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Landmark case on pre-nuptial agreements in the Supreme Court

Hardwicke's Ajmal Azam comments on the landmark case currently before the Supreme Court:

The Supreme Court has today heard the first day of submissions in the appeal of Nicolas Granatino against his former wife, Katrin Radmacher, an heiress worth an estimated £100 million, who made legal history last year when her pre-nuptial agreement was given decisive weight by the Court of Appeal.

Originally, the High Court awarded a lump sum of circa £5 million to Mr Granatino.The judge found that the pre-nuptial agreement was defective in English law for a number of reasons, and that he would not be held to its terms but that Mr Granatino’s award would be circumscribed to reflect the fact that at the outset he agreed to sign the agreement.

The Court of Appeal overturned that decision ruling that the pre-nuptial agreement should have been given greater weight. The Court of Appeal ruled that Mr Granatino should be restricted to circa £2 million. That decision is subject to the current appeal instigated by Mr Granatino.

The Court of Appeal issued robust guidance as to the approach that the courts should take in respect of 'pre-nups' leading many to consider that they had effectively been ‘legalised’. 

There has been an increase in couples entering into 'pre-nups' but there continues to be a degree of confusion and many have hesitated in anticipation of this case and the ruling of the Supreme Court.

Nicholas Mostyn QC on behalf of Ms Radmacher has asserted that the Court of Appeal ruling was not only unfair, but that it was impermissible as it effectively amounted to a court legislating over pre-nuptial agreements which are not recognised in English law.  Richard Todd QC, on behalf of Mr Granatino, is expected to advance an argument that pre-nuptial agreements should, in most circumstances, be treated as binding by the courts.

Until legislation is enacted by Parliament, couples and the courts will be guided by the decision of the Supreme Court in this case; which it is hoped (however the court treats the decision of the Court of Appeal) will provide some much needed certainty. If the decision of the Court of Appeal is upheld by the Supreme Court, the status of pre-nuptial agreements will be significantly enhanced and will almost certainly lead to pre-nuptial agreements increasingly being upheld by the courts despite the lack of legislative grounding; the Law Commission, who are currently considering the status of pre-nuptial agreements, are expected to report in 2012.