Potanin — Supreme Court hears important case on financial settlements following overseas divorce

The most senior court in England Wales has today been considering the case of Potanina and Potanin in relation to an application for financial relief made by the wife under Part III of the Matrimonial and Family Proceedings Act 1984.

Here, Legal Director and family law expert Amy Harris explains the case’s importance for future financial relief applications following an overseas divorce.

Financial relief — when should Part III applications be permitted?

The Supreme Court has been asked to determine whether the Family Court should have granted the wife permission to apply for financial relief under Part III. It must now consider when it’s appropriate for the court in England and Wales to grant permission for a former spouse to make an application under Part III following an overseas divorce.

Potanina vs Potanin

The couple in question — who are both Russian nationals — married in Russia in 1983 and lived in Russia throughout their marriage with their children before divorcing (again in Russia) in 2014.

The financial side of the couple’s divorce was complex, as the husband’s wealth — mainly accrued from shares in companies or other business entities — was estimated to be worth $20bn.

Litigation connected to the couple’s divorce took place in Russia and various other countries that the couple were connected to. The wife’s position was that she was entitled to half of the assets owned by the husband. However, she was unsuccessful in achieving this.

Application to the High Court

In 2019, the wife made an application for permission to the High Court in England and Wales to proceed with an application for financial relief under Part III.

The wife was initially granted permission to proceed with her application at a hearing where the husband wasn’t represented (known as a ‘without notice’ hearing). Upon considering the position, the husband decided to appeal this decision, as he felt (among other things) that the court had been misled by the wife.

Mr Justice Cohen — who initially granted permission — allowed the husband’s appeal and surmised that that there had been various misrepresentations made to the court by the wife.

In considering those misrepresentations, the Judge assessed that — had he been aware of various matters at the time of the initial hearing — he wouldn’t have granted the wife permission to proceed with her application.

The Court of Appeal

The wife subsequently turned to the Court of Appeal, which granted her appeal in May 2021.

The appeal considered the fact that the initial hearing for permission had been dealt with ‘without notice’ to the husband and that Mr Justice Cohen had determined that if the hearing had been ‘on notice’ to the husband, permission may not have been granted at all based on his submissions.

The Court of Appeal acknowledged that the Judge would have refused permission if the application had been ‘on notice’, however that was said to be “not the issue on appeal”. Lady Justice King determined that the “alleged defects” could not justify the order, granting the wife leave to proceed with her application under Part III.

Family lawyers need greater clarity

The Supreme Court has now been asked to determine whether the wife should have been granted permission to apply to court for financial relief at all.

Family lawyers who advise international couples hope that the Supreme Court will provide greater clarity on the legal position in England and Wales in respect of applications to grant permission for a former spouse to proceed with an application under Part III following an overseas divorce.

If you need guidance on Part III cases involving financial provision following an overseas divorce, talk to our award-winning family law team.