Unfair Post-Nuptial Agreement Set Aside by Court

June 19, 2012

Unfair Post-Nuptial Agreement Set Aside by Court

A Russian ‘serial non-discloser’ of assets said to be worth millions of pounds had his attempt to bind his ex-wife to the terms of their post-nuptial agreement dashed recently in the family court.

The agreement was entered into in Israel after ten years of marriage. Mr Justice Mostyn ruled that although the man’s ex-wife would have understood the agreement in a literal sense, she would not have understood the rights she was thereby giving up under English law. The agreement, therefore, was grossly unfair and was set aside by the court.

Instead of the $1 million specified in the agreement, the ex-wife was awarded £12.5 million to meet her reasonable needs and those of the couple’s children.

However, the practical issue for the woman will be locating and obtaining her ex-husband’s assets. He denies having significant wealth, claims to face litigation to settle a $10 million debt and appears to have placed his assets in offshore trusts.

British courts will not enforce agreements that are, on the face of them, grossly unfair. A pre-nuptial or post-nuptial agreement which is reasonably fair and which is entered into by both parties freely and with the benefit of professional advice is likely to be upheld by the court. This was not such an agreement, however.