Can English Courts Change A Foreign Financial Order?

Date: July 2nd, 2019 - Written by: Brookman Solicitors

 

We’ve written extensively about forum shopping in these advice pages. In particular we’ve explained why the financially weaker spouse in a divorce will often try – where possible – to have financial proceedings decided by a judge in England and Wales. Different jurisdictions have different rules and priorities when it comes to division of assets on divorce. Rightly or wrongly, the courts here have traditionally been viewed as having greater flexibility and discretion than those in some other countries.

What happens then, when having failed to have a case heard in London, one spouse is unhappy with the way a foreign court has decided financial matters. Does he or she have any way of challenging that decision in the English courts?

 

Examining The Foreign Court’s Decision

Part III of the Matrimonial and Family Proceedings Act 1984 (‘MFPA’) is one way a foreign financial order can be examined by the courts here and alternative ways of dividing assets considered.

Although not used widely, the MFPA can be a highly effective tool for spouses unhappy with a foreign financial settlement. But only if the conditions for its use are satisfied. One recent case brought under the MFPA surprised some family lawyers because it showed the courts here are clearly willing to permit a closer examination of a foreign court’s financial order in the correct circumstances. The case, Vasilyeva v Shemyakin was one where at the outset the outcome of the MFPA application was in no way certain.

 

Getting Court’s Permission To Apply For A New Financial Order

Before making the application for a financial order the spouse seeking relief must first seek the permission or ‘leave’ of the court to do so. And the spouse will only clear this hurdle if the court is satisfied that he or she has ‘substantial grounds’ for making the application.

In the case we mentioned above – Vasilyeva v Shemyakin – the wife, Elena Vasilyeva asked the court’s permission to make an application for financial relief in England and Wales following a financial order made by a Russian family court following her divorce from her husband, Boris Shemyakin.

Under the Russian decision Ms Vasilyeva was due to receive a Moscow flat valued at £1million together with approximately £430,000 worth of shares. Her argument was that this was only a tiny fraction of the matrimonial wealth. Some reports have suggested the actual value of matrimonial assets was over £100 million.

In a forthright judgment Mr Justice Williams indicated that despite the best efforts of both the English and Russian lawyers involved in the case he had found it impossible to fully untangle the nature of the proceedings held in Russia. He had however been able to establish that:

  • Russian judges don’t have the same discretion to divide assets as those in England
  • The courts in Russia don’t always require full and frank disclosure of marital assets
  • Russian courts divide assets not values

So did the wife have the required substantial ground for making an application for financial relief? (The judge, referring back to earlier cases, confirmed that ‘substantial’ in this context meant ‘solid’.)

Having reviewed all the available information the judge decided to allow Ms Vasilyeva to proceed on to a full application for financial relief. He did so mindful of the fact that Mr Shemyakin had sought asylum in the UK and had lived in London for a number of years. In addition the marriage had been based here for the past two years. Mr Justice Williams also highlighted that the husband had failed to produce full documentary disclosure of his financial assets. Crucially the judge was unable to establish whether the Russian court order was in fact intended to be a full and final settlement of each side’s claims.

 

What Way Can English Court Change Foreign Order?

The impact of a successful application under MFPA can be significant. The courts have the power to make any of the orders it can make in a financial provision case originally heard in England and Wales. That’s to say it can make any order available under Part II of the Matrimonial Causes Act, 1973, including pension adjustment orders and orders for maintenance payments.

Where the application under the MFPA has been allowed only because a home is located in England and Wales there are certain limitations on the type of order the court can make.

 

Comment

Some lawyers have suggested that the decision in Vasilyeva indicates a willingness on the part of the English courts to intervene in foreign decisions. Some even argue that MFPA allows the English courts too much leeway to interfere in the judgments of foreign courts.

But we should be clear: Judges here won’t entertain a request to make an application under MFPA if it is undeserved. Particularly if it is made simply to take advantage of what many think is the generosity of English courts toward the financially weaker spouse. Nor will spouses be able to use the MFPA to have a so-called ‘second bite of the cherry’. A straightforward difference in a foreign award and one that a disgruntled spouse may achieve in England and Wales won’t be enough to clear the initial hurdle of seeking the court’s leave to make an application.

If you are considering making an application under the MFPA it’s essential to seek specialist advice early. Before undertaking a case like this your international divorce lawyer should examine carefully the nature of the foreign court’s decision – paying particular attention to the extent to which assets were disclosed to the foreign court and how the foreign judge divided them.

At Brookman we have an extensive network of legal specialists in jurisdictions around the world enabling us to carry out this task effectively. If you would like to discuss your case further please call us on 44 (0) 20 7430 8470 or contact us online.

 

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