ARTICLE
6 October 2025

Potanina v Potanin - Court Of Appeal Decision Concludes A Game Of Snakes & Ladders

WL
Withers LLP

Contributor

Trusted advisors to successful people and businesses across the globe with complex legal needs
Part III of the Matrimonial and Family Proceedings Act 1984 gives the English court the power to grant financial relief after an overseas divorce.
United Kingdom Family and Matrimonial

Part III of the Matrimonial and Family Proceedings Act 1984 gives the English court the power to grant financial relief after an overseas divorce. This legislation was introduced to provide a remedy for former spouses (so long as at least one of them has a connection to England & Wales) if they have been left with no or no adequate financial settlement following a divorce abroad.

Critics, however, say that the framework is capable of being exploited for 'divorce tourism' given that England is often considered to be the most favorable place to divorce if you are a financially weaker spouse.

The legislation seeks to limit any 'second bites of the cherry' by requiring any prospective applicant to first obtain the Court's leave (i.e. permission) before their Part III application can proceed. This requires the applicant to (i) establish jurisdiction (i.e. a connection to England) and (ii) establish that they have a 'substantial ground for the making of an application'. In the long-running case of Potanina v Potanin, the issue of whether a former wife (who was divorced in Russia in 2014) should be given permission for a Part III claim has been occupying the English courts (from the High Court all the way up to Supreme Court) for an astonishing seven years, but the Court of Appeal's latest judgment decides unequivocally that she should be given permission.

Ms Potanina and her former husband are both Russian, they lived their entire married lives in Russia, and divorced in Russia in 2014. Ms Potanina received half the marital assets (a receipt in excess of USD 76m), but due to Russian law not having any regard to assets held beneficially (as opposed to legally) by her husband despite them all being accumulated during the marriage, her award was actually less than 1% of her husband's overall wealth (c USD 20bn according to published sources). Shortly after the Russian divorce, Ms Potanina obtained a UK investor visa, and then moved to the UK in 2016.

The Court of Appeal's latest judgment has said that characterizations of Ms Potanina by previous judges as a 'divorce tourist' were both unfair and unsound and has granted her permission because:

  • She has established jurisdiction in England (having been habitually resident in England for at least a year by the time she made her application).
  • As to whether she had a 'substantial ground' to make an application, the Court of Appeal reminded itself of the Supreme Court's previous judgment in this case that 'substantial' means 'solid' and that the court needs to be satisfied that the application 'is not totally without merit or abusive'. The Supreme Court simultaneously said that it didn't seem advantageous to further explain the test at the same time as saying that the closest analogous threshold is probably 'real prospect of success' and that the threshold is definitely not as high a threshold as needing to show a 'good arguable case'.
  • The Court of Appeal considered that Ms Potanina had a real and meaningful connection to England by virtue of her having held a UK investor visa since 2014, owning property here since 2014, and being habitually resident from January 2016 at the latest, with her connections to Russia becoming 'increasingly tenuous'. The Judge in November 2019 had been wrong to downplay her connections with England. The discrepancies between both her award versus her husband's award in Russia, and her Russian award and what would have been her English award, were also significant.

Whilst the Supreme Court's previous judgment in this case was at pains to say it did not wish to cast doubt on the threshold test for 'substantial grounds' it may, through nuanced semantics, nudge later judges who are asked to apply the test to be more inclined to conclude that it has been met. Certainly in this case, Ms Potanina's case has been looked at afresh and she has been granted permission where it was previously refused.

The case is particularly significant because the sums at issue in Ms Potanina's application far exceed any previous awards under Part III. But the substantive question of whether or not Ms Potanina will in fact be granted any relief under Part III and, if so, how much is yet to be considered so the seven year saga is far from concluded. Whilst the assets involved are exceedingly high in value, one still shudders to think about the level of costs that have presumably already been incurred in the multiple chapters of litigation in this case, before the real story has even begun.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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