Legal victory for heiress over pre-nuptial deal

Unlike the USA and the rest of Europe, the contracts where couples agreed how they would divide their assets if they split up had little force here.

Reliance by English family court judges on the dictum that marital wealth should be divided equally had led to London becoming the divorce capital of the world.

But yesterday the Supreme Court, the highest in the land, ruled by a majority of eight justices to one that in the right cases, a pre-nup can have decisive or compelling weight.

Nicolas Granatino, former husband of the German heiress, took the case to the Supreme Court after appeal judges slashed his divorce settlement from more than 5m to 1m.

Appeal judges had ruled that "decisive weight" should be given to the agreement signed before he married that he would make no claims on Katrin Radmacher's fortune.

The case was seen by lawyers as the ultimate test of whether the agreements were applicable in English law.

The justices dismissed the ex-husband's appeal, saying that following their ruling "it will be natural to infer that parties entering into agreements will intend that effect be given to them".

The president of the Supreme Court, Lord Phillips, said the courts would still have the discretion to waive any pre-nup or post-nup agreement, especially when it was unfair to any children of the marriage.

Katrin Radmacher, who was present at the Supreme Court for the ruling, said afterwards: "I am really pleased with the ruling but saddened at the four-year process that brought us to this point.

"I am delighted that Britain has upheld fairness. It is important to me that no one else should have to go through this."

Mr Granatino and Ms Radmacher married in 1998 when she was running a boutique in Beauchamp Place, London, and Mr Granatino worked for JP Morgan where at the height of his career he was earning as much as 325,000 a year.

At the time of their separation in 2006, Mr Granatino was studying for a D. Phil in biotechnology at Hertford College, Oxford, and Ms Radmacher had amassed a personal fortune from her family's paper company.

Although pre-nuptial agreements are not binding under English law, in the High Court, Mrs Justice Baron considered that Mr Granatino's award should be "circumscribed to a degree" to reflect the fact that he had signed the document.

He was awarded 5.56m, made up of 2.5m for a home, 700,000 to pay off his debts and 2.335m which he could draw on for the rest of his life to provide him with an income.

Ms Radmacher was also ordered to pay Mr Granatino 25,000 for a new car and fund the costs of a furnished house in Germany for her former husband to enable him to visit their children at the weekends.

The Court of Appeal overturned Mrs Justice Baron's order and reduced Mr Granatino's award by holding that his 2.5m home should revert to Ms Radmacher once their youngest daughter (who was seven at the time) turned 22 and that the 2.335m lump sum should be reduced to such amount as would provide Mr Granatino with an income for 15 years, when his financial responsibilities in providing a home for his daughters came to an end.

During the Supreme Court hearing, Nicholas Mostyn QC, representing Mr Granatino, had told the justices at a hearing in March that when Mrs Justice Baron decided the case in the High Court in 2008, she said the pre-nuptial agreement signed by the parties in 1998 was "manifestly unfair" because the husband had no separate legal advice, there was no financial disclosure by the wife and it left him with no money on divorce even if he was in serious difficulties.

Mr Granatino, 38, a French national, was divorced from his former wife, reputed to be one of the richest women in Europe, in 2007. They have two children, aged 10 and seven, and spent most of their life together in Chelsea, west London.