- Associated Press - Wednesday, October 20, 2010

LONDON (AP) — Britain’s Supreme Court Wednesday ruled in favor of a German heiress seeking to protect her considerable fortune from her ex-husband — a decision that gives new strength to prenuptial agreements in England.

The ruling marks a potential turning point in the legal battle over prenuptial agreements in England, where courts have generally refused to recognize them as valid, binding agreements.

Nicholas Phillips, the president of the Supreme Court, said the judges decided by an 8-1 margin to let stand an earlier Appeals Court ruling that the prenuptial agreement in this case was fair and should be applied.

It is a victory for Katrin Radmacher, 40, a paper industry heiress with a fortune of at least $86.5 million, and a defeat for her ex-husband, Nicolas Granatino, 39, a former investment banker who had been seeking a greater share of her wealth than had been spelled out in their pre-nup.

The case was complex: Ms. Radmacher is German, her ex-husband is French, but they married, lived and divorced in England. The prenuptial agreement was signed at Ms. Radmacher’s father’s insistence in Germany, and would have been recognized in both France and Germany, where pre-nups are commonly upheld.

“For Nicolas and I, in our homelands — France and Germany — these agreements are entirely normal and routine,” Ms. Radmacher said in a statement. “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.”

The heiress, deeply tanned and wearing a white knit coat-style mini-dress, appeared nervous before the ruling. She sat only a few feet from Mr. Granatino — unkempt in jeans and a sweater — but the two did not exchange pleasantries or even glance at each other.

The couple married in 1998, had two daughters and separated eight years later.

Mr. Granatino — sporting both an iPhone and a BlackBerry — declined to comment after the defeat. He paused long enough to embrace his legal team, then hurriedly departed on foot while his former wife made an appearance before the cameras outside the court.

Her attorney, Simon Bruce, said the decision is a landmark ruling that “means pre-nups are binding as long as they are fair.”

Suzanne Kingston, head of the Family Law Department at Dawsons Solicitors, said the Supreme Court had given the most clear sign to date that pre-nups will now be upheld in England as they are in the rest of Europe and the United States.

But others cautioned that the impact may be more limited.

Sharon Bennett, a family law expert a North London firm, said the law is unlikely to change as a result of Wednesday’s ruling.

Mr. Granatino was awarded about $9.4 million in a divorce settlement, but a court last year slashed the payment, citing the prenup as justification.

The appeals court said he should receive a lump sum of about $1.5 million plus a $3.9 million loan for a house that will be returned when the youngest of the couple’s two daughters reaches the age of 22.

The Supreme Court backed that decision, ruling that the couple freely entered into the agreement and that it should be upheld.

The case marks a change in the way courts view such agreements in a country where the starting point for big money divorces has generally been 50-50 — or an equal distribution of assets.

Four years ago, the ex-wife of insurance tycoon John Charman was awarded $75 million — a sum so large that pressure rose to have pre-nups recognized.

Mr. Granatino did not seek half his wife’s fortune, but his lawyers say the terms imposed by the lower court would leave him in financial jeopardy.

Mr. Granatino had been an investment banker making more than $470,000 a year when the couple married. But in 2003 he left his job to pursue a doctorate in biotechnology at Oxford University. He now earns only a fraction of his former salary.

Britain’s Law Commission is currently reviewing the status of prenuptial agreements, and will recommend whether a change of law is needed — but not until 2012.

Associated Press Writer Benjamin Timmins contributed to this report.

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