The High Court last week dismissed a post-nuptial agreement on the basis that it was ‘grossly unfair’.

The case of Kremen v Agrest involved an agreement signed by the Ms Kremen and her Russian financier husband some 10 years into their marriage.  The agreement seemed to seek to limit her claims in the event of divorce.

The parties married in 1991, and have been involved in complex, contentious litigation since 2009.  Whilst Mr Justice Mostyn indicated in his judgement last week that he hoped that his judgement would see the end to a chronic and complex piece of matrimonial litigation’, he noted that he suspected that this would not be the end of this litigation.

Whilst Mr Agrest contended that he had no assets, over £600,000 was held in court and it was estimated that the husband was in fact worth over £100,000,000.  The agreement seemed to seek to limit the wife’s claims in the event of divorce to a maximum of £970,000.

The High Court awarded Ms Kremen £12.5 million, of which £8.3 million was to constitute maintenance.

Amongst other issues, Mostyn J found that the post-nuptial agreement was grossly unfair both to the wife and to the children of the marriage, whose needs were not met by the settlement envisaged.  He also noted that the wife did not enter freely into the agreement, nor was there evidence of independent legal advice.  In addition, the agreement was grossly unfair because it denied the wife of a fair share of a fortune, the accumulation of which she had herself equally contributed.

Things to note

The Court can be influenced by a post-nuptial agreement, but it must be properly executed.  This includes both parties receiving independent legal advice, and entering into the agreement – and being seen to do so – freely.

Regardless of the existence of an agreement, the Court remains concerned with the all the circumstances of the case, including the needs of the parties and any children.  The agreement itself is just one of the factors the court will consider.

Of course, if the agreement itself takes account of those factors, and is properly entered into, then it has far greater chance of being successfully persuasive before a future Court, and indeed of resisting any threats of litigation in the first place.

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