Many of our clients – or their spouses – have assets located outside the UK such as overseas bank accounts or foreign holiday homes. Sometimes overseas assets are less tangible – offshore trusts for example, or matrimonial property that’s legally owned through some kind of overseas corporate vehicle. As we’ll see below, foreign assets can introduce an element of uncertainty to divorce settlements in terms of identification, valuation and enforcement of the financial order itself.
The high profile 2021 case of Akhmedova v Akhmedov demonstrated some of these complexities – albeit in a case where the spouses were extraordinarily wealthy. At the same time the case showed how English judges can be flexible when it comes to securing overseas assets to satisfy the financial order. If overseas assets are likely to form part of your financial settlement, it’s crucial to seek legal advice from specialist international divorce solicitors at an early stage to ensure the assets are located and secured. This maximises the chances that these assets will be available for division when a settlement is agreed or ordered by a court.
How Do I Ensure My Financial Settlement Includes Foreign Assets?
First establish if the assets have been disclosed. Both parties in an English divorce must make full and frank disclosure of their assets, including overseas assets and income. Disclosure is made on Form E. If you suspect your spouse has not listed some overseas assets your legal team can take advantage of the extensive judicial powers of family court judges to order disclosure and freeze assets that are disputed.
If the court is satisfied that the foreign property is matrimonial property that should be incorporated into your settlement and a professional valuation has been carried out it can order the transfer of the asset into your name as part of your settlement. However different rules apply to transfers depending on the type of asset being transferred. For example different rules apply on property transfer compared to transferral of a share of a pension.
What Happens If My Spouse Refuses To Follow The Court’s Order To Transfer Foreign Assets?
If your spouse fails to respect the court order regarding transfer of foreign assets you may have to issue enforcement proceedings in the country where the assets are located. At Brookman we have many decades of experience dealing with situations where a spouse refuses to comply with a court order to transfer foreign assets. While issuing proceedings is not ideal given the expense and time associated with any type of court case, it’s often a necessary step to ensure you secure the settlement you have been awarded in full.
The approach we take will very much depend on the country in which the assets are situated. Commonwealth countries and the US have agreements in place with the UK to ensure financial orders made in the UK can be swiftly enforced and assets secured.
Enforcement Of Financial Orders In The EU After Brexit
The situation regarding enforcement of financial orders and asset transfer in the EU altered after Brexit. Enforcement Orders relating to foreign property resulting from divorce proceedings that started in 2021 (i.e. after the Brexit transition period) will be governed by the laws of the relevant EU country. And because not all EU states have specific laws around recognition of non-EU court orders the enforcement process can be complicated. It’s why – in the absence of any EU/UK agreement on enforcement – early, specialist advice is essential on the laws applicable in the EU county in which assets are located. If necessary we can liaise with local lawyers in the EU to ensure you adopt the most effective approach to enforcement.
Enforcement In The Akhmedova v Akhmedov Case
The Akhmedova divorce in 2021 was widely reported – largely because of the enormous sums of money involved and the acrimonious nature of the split. But the case also involved the issue we’ve been discussing – enforcement of English court orders relating to foreign assets.
By way of background Mr Akhmedov was ordered to pay Ms Akhmedova almost half a billion pounds – believed to be the largest ever award in English divorce proceedings. Despite a worldwide freezing order and an order for the husband to transfer certain property Ms Akhmedova encountered extreme difficulty in enforcing the order and securing the property she had been awarded.
The precise procedural details of the case need not concern us but what is important from an enforcement perspective is that the English High Court was able to look behind complex corporate structures to achieve a fair result. Specifically it was able decree that in spite of the corporate vehicles put in place by Mr Akhmedov the assets in dispute were in fact beneficially owned by him.
The decision shows how the courts can be flexible and practical when it comes to securing worldwide assets. The ruling will, we believe, only make English courts more attractive to the financially weaker spouse in a divorce than they are already.
At Brookman we have extensive experience in dealing with all aspects of securing foreign assets and enforcing financial settlements at home and abroad. To discuss how we can assist you please call us on 44 (0) 20 7430 8470 or contact us online. We provide a free, initial consultation.