Today the Supreme Court handed down its judgment in the case of Potanin v Potanina. The Supreme Court found in Mr Potanin’s favour by a narrow 3-2 majority that the procedure for financial claims after a foreign divorce, which has been used for the past 12 years, was in fact wrong.
Acting for Mrs Potanina, Frances Hughes, partner at Hughes Fowler Carruthers, commented:
“Mrs Potanina is delighted that this decision means that the Court of Appeal will now focus on the merits of her case rather than on procedure. Mr Potanin had applied to have Mrs Potanina’s application dismissed but failed and instead the Supreme Court has directed that the issue be dealt with by the Court of Appeal.
“The Supreme Court described Mr Potanin as ‘one of the richest men in the world’.
“In giving their judgment on the procedure, no criticism was made of Mrs Potanina, who has followed the rules of the court and standard court practice endorsed by the Supreme Court and the Court of Appeal for the last 12 years. The Supreme Court has now decided that this standard practice was wrong and that future applications should follow a different procedure. The Supreme Court has not in any way dealt with the merits of Mrs Potanina’s case and this has now been remitted to the Court of Appeal and will likely be heard during 2024.”
The parties met and began their relationship in high school in Russia before marrying in 1983. During the marriage and following the fall of the Soviet Union Mr Potanin amassed a large fortune which is now estimated to amount to $20 billion. Almost all of the assets were held through companies and other business entities where Mr Potanin was not registered as the legal owner but was the beneficial owner. When the parties divorced in Russia in 2014 the Russian court did not consider these assets when dividing the family’s wealth and as a result Mrs Potanina received less than 1% of the wealth which had been built up during their long marriage from which they now have three adult children.
In 2019, Mrs Potanina applied for permission to apply for more money pursuant to Part III Matrimonial and Family Proceedings Act 1984. The judge at first instance initially granted the permission at a “without notice” hearing. This was in accordance with the standard practice for Part III at the time which required such applications to be made without the other party being present. Mr Potanin then applied to “set aside” the permission and at a subsequent hearing this application was granted. Mrs Potanina then appealed that decision and the Court of Appeal agreed with her that the judge had been wrong to “set aside” the grant of permission. Mr Potanin then appealed to the Supreme Court.
The Supreme Court has now allowed Mr Potanin’s appeal on the basis that it considers the law does not require a compelling reason for setting aside a grant of permission, notwithstanding that this has been the standard practice adopted by the courts and endorsed by the Supreme Court in a previous decision.
Mr Potanin also argued that the Supreme Court should dismiss Mrs Potanina’s case in its entirety. Mrs Potanina argued that the Court of Appeal had not yet considered her substantive case and had only considered the procedural issue. The Supreme Court agreed with her approach to this point and has, accordingly, remitted to the Court of Appeal the question of whether the judge at first instance had been wrong to not grant her leave to proceed with her application and consider the implications of the EU Maintenance Regulation on her claim.
Although a date has not yet been fixed it is likely that the case will come before the Court of Appeal during the course of 2024.
Read the full judgment here.