Blow for divorce tourists as Russian oligarch’s wife’s financial claims thrown out
Divorce tourism is not always successful as the recent decision in Potanin v Potanina shows.
London is known as the ‘divorce capital of the world’ due to the perception that the economically weaker party – usually the wife – will receive a more generous settlement than in other jurisdictions. For this reason, many people will go to great lengths to attempt to persuade the English courts that their marital finances should be dealt with in this jurisdiction. This is not always successful however as the recent decision in Potanin v Potanina shows.
The parties are of Russian nationality and lived in Russia for the entirety of their 30-year marriage. The husband became fantastically wealthy in the 1990s and has an estimated fortune of around $20bn. Divorce proceedings began in Russia in 2014 and the wife was awarded around $40m as her share of the matrimonial assets.
The wife brought proceedings in England under Part III Matrimonial and Family Proceedings Act 1984 (“Part III”). This allows people who have divorced in another jurisdiction but can show that they have been resident in England or Wales for at least a year to bring a financial claim against their ex-spouse on the basis that they have no received no financial provision or inadequate financial provision in the foreign jurisdiction. The wife in Potanin contended that her provision was inadequate as she had received just 0.3% of the parties’ wealth.
A claim under Part III requires the permission of the court, with permission to be granted or refused on the basis of a number of factors including there being a "substantial" ground for making the application and the party’s connection with England and Wales. At a without notice hearing at which the husband was not present or represented, the court granted permission, finding that there was sufficient connection with the jurisdiction on the basis of the wife’s evidence that she had purchased a home in London in 2014, had lived there permanently since 2017 and now considered London to be her home.
The husband successfully applied to set aside the order granting permission. The wife was criticised for providing incorrect information at the without notice hearing, having given the court a misleading impression of the Russian divorce proceedings, as to the amount of money she had actually received and, crucially, in relation to her connection to England.
Finding for the husband, Mr Justice Cohen found this was “a classic example of a spouse whose background and married life was firmly fixed in her home country and who had no connection with England […] seeking after the breakdown of the marriage to take advantage of what is a more generous approach to her claims than she has been able to achieve in her home country […] if this claim is allowed to proceed then there is effectively no limit to divorce tourism.”
Part III proceedings exist to ensure that a party with a genuine connection to this jurisdiction is not left in a position of need following an overseas divorce – it does not exist to enable an unhappy overseas litigant to have a second bite of the cherry. The judgment in Potanin provides a restatement of this principle and should serve as a warning to any potential divorce tourists. However, it is important to note that this may not be the last word on the matter as the wife indicated that she would seek permission to appeal the decision and any further judgments in this matter will be eagerly awaited.