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Wednesday, 12 June 2013

UK: Nigerian oil tycoon loses £17.5m divorce battle

UK: Nigerian oil tycoon loses £17.5m divorce battle
The ex-English wife of a Nigerian oil tycoon, Michael Prest, yesterday won a lengthy court battle in Britain for properties he owned worth millions of pounds, in a Supreme Court ruling with significant implications for divorcing couples.
Lawyers for Prest had claimed the properties were not his to hand over because they were legally owned by companies in his Petrodel group. But seven judges at the Supreme Court, the highest court in the land, ruled unanimously in favour of his English wife Yasmin, who he married in 1993 and divorced in 2011.
They found the disputed properties were held on trust for Michael Prest and he was “beneficially entitled” to them, and as such they were eligible to be transferred to his ex-wife. Mr Prest was not in court to hear the judgement being delivered over the £17.5m divorce settlement.
The United Kigdom’s Supreme Court judgement marks the latest round of a lengthy legal cash dispute between the couple over Prest’s fortune. In October, the Court of Appeal ruled that a High Court judge had earlier wrongly ordered Mr Prest to transfer properties, worth millions of pounds and held in the names of companies he controlled, to Mrs Prest.
She then asked the Supreme Court, the highest court in the UK to assess the case, where seven judges yesterday unanimously allowed Mrs Prest’s appeal.
Prest, founder of Nigerian energy company Petrodel Resources, claimed to be worth about £48m.But Mrs Prest said he was worth much more than than that: “tens if not hundreds of millions” of pounds.
Mrs Prest said after the decision: “I’m delighted and relieved that the Supreme Court has ruled as it did. “I’m grateful to the judges for the care and thought they gave the case. It is more a case of satisfaction and relief than celebration. None of this would have been necessary if Michael had been sensible and played fair.”
Judges heard the couple in their early 50s married in 1993, spent most of their time in London, had properties in Nigeria and the Caribbean and lived to a “very high standard”.
Lawyers said the new ruling could have significant implications for divorcing couples.
The challenge concerned the position of a number of companies belonging to the Petrodel Group which are “wholly owned and controlled” by Mr Prest. One of the companies is the legal owner of five residential properties in the UK and another is the legal owner of two more.
The question the Supreme Court had to tackle was whether the court had power to order the transfer of the seven properties to Mrs Prest, given that they legally belonged to his companies, not him. Allowing Mrs Prest’s appeal, the court declared that the seven disputed properties vested in the companies were ones that Mr Prest was “entitled, either in possession or in reversion”.
One of the judges, Lord Jonathan Sumpton, said it was not possible to give “general guidance” following the ruling, saying the issue of whether company assets were  beneficially owned by their controller was a “fact-specific issue”.
But family law experts said the ruling was highly significant. “It means that business people cannot deliberately ‘hide’ their assets in businesses and corporate structures to protect them in future in the event of a divorce,” said Alison Hawes, a specialist family lawyer at Irwin Mitchell.
Marilyn Stowe, senior partner of Stowe family law, said the ruling was a “victory for common sense” and the judges had found an “ingenious way” around existing company and family law.
Michael Hutchinson, a partner at law firm Mayer Brown, said experts would be poring over the “extraordinary” judgement for some time to try to understand its limits. “The Supreme Court has handed down a landmark decision in which, for the first time since at least the end of the 19th century, it has accepted a general exception to the rule against ‘piercing the corporate veil’,” he said.

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