Foreign Pensions on Divorce

Goyal v Goyal [2016] EWHC 50 (Fam)

It is well established in the family courts that ‘The court is able to make a pension sharing order against a foreign pension. Whether or not it will exercise its jurisdiction to do so will depend upon the reaction of the pension scheme when served with the application (Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006, SI 2006/207, as amended.

District Judge Brasse at first instance in relation to an Indian pension made an order following that established view and made declarations as to the beneficial ownership of that foreign pension fund and directed the husband to transfer to the wife his interest in that fund based on the facts of the case.

The case was appealed and came to be reheard by Mr Justice Mostyn in the Court of Appeal.

The husband argued that even if the fund is beneficially owned by him, the wife’s claim for a pension sharing order should still be dismissed for two reasons:

i) An order for pension sharing under section 24B Matrimonial Causes Act 1973 cannot be made in respect of an overseas pension; and/or

ii) The wife had adduced no evidence that such an order, were it to be made, would be enforced by the courts in India.

Mostyn J’s judgment gives detailed consideration of the provisions relating to pension sharing on divorce. The key issue for Mostyn J, however, was the basic rule of statutory interpretation which is set out in Bennion on Statutory Interpretation (6th edition), LexisNexis 2013, which states: ‘Although an enactment may be expressed in general terms, the area for which it is law (known as its extent) must exclude territories over which parliament lacks jurisdiction.’

However, Mostyn J pointed out that just because the court does not have powers over a foreign pension scheme, that does not mean there are no other routes to achieving direct sharing of a foreign pension. An alternative method is an agreement, backed by undertakings, to obtain an order in a foreign jurisdiction to split a pension in that foreign country. Prior to approving such technique, the court must be satisfied that the foreign pension provider will give effect to the deal.

Turning to the husband’s second argument, Mr Justice Mostyn accepted that the wife had not filed any evidence that a pension sharing order would be likely to be enforced in India. It was well established that a property adjustment order can in principle be made in respect of property sited overseas provided there is clear evidence that such an order would be implemented in the overseas jurisdiction. However, here, the wife did not file any evidence to confirm that a pension sharing order would be reciprocally enforced in India.

As such, the wife’s claim for a pension sharing order failed.