or selling any assets.

If a client suspects activity of this kind, urgent steps and legal advice must be taken.

Third party involvement

In many cases, third parties own, or claim to own, resources which otherwise would be available to distribute between the parties to a divorce. In this case, Mrs Akhmedova has brought her son into the proceedings, alleging that he had received substantial financial sums and assets from his father in order to put them beyond his mother’s reach and in order to frustrate the enforcement of the divorce award.

On a divorce, the court can only make orders against the parties to the proceedings, usually limited to the spouses. However, in some circumstances, it is possible to join a third party into the proceedings, meaning that the third party is then bound by any decisions made by the court, and reducing the risk of further litigation on the same issues elsewhere. It enables the court to determine the extent of any rights asserted by the third party.

Examples of this situation include:

  • A wife claims that a house owned by her husband's brother is held on trust for her husband
  • A wife's parents claim that they have a beneficial interest in the family home owned in joint names by the wife and husband
  • A husband claims that his wife's parents hold a property on trust for her
  • A father-in-law claims that he is the beneficial owner of shares in a family company held in the name of the husband
  • A former business associate asserts that he is the beneficial owner of an investment property held by the parties

In all these situations, early legal advice and action can make a significant difference to an outcome of a case. Failure to involve a third party, or alternatively, joining a third party in circumstances where the outcome has limited prospects of success, can have a massive impact on a case, including orders for costs made if a party has ‘got it wrong’ and taken, or failed to take, the right steps at the outset.

Enforcement

The English family court has wide ranging powers when dealing with non-compliance with orders including:

  • Imprisonment
  • Seizing and selling a debtor’s goods
  • Obtaining a charging order over property or shares owned by the debtor
  • Making a third party debt order, which is where the court directs a person who owes money to a debtor to pay it directly to a creditor. This can be used to direct a bank to pay the contents of a bank account in the sole name of a debtor to the creditor
  • Making an Attachment of Earnings Order, in which income from employment or a pension is paid directly to the creditor

The family court treats breaches of orders extremely seriously and will not hesitate to apply serious remedies to ensure an order is put into full effect. However, as Mrs Akhmedova is finding out, this can be difficult if there is disputed ownership of assets and multiple legal jurisdictions are involved.

It is critical at the start of a case to assess the prospects of actually securing the award being sought, otherwise a party risks securing only a pyric victory.

If you are experiencing difficulties with the implementation of an order made by the family court, contact our family team for a free 30 minute consultation to discuss your case.

 

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