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11 JUL 2016

Roberts J awards American wife £62.3m following Saudi divorce

Roberts J awards American wife £62.3m following Saudi divorce
The wife applied for financial remedies for herself and her 13-year-old daughter pursuant to Part III of the Matrimonial and Family Proceedings Act 1984 following the husband’s pronouncement of talaq in Saudi Arabia. She had been married to the extremely wealthy Saudi husband for 12 years.

The husband, who was terminally ill, initially defended the application on the basis of diplomatic immunity but that claim was rejected by the Court of Appeal and thereafter he withdrew his challenge to the jurisdiction of the English court.

The wife had assets in her own name worth £15m including properties in Beverly Hills and London. The husband submitted that he had personal assets of £22.8m and an interest in trust assets of £95.3m. His wealth had been significantly greater but in 2013, prior to his illness, he entered into a contract with his three daughters (two from previous marriages) whereby pursuant to Sharia law he sold his assets for £512m. He was entitled to continue to receive the income on the assets during his lifetime. He had not been paid and did not expect to be since this was a form of careful estate planning to provide for his children after his death.

The wife asserted that the husband still had access to the assets held by his children and sought global provision of £196.5m including a housing fund of £62.8m and a capitalised maintenance provision of £127m. She further sought the return of a valuable blue diamond ring gifted to her by the husband but since removed by him from the matrimonial property. She claimed that the standard of living during the marriage had been ‘stratospheric’.

Her budget included, inter alia:
  • £2.1m for annual travel expenditure;
  • £1.02m for clothing including £40,000 for a new fur coat each year and £116,000 for handbags;
  • £495,000 for cars;
  • £335,558 for staff costs.
The husband proposed that £20m was sufficient to meet her needs in addition to £150,000 pa for the daughter. He further offered to pay the wife £17m over a 5-year period and offered her the use of a London property, held in the daughter’s name, during the daughter’s minority. She would, therefore, leave the marriage with assets of £37m.

The proceedings were expedited due to the terminal illness of the husband.

The judge held that it was entirely reasonable for the court to make an award in favour of the wife since she had received no provision from the Saudi court and the family connections with this jurisdiction were strong. The court would approach the claim on a need basis not a full sharing basis.

The wife’s claim in respect of her personal requirements was inflated and unnecessary in the context of an adequate provision for her reasonable needs. However, the husband’s proposal was neither appropriate nor reasonable in the circumstances of this case.

A sum of £18m was appropriate for a London housing fund. A sum of £500,000 pa was sufficient to meet her clothing and other personal costs. In total a sum of £2.5m pa would meet the wife’s expenditure needs. There would be a gradual step down to £1.26m by her 75th birthday. Maintenance would be capitalised to £44.3m for her total income needs.

Since it was likely that the daughter would lose her father shortly it was not appropriate to expect the wife to go to her step-daughters for maintenance for their sibling. Therefore, a capitalised lump sum of £1,773,715 would be paid in respect of the child’s annual income needs including school fees.

In respect of the blue diamond ring, the husband had offered the wife £2m in lieu of its return but if the wife chose not to accept that offer, a declaration was made pursuant to s 17 of the Married Women’s Property Act 1882 that she was the legal and beneficial owner.

The full judgment is available here.
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