Indian divorce ruling may impact rich British separation payoutsSeptember 5th, 2008 - 12:07 pm ICT by IANS
London, Sep 5 (IANS) Wealthy businessmen and women in Britain could start moving their assets offshore to avoid huge divorce payouts following a landmark court ruling in the divorce case of an Indian couple.A court in Jersey, in the Channel Islands, has ruled that a divorced husband or wife cannot stake claim to a share of their former spouse’s wealth if it is banked offshore.
The Jersey Royal Court has reversed an order of the London High Court that the wife of an Indian millionaire jeweller should get a share of his assets - parked in a trust in Jersey - as part of their divorce settlement.
The decision means that estranged spouses could in future be blocked by their ex-partners from claiming wealth held in Jersey or other Channel Islands and tax havens, including British territories and dependencies in the Caribbean.
The Jersey ruling was made in the case of Mubarak v Mubarik, a long-running dispute over the wealth of an Indian-origin Briton Iqbal Mubarik, who owns the Dianoor jewellery chain, which has a shop in London’s New Bond Street, according to The Telegraph.
Mubarik was last year ordered by the high court to give his wife Aaliya - who disagrees with her ex-husband over the spelling of their surname, claiming it should be Mubarak - money from a trust in Jersey thought to be worth about 18 million pounds ($32 million). Shortly before their divorce, Mubarak removed his wife as a trustee.
However, the Jersey Royal Court found that under the trust’s own rules, Mubarik was not legally entitled to pay his wife money from it - and refused to force him to do so.
The ruling is likely to catch the eye of super-rich bankers and hedge-fund managers wary of settling down in London due to its reputation as Europe’s costliest place to divorce.
Divorce law experts believe it will now encourage the wealthy to shift savings and large parts of their wealth to offshore accounts, shortly before or after they marry.
Grant Howell, a family lawyer at Charles Russell, said the judgement “provided an obstacle” for divorcees planning a raid on an ex-spouse’s wealth, highlighting that it could inspire rich Britons to shift assets to places such as Jersey.
In England’s largest ever divorce payout, businessman John Charman was last year ordered to pay his ex-wife Beverley 48 million pounds after the high court ruled that assets he held in a Bermudian trust should be included in their settlement.
Charman’s Bermudian lawyers are contesting the English courts’ right to make decisions about offshore trusts on the island.