A Russian woman has won a settlement of £53 million following divorce from her Russian husband. The case of M v M  EWHC 2534 (Fam) hit the headlines this week, with the settlement thought to be one of the highest ever awarded by the English Courts.
The couple, whose names have not been released, met when they were both working in a factory in Russia. Getting married in 1991 and having two children together, the couple moved to the UK in 2005.
During the course of their 17 year marriage, the husband’s investments paid off, and the couple became very wealthy, leading a ‘lavish lifestyle’ with many assets, including the £3.8 million home in central London where they lived.
The couple separated in 2008 and the wife filed for divorce in Russia, not realising she could do so within the UK. The wife later applied to have the financial proceedings following the case dealt with by the English Courts under part III of the Matrimonial and Family Proceedings Act 1984, which governs such applications after a divorce abroad. (Courts must have jurisdiction in order to be able to hear a case and thus dissolve a marriage. It is usually fairly easy to prove jurisdiction if the Country is where the one or both of the couple live habitually.)
The difficulties arose with regard to the division of marital assets as the majority were held by the husband in a variety of complex off-shore corporate structures. At a substantial cost, the wife managed to trace assets held both in commercial and domestic capacities in both England and Russia. The value of the assets she traced reached roughly £107 million, comprising 11 commercial properties in Russia and eight properties in England. The issue that arose was that a number of the assets, with the exception of the £14 million family home, were all held by the husband’s companies. This led to the necessity to determine whether the husband’s intention had been to retain the beneficial interest in the property (so that he would remain entitled to them personally) or whether the beneficial title did in fact belong to the company.
Throughout the proceedings the husband failed to engage with the process. He failed to disclose his assets, frequently breached Court Orders and he did not even attend the final hearing. His ‘appalling litigation conduct’ was heavily criticised by the Judge, Mrs Justice King, who stated that he had been in ‘contempt of Court many times over’. As a consequence of the husband’s poor conduct, the Court drew adverse inferences against him.
The wife successfully argued that the properties were held on resulting/constructive trust by the companies for the husband thus allowing him to retain the beneficial interest. Finding that the husband’s actions with regard to the properties were those of a beneficial owner, coupled with the fact that there was no evidence produced to contradict that, the Judge ordered a 50/50 split of the total assets, awarding the wife £53,531,168.
Mrs Justice King stated that:
‘I am satisfied that the husband and the husband alone made each and every decision in relation to the purchase and operation of the companies, and that the directors who from time to time were put in place, were acquiescent employees or family members who would have had neither the skill nor the knowledge to carry out any of the duties of a company director.’
If you are facing divorce or separation from your husband or wife and wish to obtain legal advice from an experienced divorce lawyer, our team of experts are on hand and would be happy to help. For more information on financial proceedings following divorce or international divorce, do not hesitate to contact us.
By Antonia Love, Divorce Solicitor
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