Know the law when it comes to expat divorce in the UAE

Expat divorce - five financial implications of getting the jurisdiction wrong.

A court’s ability to accept an application for divorce is called its “jurisdiction”. The choice of jurisdiction on divorce can have far-reaching implications financially.

For expats, there is usually a choice of jurisdiction in which a divorce may take place. Jurisdictions to consider would be that of the husband or wife’s home country (irrespective of where they now live), or the local UAE court.

Jurisdiction will largely depend on the nationality, domicile and habitual residence of both parties. Different definitions and rules apply depending on the law of the home country. For example, for British expats, divorce and financial matters can be dealt with through the English courts, without them even leaving the UAE. This is because proceedings can usually be issued in England based on the parties’ “domicile of origin” even for those who have lived abroad for years.

Here are the five major financial implications of the choice of jurisdiction on an expat divorce (for illustrative purposes UAE law is contrasted only with English law):

1. Division of capital and property

English law allows the courts a wide discretion to redistribute assets of spouses during a marriage breakdown, regardless of the origin and strict legal ownership of those assets. For example, assets acquired before the marriage or those inherited by one party can be vulnerable in a divorce. Ownership could be transferred from one spouse to the other or there could be an order for sale to divide proceeds.

Under UAE law each party simply retains the assets and property held in their names. If all property is held in one party’s sole name, the other cannot claim against that.

2. Sharing of pensions

The English courts have the power to share pensions. Pension benefits are subdivided at the time of the divorce; the parties then have two entirely separate pensions which they can contribute to in the future in the normal way. There are no equivalent provisions in UAE law.

3. Division of income

Under English law, marriage subjects each party to a basic legal duty to take responsibility for each other’s financial needs. On divorce, that responsibility does not end. This usually means that the party with the greater income must pay the other ongoing maintenance. The law is gender neutral in this respect.

To assess how much spousal maintenance should be paid (and for how long) key factors will be the lifestyle of the couple during the marriage, the length of marriage and the needs of any children. If there are children or a marriage has been lengthy, spousal maintenance might be paid on a “joint lives” basis.

In UAE law a husband can make no claims for maintenance from the wife, regardless of their financial circumstances. A wife may make financial claims for a maximum of one year for “moral damage” if she was divorced against her will, backdated maintenance if she can show lack of financial support during the marriage, and additional support for the three-month waiting period following divorce “iddah”. She may also seek a nominal carer’s allowance as a part of child maintenance, but there is no substantive ongoing spousal maintenance.

4. Enforceability

Seek advice as to whether an order from the UAE could be enforced in the home country or vice versa.

The location and ownership of the main assets of the family are key. Cross-jurisdictional issues can be avoided by structuring a settlement with enforcement difficulties clearly in mind. For example, a wife might seek transfer of the mortgage-free property in the home country into her sole name in lieu of making claims for maintenance.

5. Prenuptial agreements

Prenuptial agreements are common in continental Europe and the US. The choice of jurisdiction could undermine the existence of a prenuptial agreement altogether, or ensure it is upheld. This is because prenuptial agreements are treated differently within different legal systems. For example, foreign prenuptial agreements are likely to be upheld in Australia, Canada and Hong Kong; a more cautious approach would be taken in Singapore and Ireland, and in India and Brazil prenuptial agreements are not recognised at all.

Sonny Patel is a solicitor at expatriate law, a division of Al Rowaad Advocates, specialising in divorce, separation and other family law matters through the UAE or English courts

Follow The National's Business section on Twitter