Landmark court ruling could usher in new era on 'pre-nup' agreements

Nicolas Granatino, who is French, and Katrin Radmacher, a German paper heiress worth an estimated 100m, signed an agreement not to make a claim against each other if they divorced.

Such contracts are enforceable in France and Germany, where this one was signed, but not in England, where the couple married in 1998.

Mr Granatino took his case to the highest court in the land after his High Court divorce settlement of 5.6m was reduced to 1m plus maintenance payments by the Court of Appeal last year.

The appeal judges ruled for the first time that pre-nups should be taken into account when deciding on divorce settlements.

But the Supreme Court could go much further over the legal status of the agreements.

Some legal commentators have suggested that the case could go as far as ensuring that all pre-nups between couples in England and Wales are recognised as binding in the courts.

And other lawyers claim that if the Supreme Court rejects binding pre-nups, it would reaffirm London's status as the divorce capital of the world.

It gained the reputation after divorce courts adopted a system of equal shares of marital assets in any settlements and led to "forum shopping" by spouses.

Lawyers say pre-nups have become increasingly common in the UK but the law remained unclear and there were differences of opinion amongst the judiciary.

They said it was hard to give people accurate information or advice as to whether or not that agreement is going to be upheld.

The ruling in the case has been eagerly awaited since the hearing in March and has resulted in every case where a pre-nuptial agreement is an issue being adjourned until after the decision is announced.

Caitlin Jenkins, a family law partner at national law firm Mills & Reeve, said: "The Supreme Court has been presented with the perfect storm for the introduction of pre-nuptial agreements in the UK.

"The combination of falling wealth levels against a bleak economic backdrop, widespread unease at the disparity between UK and European laws and the Privy Council's backing of post-nuptial agreements in the 2008 Macleod case means that it will be a long time before the courts have another opportunity to clarify the muddle that is the current law in the area."