Judgment has been handed down in respect of Mrs Kroupeeva’s application for financial remedies in challenging circumstances where Mr Kroupeev sought to frustrate her claims at every turn by his failure to engage with the proceedings correctly. The judge found that his “engagement has been significantly tainted by his ongoing breach of court orders.”
These breaches included failure to provide proper disclosure and to comply with orders to pay Mrs Kroupeeva sums of money by way of interim maintenance and to meet her legal fees.
The parties met as teenagers in Russia and had a long and enduring marriage, moving to London in the early 90s. Mr Kroupeev enjoyed significant success in the energy sector, amassing a fortune which afforded the family a luxurious standard of living – owning several homes, employing a team of household staff, travelling by private jet and enjoying regular five star holidays.
Following Mrs Kroupeeva’s discovery that Mr Kroupeev had a secret second family in Russia, he sought to reduce, and then withdraw financial support for her leaving her in a precarious financial position. It was necessary for Mrs Kroupeeva to obtain a worldwide freezing order in circumstances where she believed Mr Kroupeev was seeking to move assets to defeat her claims. The parties’ accounts of the available assets varied considerably and the judge found Mr Kroupeev’s evidence to be “profoundly unsatisfactory and lacking credibility” and found that his disclosure was “riddled with gaps and inconsistencies.”
In particular, Mr Kroupeev disavowed an interest in respect of a Trust and its underlying – and substantial – assets. Against this background the judge moved to draw adverse inferences against Mr Kroupeev and found that the trust structure and its directly owned and underlying assets had made continuing provision for the family and constituted a nuptial settlement that the court had the power to vary. A number of other adverse inferences were made against Mr Kroupeev and the court held that if it was wrong about the extent of his wealth then he had nobody to blame but himself for failing to properly comply with the disclosure exercise. As a consequence, the judge put Mr Kroupeev’s identifiable personal wealth at £59.5M and assets held under the nuptial settlement at £244.1M.
The judge found that all of the assets had been accumulated by the parties together during the marriage and as such were matrimonial property that fell to be divided upon divorce. Mrs Kroupeeva’s sharing claim could not be precisely calculated as the court was unable to quantify undisclosed assets. The court awarded Mrs Kroupeeva total assets worth £100.6M including those assets which the court considered could be recovered most easily recovered (real property) and a substantial lump sum. The total award represents 33.3% of the assets that the court identified the husband has access to.
The departure from equality reflected various factors including the parties’ children’s interests in the trust and the fact that Mrs Kroupeeva would receive a cash lump sum leaving Mr Kroupeev with more of the illiquid assets. Whilst the court did not vary the nuptial settlement at this stage (instead ordering Mr Kroupeev to pay a lump sum) it has left the door open for Mrs Kroupeeva to restore her application to vary in the event that Mr Kroupeev does not comply with the order.
This judgment reflects a resounding success for Mrs Kroupeeva in extremely challenging litigation where Mr Kroupeev sought to frustrate her claims at every turn by his litigation conduct.
Harriet Errington says “We are delighted to have achieved a successful outcome for Mrs Kroupeeva despite every attempt by Mr Kroupeev to deny her claims. This litigation required us to employ every tool in our arsenal to try to build a full financial picture in the face of Mr Kroupeev’s campaign of avoidance and obfuscation. The judgment makes clear that the judge saw through Mr Kroupeev’s attempts to evade making proper provision for his wife and makes robust findings and adverse inferences against him. The result in this case is a paradigm example of the wide-ranging and far-reaching powers of the English family court in dealing with cases involving assets held overseas and in complex structures. The immense power of the English family court should not be under-estimated.”
Mrs Kroupeeva commented, “I am delighted with the outcome of this judgment which makes fair financial provision for me following a period of troubling insecurity caused by Mr Kroupeev’s behaviour and litigation conduct. I could not have endured the past fifteen months without the support of my entire legal team who have been dedicated and tenacious throughout these proceedings. I wish to express deep gratitude to Justin, Tom, Harriet, Katie, Isabella and Aoife who have fought so long and hard on my behalf and have helped keep my spirits up during this gruelling time.”
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For further information, please contact Harriet Errington or your usual contact in the Family Department or, alternatively, telephone on 020 7465 4300.
