Prenuptial agreement

Prenuptial agreement

16 November 2016 Mary McEvoy

Jurisdictional considerations

When entering into a pre-nuptial agreement there are a number of legal issues both parties must consider carefully. Which country they wish for the agreement to be interpreted in (the jurisdiction) and which country’s law should be applied to the agreement (governing law) are two such issues that are fundamental especially as a large proportion of the UK population will choose to live or work abroad at some point in their lives.

Pre-nuptial agreements are not legally binding on an English court, however they have been considered persuasive law since the case of Radmacher v Granatino in 2010. The Supreme Court held in this case that an English court should give weight to a prenuptial agreement as long as both parties have entered into it with a full understanding of it and that they had received proper advice.

Ultimately if there is a lack of clarity in the agreement regarding jurisdiction or governing law or if one or both of the parties had not received appropriate advice concerning these issues the court is unlikely to find that the agreement is fair.

Jurisdiction

The agreement must include a clause that clearly indicates where it is intended to be interpreted.

The clause could state that the parties intend to make one country their home and that they wish for this country to have exclusive jurisdiction to deal with the divorce. Alternatively the clause could set out that the applicable jurisdiction will be that of the country in which the parties are resident at the time of the divorce.

This clause will not necessarily be binding on a court depending on the country in which divorce proceedings are initiated and therefore may not be taken into consideration. It is however, a clear indication by both parties as to their intentions at the time of the marriage which adds weight to the agreement.

Governing Law

The agreement should include a clause that confirms that whichever jurisdiction ends up hearing the proceedings, they should apply the law of a certain country, for instance English Law.

Parties may choose to pick the law of a country which they have strong connections to and under which the prenuptial agreement is likely to be considered binding.

For example in the case of Radmacher the court stated that although the governing law clause was not binding on the English courts, the choice of German law showed the parties’ intention’s for the agreement to be binding as prenuptial agreements are binding under German Law.

Although an English court would not consider such a clause binding on it, other jurisdictions, including many European countries, may be prepared to apply such a clause if it was included in the agreement.

Obtaining Proper Advice

Taking advice from foreign lawyers, in addition to advice of lawyers in the country in which the agreement is drafted, is crucial. Failure to take such advice may result in one party later claiming that they did not fully understand the implications of the agreement in the country in which it is intended to be applied.

For example, in a recent case where the parties were married in Scandinavia the court held the wife had no idea what claims she was potentially giving up in this (English) jurisdiction and could not therefore be said to have intended the agreement to determine the financial consequences of a marriage ending in England.

If they had taken advice from English lawyers before signing the agreement then it is likely that it would have been considered as persuasive.

It is also important that if conflicting advice is received from a foreign lawyer that the parties consider amending the agreement in light of this advice.  If the parties decide to only consider the advice of one lawyer the court may not consider that they had a full understanding of the agreement when they signed it.

Any advice received from a foreign solicitor should be confirmed in writing and should include an explanation of the agreement’s effect on and interrelationship with any English advice.

A prenuptial agreement should constitute a valid contract under the law and English and Wales irrespective of where the agreement was made. This will effectively apply to any country and as such parties will normally choose to have an agreement drawn up in the country that they intend to live in when they are married.

Regardless, drafting will continue to be important to ensure that in the eventuality that the agreement is not being considered in the country which it was drawn up that it would still be considered fair and persuasive to a court in the country in which it is being applied.

How we can help

If you are considering whether to enter into a pre-nuptial agreement, or have concerns about judicial maters please contact a member of Neves’ Family Department. We offer an initial inexpensive appointment when we will consider with you what further steps you might be advised to take.

Email us on info@nevesllp.co.uk