Claims for Financial Relief in England After a UAE Divorce

International families often hold assets located in multiple jurisdictions and have the option to bring divorce and financial remedy proceedings in a number of different jurisdictions. England has long been recognised as a more generous divorce jurisdiction for the financially weaker spouse (generally speaking, wives) and the concept of ‘forum shopping’ or ‘divorce tourism’ has developed (where a spouse actively tries to secure the jurisdiction of the Courts of England and Wales and even races to do so).

The non-Muslim Family Court in Abu Dhabi was established in December 2021 and offers a viable option for non-Muslim expatriates living in the UAE to get divorced. This was recognised by the English court in the case of SA v FA [2022] EWFC 115 where the court granted a stay of the proceedings in England, and said that the UAE court was the ‘natural forum’ to hear the parties’ divorce and financial matters.

Notwithstanding the recent law reforms in the UAE which have closer aligned family law in the UAE with the law in England and Wales (particularly the introduction of no fault divorce), for those living in the UAE, who may choose to divorce there, there is also the safety net of being able to apply for financial relief after a foreign divorce under Part III of the Matrimonial and Family Proceedings Act 1984 (“Part III MFPA”) if certain criteria are met and the award made (in the UAE) was genuinely inadequate or unfair.

Understanding Financial Claims Under Part III MFPA

The aim of the legislation is not to afford an unhappy spouse a second bite of the cherry when it comes to the financial resolution on a divorce, but to protect a spouse for whom little, inadequate or no financial provision had been made on a foreign divorce – i.e. to remedy an unfair hardship situation.

In the case of Agbaje v Agbaje [2010] UKSC 13 the Supreme Court said the purpose of the legislation was to prevent real hardship and a serious injustice. In these circumstances, it might be appropriate for an order to be made by the English court, as it was for Mrs Agbaje following divorce proceedings in Nigeria (which had made inadequate financial provision for her).

Criteria for Making Financial Claims Under Part III MFPA

The first step is to secure jurisdiction to bring a Part III MFPA claim. Pursuant to section 15 of the MFPA, the applicant has to show that, on the date of making the application, either party:

• is domiciled in England and Wales (or was domiciled on the date on which the divorce obtained overseas took effect);
• has been habitually resident in England and Wales throughout one year ending with the date of the application (or was resident throughout the period of one year ending with the date on which the divorce obtained overseas took effect); or
• has a beneficial interest in possession in a dwelling house in England or Wales which at some point during the marriage was the matrimonial home.

The most commonly relied on criteria are domicile or habitual residence, although in the case of Aldoukhi v Abdullah [2021] EWHC 3086 (Fam) (which was the first reported case relying on this ground) the applicant wife relied solely on the criteria that she had an interest in a matrimonial home in England. In this case the parties had divorced in Kuwait in 2019 and the wife’s total capital award was £14,400 – hence she applied under Part III MFPA for additional financial provision given that the parties owned several properties in England.

A crucial point to note when relying on the matrimonial home criteria is that the court cannot make any order for maintenance and must not make a capital order which exceeds the value of the matrimonial home.  There are no such restrictions if the domicile or habitual residence criteria are relied on, and claims can run into the hundreds of millions of pounds.

Two-Stage Process for Part III Claims After a Divorce Abroad

There is a two step process when making an application:

Step 1 – the applicant makes an application for permission to bring the claim – the applicant needs a ‘substantial ground’ to bring the application.

Step 2 – the substantive application – this will initiate financial remedy proceedings and the court will have to decide whether to make any order at all.

The court has to consider all of the circumstances of the case, but also specific factors set out in section 16 MFPA which include the parties’ connection with England and Wales as well as with the country where the divorce took place; any financial benefit the application has received or is likely to receive; the enforceability of orders; and the length of time that has passed since the divorce.

Set Aside Applications

In proceedings under Part III MFPA it is often the case that, following a grant of permission, the other side applies for this to be set aside. This issue recently came before the Supreme Court in the case of Potanina v Potanin [2024] UKSC 3, following the divorce in 2014 and years of litigation in Russia and then in England.

The wife was initially granted permission which was successfully appealed by the husband. The wife then successfully appealed to the Court of Appeal who had held that the husband could not establish a ‘knock-out blow’ in order to set aside the wife’s grant of permission (which thus remained granted) and so the husband appealed to the Supreme Court.

The Supreme Court allowed the husband’s appeal and held that the appropriate test to apply when considering permission to bring an application is whether there is ‘a real prospect of success’:

“…the judge will need to consider whether, on the factual basis alleged unless it is clearly without substance, there is a substantial (in the sense of solid) basis for saying that in all the circumstances of the case, and having regard in particular to the matters specified in section 16(2), it would be appropriate for an order for financial relief to be made by a court in England and Wales.”

The Supreme Court also said that the ‘knock-out blow’ test on a set aside application (which had arisen in case law and was applied by the Court of Appeal) was not the correct approach:

“… Nor do the rules say or imply that the court may not set aside the order unless the applicant can deliver a ‘knock-out blow’ to this effect. There is no justification, either as a matter of language or otherwise, for reading such restrictions into the rules.”

This case is important as the law prior to this had established that the applicant on a set aside application would have to show a ‘knock-out blow’ to be successful in setting aside the grant of permission. However, the Supreme Court concluded that the onus is very much on the applicant (when seeking permission) to show they have a ‘substantial ground’ for bringing the application.  

Financial Claims in the UK after a Divorce in the UAE

The non-Muslim Family Court was established in Abu Dhabi in December 2021. In the above mentioned case of SA v FA [2022] EWFC 115, the judge found ‘the overall scheme suggested by the statutory code does seem broadly commensurate with the courts in England and other non-Muslim countries’ and made the following comments in paragraph 24 of his judgment:

“It seems to me that the new court has been set up with a view to giving assurance to non-Muslims living in the UAE… I have no reason not to assume that any judge of the new court, whatever his faith, would deal with any case according to the statutory principles which have been summarised above. Of course, the financial remedies' systems in non-Muslim countries widely differ (for example the system in France is very different from that in England) and it would be wrong for me to conclude that only the English system gives 'substantial justice'.”

There are certain aspects of the procedure that differ to the system in England and Wales – for example it is only wives who can apply for alimony (maintenance). Counsel for the wife argued that the wife may suffer a real injustice if the court in Abu Dhabi were to deal with financial matters on a divorce and said that the Abu Dhabi court was ‘embryonic’ and may not give substantial justice. However, because of the existence of Part III MFPA, the judge felt there was a clear answer “in the event that the wife… receives an award in the UAE which falls well short of what an English court would regard as fair, and the wife is suffering hardship as a result, she should have available to her the 'safety net' of an application under Matrimonial and Family Proceedings Act 1984, Part III.”

Pensions and Financial Claims After a Foreign Divorce

An order made in respect of the sharing of a pension on a foreign divorce will have no validity/enforceability over an English pension arrangement. It would therefore be necessary to seek an English pension sharing order for the intended sharing of the pension to be effective.

This can be achieved by using Part III MFPA to seek an order by consent (particularly if the parties are simply seeing this as part of the implementation of the financial arrangements ordered pursuant to their divorce).  

Conclusion

It is anticipated that the number of Part III claims will increase due to the increasing globalisation of families and modern ways of living – families emigrating or moving abroad for their children’s schooling or otherwise – which creates ‘options’ in terms of the potential jurisdiction for a divorce. This sort of litigation can be very lengthy and costly, but can make a huge financial difference to divorcing spouses.