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Disclosure of Assets in Divorce: Potanina v Potanin

Member: Roger Isaacs

The UK’s biggest ever divorce case is due to be heard in the High Court after a Russian oligarch’s wife launched a legal bid to claim a third of his fortune.

Vladimir Potanin and Natalia Potanina had been married for 30 years when in 2013, Vladimir, who has been described as the second richest man in Russia, announced that he wanted to end their union.

He had apparently decided this in 2007 but had unfortunately failed to tell his wife. Coincidentally, in 2007 Vladimir and his then business partner decided to divide their business interests.

Consequently, when they divorced in Russia in 2014, Ms Potanina was only awarded £5.5 million, although there are claims that her husband’s assets are estimated to be worth more than £15 billion. Mr Potanin has disputed that figure.

However, if his assets are worth anywhere near £15 billion, then a financial award of £5.5 million after more than 30 years of marriage would be far below anything the English court would have ordered, had the financial proceedings taken place in the UK.

Ms Potanina moved to London in 2014 and is now asking for the Court’s help under the provisions of Part III of the Matrimonial and Family Proceedings Act 1984.

She hopes to receive a pay-out commensurate with her former husband’s real wealth because the disclosure process in England is robust and the court will not merely accept what Mr Potanin says about his assets, which will be subject to forensic assessment.

In such cases, a forensic investigation will help identify assets wherever they are located and to ascribe value to them. The investigators will go back 30 years in an attempt to uncover anything that may have been hidden.

Roger Isaacs, Forensic Partner at Milsted Langdon, said: “Forensic accountants are regularly called upon to assist in matrimonial disputes during or after a divorce.

“Through careful examination of bank records, spending habits and documents they can often reveal hidden assets and capital that should have been disclosed to the courts.

“It will be interesting to see how this case develops and what the forensic accountants manage to uncover.”

Author: Roger Isaacs 9 September 2019