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British courts finally recognise binding prenups

posted 20 Oct 2010, 06:22 by Sam Mbale   [ updated 20 Oct 2010, 06:24 ]

The Supreme Court rules in favour of German heiress Katrin Radmacher, deciding that the prenuptial agreement she had signed with her ex-husband to protect her fortune should be binding in England, synchronising British law on the issue with the rest of Europe.

LONDON, ENGLAND, UNITED KINGDOM (OCTOBER 20, 2010) ITN - The UK's Supreme Court ruled in favour of a German heiress on Wednesday (October 20) in a divorce dispute with a former investment banker, making prenuptial agreements binding for the first time under English law provided they are fair.

The court supported Katrin Radmacher in the multi-million pound dispute, deciding that the agreement she signed with her ex-husband Nicolas Granatino to protect her fortune should be binding in England, even though it was signed in Germany.

"Today's decision means a hugely important change in English law," Radmacher's lawyer Simon Bruce told reporters outside the court. "Prenups are now binding, so long as they're fair. Katrin is delighted that Britain has upheld fairness."

British courts had previously considered pre-nuptial agreements not binding when deciding who gets what when a marriage fails.

Granatino, a former JP Morgan banker, had gone to the Supreme Court after appeal judges slashed his divorce settlement from more than 5 million pounds (7.8 million U.S. dollars) to one million.

Newspaper reports said Radmacher, a paper company heiress, is set to inherit more than 100 million pounds. Granatino told the court he had not realised the extent of her wealth when he signed the agreement.

The court voted 8-1 in support of Radmacher, with Lord Phillips, president of the court, saying, "The court should give effect to such an agreement if it is freely entered in to by each party, with a full appreciation of its implications, unless in the circumstances prevailing it would not be fair to hold the parties to their agreement."

However, courts would still have the discretion to waive prenups if they are not fair or do not provide for the needs of the children of a marriage, Phillips wrote.

The high-profile case sets a precedent in divorce law and could have wide implications for the popularity of prenuptial agreements in the country, legal commentators said.

Radmacher said in a statement afterwards: "For Nicolas and I, in our homelands -- France and Germany -- these agreements are entirely normal and routine.

"We made a promise to each other that if anything went wrong between us, both of us would walk away without making financial claims on each other. The promise made to me was broken.

"I know some people think of prenuptial agreements as being unromantic, but for us it was meant to be a way of proving you are marrying only for love."