Will this “blizzard of litigation” make history?: Potanina v Potanin  EWCA Civ 702
- The parties married in Russia in 1983, where they lived throughout their married life. They had three children.
- The parties were not well off when they met, but H accumulated circa. £20 billion during the course of the marriage. The majority of this “formidable fortune” was held through trusts and corporate vehicles .
- Although the marriage ended, the point of separation was disputed by the parties. H claimed that the separation came in 2007 when a sum of $76.1 million was transferred to W. H said that the parties decided not to go through a formal legal separation process at the time in order to protect their youngest child from the distress of a divorce. They continued to take family holidays together and to celebrate festivals as a family.
- W’s case was that the parties separated in November 2013, by which time, unbeknownst to her, H was in another relationship and had another child.
- The Russian courts found the year of separation to be 2007 and pronounced the parties’ divorce on 25 February 2014. This led to a “blizzard of litigation”. Between 2014 and 2018 the Russian courts heard five different cases brought by W, all of which went on appeal.
- The extensive litigation in Russia related to W’s “ultimately fruitless” attempts to obtain half the assets held beneficially by H . Whilst the Russian courts approach divorce settlements by reference to an equal division of the parties’ assets, W’s primary case was that they do not include for division assets owned beneficially but not legally by a spouse. As a result, W had received only a “modest balancing figure” calculated to bring her settlement up to one half of the assets held outside of the corporate/trust structures after credit had been given for the $76.1 million previously transferred to her . Ultimately, W’s settlement was a tiny portion of the wealth of the family and, at 58 years old, it was arguably nowhere near the sum necessary to meet her long-term needs given the lifestyle she was accustomed to.
- In June 2014, W obtained a UK investor visa and purchased a property in London. It was her case that this property had been her permanent home since the beginning of 2017. As such, when W made a without notice application for leave to make an application under Part III of the MFPA 1984 (“Part III”) under FPR 8.25, it was made pursuant to s.15(1)(b) on the basis of habitual residence in England.
- On 25 January 2019, Cohen J (“the judge”) granted W ex parte leave to apply for financial relief pursuant to Part III.
- H applied to set aside the grant of leave, pursuant to FPR 18.11, on the basis that the judge had been misled about the facts, the issues of Russian law, and the applicable principles of English law. Following the set aside hearing on 3-4 October 2019, the judge reserved judgement and made an order dated 8 November 2019 by which he set aside the leave on the basis that he had been misled.
- W’s appeal against this order came before Lady Justice King, Lord Justice David Richards, and Lord Justice Moylan.
- The Court of Appeal considered the proper approach to an application made for the grant of leave, and to any subsequent application to set aside an ex parte order for leave.
- Part III provides (subject to the jurisdictional requirements set out in s.15) for the making of an application for financial relief following an overseas divorce. An order can be made notwithstanding that an order for financial relief has been made in a country other than England and Wales. However, by s.13, an application cannot be made without the leave of the court, and no leave is to be granted unless the court considers that there is “a substantial ground for the making of an application for such an order”. 
- King LJ reflected on principles set out in Agbaje v Akkinoye-Agbaje  UKSC 13 for granting leave and approaching an application to set aside:
- The test is not high for the grant of leave but there must be a ‘solid’ case to be tried;
- The power to set aside may only be exercised where there is some compelling reason to do so. In practice it will only be exercised where a decisive authority is overlooked or the court has been misled;