Cambridge Family Law Practice

The wife of a successful technology entrepreneur has been awarded a £230 million, the third largest divorce settlement in terms of assets divided UK legal history. The landmark case saw the High Court setting aside a nuptial agreement which was found to be signed under undue pressure.

The former couple, both in their forties and citizens of an unspecified Portuguese-speaking country, married in 2005 and went on to have three children. In 2018 they moved to England, prompted by concerns about their personal security and by a desire for their children to have an English education.

The parties came from relatively financially modest backgrounds; the husband stated in oral evidence they had “absolutely nothing” at the outset of their marriage. The husband went on to become a serial entrepreneur, accruing a wealth of $1.5bn when a company founded by the husband was floated on the Nasdaq stock exchange.

As part of a financial planning exercise, the couple established large trusts for their three children, and, in 2021, signed a pre-nuptial agreement. This saw an equal share of “the overall wealth of the parties”.

Subsequently, the marriage broke down, the husband moved out of the family home and the wife applied for a divorce.

In April 2023, a second agreement was signed (a ‘post-nuptial’ agreement), in the context of the parties’ attempts to resolve their financial matters upon separation, which provided for a division of assets much more in the husband’s favour.

The dispute arose when the husband attempted to enforce the 2023 agreement, which was disputed by the wife. Unsurprisingly, given the assets at stake, contested legal proceedings progressed to the High Court, with the parties spending a combined sum of approximately £5.5m on legal costs.

The court found in favour of the wife based on a number of factors:

1. The 2021 agreement was considered by the court to be valid. Mr Justice Cobb noted that it had been entered into “of their own free will without any undue influence, duress, coercion or undue pressure…all the terms … represent the agreement of the parties in its entirety and the husband and wife were both said to be entirely aware of the contents of this agreement, its implications and consequences.”

2. The 2023 agreement was drafted in Portuguese, then later translated into English and again signed by the couple. The High Court noted that there were significant differences between the English translation of the later agreement and the original Portuguese version:

“The English language document was not however a direct (word-for-word) translation of the April document. Unhelpfully, there were differences between the April and the June versions: the differences included: (a) a materially different introductory paragraph, which removed a clause enabling review by the parties’ own English lawyers, (b) the insertion of a provision that “[b]oth parties also agree that no further disclosures are required”, (c) new clauses concerning the care of the children and the division of time and (d) new clauses concerning dispute resolution and jurisdiction.”

3. In addition, the 2023 agreement introduced a “wholly different [financial] structure”. This placed restrictions on the wife’s ability to withdraw from the financial trusts established by the family, giving the husband overall control of their management.

4. There was a significant power imbalance identified in the relationship, in which the husband discouraged the wife from obtaining legal advice and financial disclosure. The court noted “the wife relied throughout their marriage on the husband’s understanding and management of the family’s finances and so when he repeatedly warned her of disastrous consequences of adhering to the 2021 agreement, she believed him.”

Ultimately, the court found that the agreement was signed without proper legal advice and financial disclosure, and under undue pressure after a sustained period of controlling and coercive behaviour.

The court found that the 2021 agreement must take precedence, and the wife was awarded over £230 million, approximately 44.4% of the marital assets. Mr Justice Cobb concluded “…fairness and justice for these parties will be achieved in this case through a straightforward division and distribution of the marital assets.”

Emma Wager of Cambridge Family Law Practice said:

“This complex case highlights key principles in the case law relating to nuptial agreements, focussing on the fact that they need to be entered into the freely and without coercion or undue influence, and with the benefit of financial disclosure and legal advice. Where agreements do not meet these criteria, they are vulnerable to challenge. That is not to say that nuptial agreements are not worthwhile documents. Rather, this case stresses the importance of ensuring that they are drafted and executed properly.”

Read PN v SA here.