Following their divorce in Saudi Arabia, Ms Christina Estrada, the wife of Saudi billionaire Dr Al-Juffali, secured a divorce settlement in the English courts totaling £75 million.
Ms Estrada, a US citizen who had lived in the UK for over 20 years, succeeded in obtaining one of the largest financial divorce settlements seen in England. Dr Al-Juffali had obtained a divorce in his home country of Saudi Arabia in 2014 under Islamic law, without Ms Estrada’s knowledge, after he had lawfully taken a second wife in 2012. Ms Estrada was not entitled to any financial provision upon the divorce in Saudi Arabia. She therefore applied to the English courts following the divorce to secure financial provision for herself and their teenage daughter. Dr Al-Juffali tried to stop the English court case from proceeding, by claiming diplomatic immunity, but was unsuccessful in his bid.
Whilst the astronomical amounts involved in this case have little in common with most divorce cases, it usefully publicises the ability of our courts to make a financial order following an overseas divorce if no, or no adequate, financial provision has been made in the foreign jurisdiction.
If there is an international element to a marriage it is not uncommon for consideration to be given as to which country should deal with the divorce and related financial matters. Rightly or wrongly the English legal system is viewed as the most generous to wives. Very often the country where one or other spouse first lodges a divorce petition is ‘seized’ and financial matters have to be dealt with in that country. Therefore one can often find oneself in a ‘jurisdictional race’ to start divorce proceedings in the country which is most favourable to your client. This is a complex area of law and one where it is essential to get specialist legal advice early on.
In certain circumstances the English courts are prepared to make an order in relation to the couple’s financial assets after a foreign divorce, annulment or judicial separation. The application is made under Part III of the Matrimonial and Family Proceedings Act 1984 (MFPA). The applicant must have a connection with England and the marriage and the overseas divorce must also be legally recognised by English law. If certain criteria are met, the English courts have a discretion to make the same orders as if the divorce had taken place here. However the English courts are clear that such provision does not allow a party a second bite of the cherry; they cannot obtain more than if all of the proceedings had taken place here originally.
Part III applications can be useful in a number of scenarios. For example it may be that the court in the country where the divorce has taken place cannot make orders in relation to assets which are in England such as property or pensions. Therefore, after a financial order has been made abroad, the English court could be asked to make another order dealing with the assets here. Further, unlike in some foreign jurisdictions, the English courts are willing to make financial orders in respect of assets located abroad (although enforcement of orders overseas is a different issue). In the Estrada case there was absolutely no financial provision made for her by the Saudi Arabian courts, let alone simply ‘inadequate’ provision, so the English court was willing to consider all of her potential claims.
In order to bring a Part III application after an overseas divorce, the applicant must show that:
- Either of the parties to the marriage was domiciled in England and Wales on the date of the application for permission to bring a Part III claim or on the date that the overseas divorce, annulment or legal separation took effect,
- Either of the parties to the marriage was habitually resident in England and Wales throughout the one year preceding the application for permission or throughout the one year preceding the date on which the overseas divorce, annulment or legal separation took effect,
- Either or both of the parties had, at the date of the application for permission, a beneficial interest in possession in a dwelling-house situated in England and Wales that was at some time during the marriage a matrimonial home of the parties.
There are exceptions to the rule, of particular note is that if another EU Member State has already made a financial order concerning maintenance then the courts in England may not be able to make a further order. This is a complex area of law and specialist advice should be sought. It is possible his will become more complex after Brexit.
Of further note is that if the only basis for bringing a claim in England is that there is a property here which was the matrimonial home then the English court can only make orders relating to the home or make a monetary payment up to the value of a party’s interest in that property. The court cannot make orders in relation to maintenance.
If the applicant has remarried they cannot apply to the English courts for financial provision. It does not matter if the respondent has remarried.
If the applicant can bring a Part III claim then the first step is to apply to the court for permission to make the application. Permission should be granted if an applicant can show that they have a ‘substantial ground’ for making the application. If the court is not satisfied that there is a ‘substantial ground’ then it will dismiss the application.
When deciding whether to grant permission the court will take into account the same factors that it would look at when making a decision at a final hearing. It will look at whether, in all the circumstances of the case, it would be appropriate for the English court to make an order bearing in mind the following factors which are set out in s16 of the MFPA 1984:
- the connection which the parties have with England and Wales, with the country in which the marriage was dissolved or annulled or in which they were legally separated, or with any other country;
- any financial benefit which the applicant or a child of the family has received, or is likely to receive, in a foreign country as a result of the divorce, annulment or legal separation;
- in a case where a financial order has already been made by a foreign court, the court will look at the details of that order and the extent to which it has been complied with or is likely to be complied with;
- any right which the applicant has, or has had, to apply for financial relief from the other party in a foreign country and, if the applicant has not pursued such an overseas claim, the reason for not doing so;
- the availability in England and Wales of any property in respect of which the courts could make an order;
- the extent to which any order made under Part III is likely to be enforceable;
- the length of time which has elapsed since the date of the divorce, annulment or legal separation.
If the court does grant permission for a Part III claim to proceed it can then consider an application by the applicant for an interim maintenance order, including provision for payment of the applicant’s legal fees. The applicant needs to show an ‘immediate need’ for maintenance. An interim maintenance order can only be made if the court has accepted jurisdiction on the basis of habitual residence or domicile; therefore not if jurisdiction is based solely on the former matrimonial home being in England.
In terms of the court procedure for dealing with the Part III claim, this will be the same as if the divorce had taken place in England (although, after granting permission, the court can limit the issues and claims that it is prepared to consider in the proceedings). The court will direct both parties to provide full and frank financial disclosure using a court form E and will list the case for a Directions Appointment. If the application cannot be settled by agreement the court can make a final decision at a contested hearing. When making a decision the court will consider all the circumstances of the case, in particular the factors set out in s16 MFPA, as well as the factors set out in s25 of the Matrimonial Causes Act 1973 which are considered in all financial remedy applications following a divorce in England.
Part III claims can be an invaluable, even essential, route to achieving a just outcome following an overseas divorce. Before embarking upon an application it is important to obtain specialist legal advice to ensure that that there are grounds for making the application and to assess the prospects of success.
If you have any queries in relation to the issues set out in this article please call 020 7631 4141 and ask for a member of our Family team.