Abramo-Which? – Forum Shopping and Jurisdiction Issues30 Aug 2017
It is no surprise the tabloids have jumped on the news of Russian billionaire-businessman Roman Abramovich’s separation from his wife Dasha Zhukova. According to the press the parties combined assets equate to around £7 billion. This high-profile divorce is bound to continue attracting attention, but what are some of the key issues and how is it likely to play out?
What they will first need to consider is which jurisdiction their divorce should be heard. As Roman and Dasha are both Russian citizens they may be able to start divorce proceedings in Russia but if they are both “habitually resident” in England they will also have jurisdiction to petition for divorce in London. In addition to this they can also petition on the basis that the person petitioning for divorce has been habitually resident in England for at least one year prior to the petition being issued. If the person petitioning for divorce is an English national, they only need to have been habitually resident in England for 6 months prior to the petition being issued. Essentially you must be able to show that England is where you have established a permanent base. It is fact dependant.
They will each need to carefully consider the most suitable jurisdiction for them; this is known as “forum shopping”. It is often the case that one jurisdiction is more favourable to one party and another jurisdiction more favourable to the other party.
If both jurisdictions in question are within the EU then parties enter into what’s known as a “jurisdiction race” because EU member states have what is known as the “first past the post” rule (“lis pendens”). So the jurisdiction that the divorce petition is issued in first is generally the jurisdiction where the divorce will be heard. This is the case now however with Brexit looming this law may change in future.
The law is different if the other jurisdiction is outside the EU, such as Russia. The “first past the post” rule does not apply here instead the concept known “forum conveniens” applies. If there is a jurisdiction dispute then the court with jurisdiction may decide not to exercise its jurisdiction on the basis that it should be heard in a more appropriate jurisdiction. That court must be satisfied that, on the balance of fairness, it is more appropriate for the proceedings to proceed in the other jurisdiction. The test does not require the other jurisdiction to be “clearly” or “distinctly” more appropriate but it must show that it is more appropriate to some extent.
Another point worth noting is that even if a divorce takes place in one jurisdiction, it can still be possible for your financial claims to be dealt with by another jurisdiction. This point is outside the scope of this article.
So, England or Russia?
The likely settlement will be considerably different depending on which country the divorce will be heard. The biggest divorce settlement ever made by London Courts was the recent case 2016 of AAZ v BBZ with the wife receiving an award of £453.5m. Abramovich’s second divorce was heard in Russia which may be an indication that his third divorce will proceed in Russia. However, If Zhukova and Abramovich’s divorce proceeds in England, I predict that it will be the biggest divorce settlement yet.
However, before we get too excited we do not know whether or not they entered into a prenuptial agreement. Given Roman has already been through two divorces it would have been sensible for him to have entered into one with Dasha. If so, this will be have an effect on the division of the assets. Whether the prenuptial agreement is given weight will depend on a number of factors such as whether it was signed far enough in advance of the wedding, whether they exchanged full and frank financial disclosure, whether they both received independent legal advice, whether it is fair and whether there was duress or not. Either way, the London divorce courts should watch this space!
Claire Andrews, solicitor in the Family department at Osbornes is regularly instructed to assist clients in divorce. If you are getting divorced and would like expert advice, please contact Claire on ClaireAndrews@Osbornes.net or 020 7485 8811.