News

The recent Court of Appeal decision in Potanina v Potanin [2025] EWCA Civ 1136 marks a significant development in international family law, particularly for individuals seeking financial relief in England and Wales following a foreign divorce. The most recent judgment has opened the door far wider than before, for overseas spouses to pursue claims through the English courts even years after their divorce has been finalised abroad. The Financial Times even released an article following the Court of Appeal decision, titled “Welcome to London, the divorce capital of the world”. So what is this case all about, and why has it got everyone talking?

The Background

Natalia Potanina and Vladimir Potanin, both Russian nationals, divorced in Russia in 2014 after a 30-year marriage. Mr Potanin was estimated to be worth around $20 billion, much of which was held through complex trust and corporate structures. The Russian court awarded Mrs Potanina, what was described as a “tiny fraction” of the marital wealth, focusing solely on assets held in the parties’ names and excluding those held beneficially by Mr Potanin through corporate and trust structures.

Following her relocation to England, Mrs Potanina sought leave to apply for financial relief under Part III of the Matrimonial and Family Proceedings Act 1984, which allows the English courts to intervene where a foreign divorce has resulted in inadequate financial provision of one of the parties.

After years of litigation, including an appeal to the Supreme Court, the Court of Appeal has now unanimously granted Mrs Potanina leave to proceed with her claim in England, recognising the stark disparity between the Russian award and what she might have received under English law.

Why This Decision is Important

This case reinforces the principle that English courts can provide a second opportunity for financial justice, even long after a foreign divorce. The Court of Appeal confirmed several key points:

·
Grounds for Application;

Mrs Potanina’s Russian settlement of only $40 million out of an estimated $20 billion was deemed inadequate and therefore supported her claim for further relief. The court ruled that a significant disparity between the financial award granted in foreign proceedings and what would be expected under English law can constitute a substantial ground for an application under Part III.

·
Connection to England;

The Court found that Mrs Potanina’s connection to England was sufficient to justify jurisdiction. She had obtained a UK investor visa in 2014, purchased property in London, and had been habitually resident in England since at least October 2018. The Court emphasised that habitual residence is assessed at the time of the leave hearing, and clarified that Part III does not require a “substantial” connection, only a meaningful one that reflects the applicant’s current ties to England. It should be noted that Mrs Potanina was also shown to have almost entirely severed her ties to Russia.

·
Threshold for Permission;

The Court of Appeal reiterated that in relation to the threshold for granting leave to apply under Part III, “substantial ground” means a “solid” one, namely that the court must be satisfied that the application is not wholly without merit or abusive. It was elaborated that the closest comparable standard is a “real prospect of success,” though this is a lower threshold than showing a “good arguable case.”

What this means for High Net Worth Clients

Potanina v Potanin has the potential to be a watershed moment for international couples, particularly those with complex asset structures who have divorced in jurisdictions with limited financial disclosure or provision. It highlights the potential vulnerability of wealthy spouses to post-divorce claims in England and the opportunity for financially weaker spouses to seek redress.

This case underscores the importance of:

1. Robust pre- and post-nuptial agreements that are compliant with English law. A properly drafted agreement can (i) ring-fence certain assets or limit claims, (ii) specify choice of law and jurisdiction, and (iii) set parameters for fairness or claims in the event of breakdown. Given the Court of Appeal’s willingness to entertain a claim by Mrs Potanina, the protective role of nuptial agreements becomes more significant, as they may tip the balance in the leave/permission stage, or provide a contractual fallback or “safe harbour”.

2. Strategic asset planning, especially where trusts and offshore structures are involved. This case is a further example of where the English courts may look behind complex wealth planning structures to ascertain the true beneficial ownership. Therefore, any asset planning must be married with foresight, clear documentation, and an awareness of family law risks.

3. Seeking early legal advice from family lawyers in any jurisdiction that either spouse has or may have a connection with. Doing so allows both parties to evaluate and possibly pre-empt claims like a later Part III application and therefore forego the lengthy and costly litigation proceedings, as can be exemplified by this case’s seven-year saga.

Need Advice?

If you require any assistance or advice to challenge an unfair foreign settlement or protect your assets from future claims, please contact our family law team who would be more than happy to help.