Sunday, November 26, 2006

Mirror International Prenuptial Agreements

We frequently recommend mirror prenuptial agreements for people with international domiciles, citizenship or businesses.

Love doesn’t always last but the consequences of failed marriages can endure for a lifetime.

The problems can be multiplied when the people and/or the assets are international.

In the context of international prenuptial agreements, a mirror agreement is one that is drafted in one jurisdiction to follow the terms of an agreement that applies in another jurisdiction.

The purpose is to maximize the chances of enforcement of the agreed terms in multiple jurisdictions.

Thus if H and W live in London but one of them has a New York domicile, they must be advised that prenuptial agreements are not enforceable in England.

An English prenuptial agreement will be given some weight – sometimes a lot, sometimes a little -- in an English court, but that’s all. Whether an English agreement will be enforced in the U.S. is uncertain, since an American court may well determine that its validity is governed by English law since it was negotiated in England and that is where the parties were most closely connected at the time of execution.

A New York prenuptial agreement may not be enforced in the U.K., Singapore, Hong Kong or some other jurisdictions.

If H and W believe that they might move to the U.S. in the future, it makes sense to have two agreements, one under English law and the other under the law of the American state with which they are most closely connected.

Another benefit of having a New York agreement in these circumstances is that New York is among the toughest jurisdictions in the world for enforceability. New York lawyers will insist that there be full disclosure of assets; that the terms be fair to both parties; and that both sides be represented by independent counsel. This means that a well-drafted New York agreement may well survive in any American state and in many other jurisdictions around the world.

Since international people can surely not predict with any certainty where they will live in the future, this provides significant benefits.

Of course, to provide greater security to the party whose assets are being protected it is advisable to seek advice from matrimonial counsel in every jurisdiction in which a client says that he might live in the future. In one case involving a famous international globetrotter we fput together a global team of divorce lawyers to cover as many bases as possible.

It is important to provide for one of the agreements to be superior to the other. The primary agreement should normally be the one that is the jurisdiction which provides the greater chance of enforceability. Thus, between an English and a New York agreement, it is normally preferable to provide that the New York agreement will have priority. The English agreement should provide that it will come into play only if the New York agreement is for any reason unenforceable.

Friday, November 17, 2006

EU Member States Attack Divorce Conflict of Laws Scheme

16.11.2006 - 09:30 CET | By Teresa K├╝chler
EUOBSERVER / BRUSSELS - EU member states are lining up to attack a European Commission proposal to establish common rules for cross-border divorces which could - in an extreme scenario - see Iranian divorce rules applied in European courts in future.

The proposal - called Rome III and presented last July - sets out which national legislation should apply in the case of a couple of two nationalities or a couple living in their non-native country, such as an Irish and Finnish pair of EU civil servants living in Brussels.

The commission argues it will give clarity and prevent disputes related to "shopping" for jurisdictions, so that if the couple in the example divorced but could not agree whether to do it under Irish, Finnish or Belgian law, Rome III would impose the law of the country where they live or have the strongest ties to.

In cases involving non-EU citizens or non-EU states, Rome III would also favour a legislature to which both spouses have a strong connection, with a Swedish justice ministry document plotting a potential scenario in which European courts have to deal with a dispute under Iranian law.

The Swedish view of Rome III imagines a Swedish woman who marries an Iranian man in Sweden and emigrates to Iran but after several years decides to leave both her spouse and his country and go home. "The proposal means that Iranian divorce law would be applied by the Swedish court," the justice ministry study states.

The strong difference in marital law worldwide - with some countries forbidding divorce or propagating a culture of arranged marriages - turns the universal dimension of Rome III into a legal and political minefield in the predominantly liberal democracies of Europe, legal experts say.

"Forced marriage, where a spouse - most probably the woman- cannot get out of the marriage, is one of the topics that is bound to come up for discussion", one lawyer told EUobserver.

Even within the EU, divorce laws differ widely - it is illegal in Roman Catholic Malta but quick and easy in Sweden, while other member states require different lengths of time of separation prior to divorce or different "bases of fault" on which to legally split.

Malta has stated it will oppose any proposal that would oblige Maltese courts to apply foreign laws to circumvent its ban on divorce.

"If Ireland were to adopt and implement this measure, this would allow EU nationals resident in Ireland to obtain a divorce in our courts on substantially different and less onerous grounds than that provided for in our constitution", the Irish justice ministry recently said, planning an opt-out from Rome III.

Meanwhile, some EU member states such as the UK dislike Rome III because it encroaches into the national domain of family law and could see divorce cases drag out in time as UK courts struggle to find experts on foreign jurisdictions in Britain's increasingly multi-ethnic society.

"It [Rome III] would sadly not bring about the benefits it was intended to bring about, at least not in the UK," a UK diplomat said, confirming that the UK has also requested an opt-out from the bill.