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Sanctioned Russian tycoon Vladimir Potanin is set to make a legal challenge in the UK Supreme Court next week over a $6bn marital settlement sought by his ex-wife, cementing London’s reputation as the “divorce capital” of the world.
Potanin is appealing against a court ruling that gave permission for his former wife Natalia Potanina to bring her claim in England, which could become one of the biggest settlement cases recorded in the country.
The appeal brought by Potanin, who was sanctioned by the British government in 2022 because of his support for the Kremlin after Russian president Vladimir Putin’s invasion of Ukraine, is due to begin on October 31.
London has been dubbed the “divorce capital of the world” because of the perceived generosity of England’s courts in awarding huge financial settlements to financially weaker spouses, usually ex-wives.
The ruling is expected to have significant ramifications for other cases, particularly in relation to whether ex-partners can turn to the English courts to obtain a more favourable payouts.
Potanina was initially awarded roughly $41.5mn in 2014 by Russia’s courts but has claimed she is entitled to a far larger share of her husband’s fortune.
Potanina, who is Russian but has had a home in England since late 2014, is now seeking half of the assets beneficially owned by her former husband. The case has prompted what one recent Court of Appeal ruling described as a “blizzard of litigation”.
In 2019, Potanina turned to the High Court in London, citing Part III of the Matrimonial and Family Proceedings Act 1984, legislation that gives the English courts the power to make financial orders if a marriage has been annulled outside the UK.
She alleged in proceedings at the High Court that she had “made exhaustive efforts to obtain justice in Russia” but that the sum awarded in Moscow “does not even begin to meet my reasonable needs”.
Her attempt to bring a claim in England was initially blocked by the High Court in 2019 on the grounds that the couple had little connection with Britain.
In the 2019 ruling, Mr Justice Jonathan Cohen said that if her claim went ahead, “there is effectively no limit to divorce tourism”. However, the Court of Appeal reversed the decision in 2021 paving the way for Potanina to bring the action in England.
Potanin is seeking to overturn that Court of Appeal ruling at the Supreme Court in a two-day hearing this month. If he loses the appeal, the battle is expected to move to the family courts.
Potanin was in June 2022 sanctioned by the government, which said the tycoon had continued to amass wealth through the acquisition of Russian bank Rosbank and shares in Tinkoff Bank since Putin’s invasion of Ukraine.
The couple married in 1983 in Russia. In the 1990s Potanin had a reputed $20bn fortune, including shares in companies or other business entities that were not registered in his name though Potanin was their beneficial owner, according to information contained in a 2021 Court of Appeal ruling.
Potanina is represented by law firm Hughes Fowler Carruthers who declined to comment.
Law firms can accept payment of legal fees by sanctioned Russian clients if they obtain a special government licence from the Office of Financial Sanctions Implementation, which is part of Treasury.
