High Court Grants Relief After Husband Transfers Assets To Prevent Payment of Lump Sum Award to Wife

Quoting Tolstoy’s ‘Anna Karenina’, “All happy families are alike, each unhappy family is unhappy in its own way”, the opening sentence of the High Court judgement of Akhmedova v Akhmedov and others [2021] EWHC 545 (Fam) sets the scene in the latest in what has been a real-life saga. Justice Knowles goes on to say, “With apologies to Tolstoy, the Akhmedov family is one of the unhappiest ever to have appeared in my courtroom”. What follows is a case of considerable complexity, but ultimately resulted in the wife, Tatiana Akhmedova (W) of a Russian Billionaire, Farkhad Akhmedov (H), being awarded relief by the High Court after he redistributed substantial sums of assets to prevent her from receiving her financial remedy proceedings award. Rather than spell out every detail of this case, we will provide you with a flavour of what went on in the High Court and the judge’s reasoning for awarding in favour of W.

Background to Akhmedova v Akhmedov and others [2021]

In 2016, W was awarded £453 million as a financial settlement after her divorce from H. This represented 41.5% of his total assets. Since the date of the award, H has refused to comply with the settlement, using a wide variety of schemes and mechanisms to put his assets out of the reach of W, resulting in a long period of enforcement proceedings. 

In total, the 2021 case involved eleven respondents, including the son of H, Temur Akhmedov (T), who had been involved in assisting H to redistribute his assets.

W sought relief under the Insolvency Act 1986 (IA 1986) and the Matrimonial Causes Act 1973 (MCA 1973) and asked the court to order the return of the assets.

In accordance with section 423 of the IA 1986, section 79, the judge set out four requirements for the relief to be granted; specifically, “(1) a debtor; (2) who enters into a transaction; (3) at an undervalue; (4) with the purpose of putting assets beyond the reach of or prejudicing the interests of a person with an actual or potential claim”. Transactions in this sense may be informal arrangements and procurements by third-parties. Transferees of such funds have no defence even if acting in good faith or if they are no longer in possession of the transferred funds. Courts also have a “broad discretion to make “such order as it thinks fit” to remedy matters.

W granted relief by the High Court

On the basis of the evidence presented, the High Court concluded that H and T had, indeed, deliberately distributed assets to avoid payment in accordance with the 2016 financial order to W through a complex web of trusts and corporate entities. Indeed, during the proceeding, T stated he was “always involved with my father to help him protect his assets”. The court also saw evidence in the form of Whatsapp messages between H and T in which H said, “I will burn this moneys rather then will give her”; Temur replied, “agree/ doesn’t deserve $1 penny”.  Justice Knowles came to the following conclusions:

• W had been the victim of a “series of schemes designed to put every penny of the Husband’s wealth beyond her reach”
• The transfers of very large sums of money from H to T were clearly driven by the Husband’s overarching desire to keep his assets from W
• Transfers to trusts based in Liechtenstein Trusts were, “on Temur’s own admission, intended to put assets beyond the Wife’s reach”
• W’s claims against the Liechtenstein Trusts, Borderedge (another of the named respondents) and T were granted.

On T, Justice Knowles was particularly scathing, stating in her concluding remarks, “Temur told me in his evidence that he had helped his father protect his assets from his mother’s claims. He was, indeed, his father’s lieutenant. Temur has learned well from his father’s past conduct and has done and said all he could to prevent his mother from receiving a penny of the matrimonial assets. He lied to this court on numerous occasions, breached court orders; and failed to provide full disclosure of his assets. I find that he is a dishonest individual who will do anything to assist his father, no doubt because he is utterly dependent on his father for financial support”.

Final words

While this case may appear complex, it is, in fact, a simple and clear cut case of an attempt to deprive a wife of money she is legally owed following divorce. It demonstrates the robust stance that English courts take in cases involving the deliberate hiding of assets to avoid payment under a financial order following divorce, even where the amounts awarded are in the hundreds of millions of pounds. It also shows the pragmatic approach they take and willingness to use freezing orders to prevent the disposal of assets regardless of jurisdiction. 

If you are involved in financial remedy proceedings, we can provide you with the guidance, legal expertise, and support you need at this difficult time. We will always seek the best possible outcome, with your best interest and needs, and those of your children our primary goal.

For a free consultation regarding financial remedy proceedings and arrangements, please call us on 0208 300 6666.