"Our family's lawyer once said: 'The two most expensive things a Rockefeller can afford are going into politics or getting a divorce.'" David Rockefeller
Marriage, as a family bond regulated by society and registered with the relevant state authorities, giving rise to mutual rights and obligations between the spouses, has existed for a very long time and has become the most widely accepted form of partnership between the sexes in society. Among the main reasons for formally establishing the relationship of an established couple were the desire to protect the children's interests and to secure the financial stability of each party.
Where a marriage ends, however, only couples with no minor children and no property claims against each other can avoid lengthy legal proceedings. Otherwise, in most countries of the world, a marriage can only be dissolved through the courts, after the grounds for divorce have been established, the parties' mutual claims specified, the amount of maintenance set, and so on.
For many reasons, the divorce process becomes a severe trial, carrying a heavy emotional toll, for people who until recently formed a single family and made joint decisions. Tensions run especially high where the couple's views diverge sharply on particular questions that must be resolved in the course of the divorce. These can involve disputes over where a child is to live, over child support, and the like. But the traditional sticking point in any divorce is, of course, the property the spouses acquired during the marriage — and the more property was acquired, the more bitter the disputes over dividing it can become.
Yaroslav (name changed), a citizen of the Russian Federation, met his wife Elizaveta (name changed) back in their student years; they later started a family and built not only a family relationship but also a business partnership, developing a joint venture together. Having firmly established themselves in Russia, Elizaveta and Yaroslav also opened a company in the Federal Republic of Germany. In Germany, they also bought a large, handsome house, where they stayed during their regular business trips.
Nothing, unfortunately, lasts forever, and the psychological crisis that overtook the family led Yaroslav to decide to file for divorce. The couple had no disagreement over their minor son, and Yaroslav wanted to settle the property question fairly too, offering his wife half of the property and savings the couple had accumulated over their 15-year marriage. Specifically, Yaroslav proposed leaving his wife the house and the commercial property in Russia, part of the vehicles, the bank deposits, and half the share in the beauty salon, while he alone would retain their large house and the company in Germany.
Yaroslav's wife, however, considered his property-division proposal unfair. Since a voluntary property-division agreement could not be reached, our client, once the divorce had been formally granted, had to file the above claim with a court in the Russian Federation.
Under Art. 38 of the Family Code of the Russian Federation, the division of spouses' joint property may take place either during the marriage or after its dissolution, at the request of either spouse. Claims by divorced spouses for the division of their joint property are subject to a three-year limitation period. It should be noted that where a court is hearing a dispute over the division of property located in the Russian Federation, claims relating to property located abroad may also be considered within that same proceeding.
Elizaveta, for her part, filed a counterclaim for the division of property, seeking to include additional property Yaroslav had not disclosed (in particular, the proceeds from the sale of a car, a trailer, motorcycles, and motorboats). Our client's wife also demanded that not half but the entire beauty salon be transferred to her, since it was the sole source of income for her and her child. She further asked for a recalculation of all of Yaroslav's income, so that she could be awarded the statutory half of the money and property acquired jointly during the marriage.
Yaroslav, in turn, expanded his own claims, pointing out that a sum of money in his former wife's bank accounts should also be divided, as it constituted the spouses' joint property.
During the hearing, the court found that the car our client had sold had been acquired after the family relationship had already ended, so this claim of Elizaveta's was dismissed; the other vehicles and the trailer mentioned above, however, were indeed the spouses' joint property, on the basis of which the court awarded Yaroslav's wife half of the proceeds from the sale of those vehicles and the trailer.
The court also dismissed Yaroslav's claim to divide the funds in his former wife's bank accounts, since by the time the case was heard those funds were no longer in Elizaveta's accounts.
The shares in the beauty salon were divided equally between the spouses, since the compensation Elizaveta had offered Yaroslav for half of the salon did not correspond to its actual value. The plot of land and the house located in Germany were left with our client.
Our client appealed this ruling as regards the dismissal of his claim to divide the funds in his former wife's accounts, but the ruling was upheld.
Separate court rulings established that the value of the furniture in the house located in Germany was also to be divided equally between the former spouses, and that Elizaveta was entitled to 50% of Yaroslav's share in the limited liability company registered in Germany.
The former spouses' property dispute was thus settled through the courts, with the rulings establishing the exact amount of jointly acquired property belonging to each party.
Believing the painful matter was finally closed, Yaroslav, without waiting for enforcement proceedings, transferred to Elizaveta all the sums set out in the rulings described above. Imagine his surprise, then, when — intending to sell the house located in Germany — Yaroslav learned that the plot of land had been placed under attachment through the entry of a security mortgage (German: Sicherungshypothek).
Wanting to get to the bottom of the attachment and find a way to lift it, Yaroslav came to our law firm. After reviewing the land register extract, our lawyer explained that the attachment on the plot had been imposed under a ruling of a German court, issued on the basis of a request Elizaveta had filed for an attachment on the property and the entry of a security mortgage. Yaroslav, however, had known nothing of this court ruling and had never received a copy of it. Since our client already had a prospective buyer ready to purchase his house in Germany, Yaroslav was very keen to have the attachment lifted as quickly as possible and the security-mortgage entry removed from the land register.
After carefully hearing out our client and reviewing the land register extract, our lawyer told Yaroslav that the simplest — though a rather uneconomical — solution would be to deposit with the German court the sum Elizaveta was demanding, as security, pending a final resolution of the property-division question. In that case the attachment would be lifted, and our client could deal with the house and the land as he saw fit. Elizaveta, however, had told the court that her former husband owed her more than 500,000 euros, meaning the security deposit would have to be set at that very substantial amount.
Our lawyer accordingly suggested that Yaroslav treat this option as a last resort, and instead first challenge the German court's ruling and have the attachment lifted on the grounds that it did not comply with the requirements of German law.
Drawing on years of experience and the knowledge acquired over the course of his professional career, our lawyer immediately spotted the nuances of the case and decided to make use of information the client had provided — namely, that the ruling ordering the attachment and the entry of the security mortgage had never been served on Yaroslav.
Under §§ 932(3) and 929(2)–(3) of the German Code of Civil Procedure (Zivilprozessordnung, ZPO), enforcement of an attachment order is only permitted if the corresponding court ruling is served on the debtor within one month of the ruling being issued. Enforcement can, in principle, take place even before service on the debtor, but in that case the enforcement has no effect at all if service on the debtor takes place more than one week after the enforcement and more than one month after the ruling was issued.
Important at Divorce
Under §§ 932(3) and 929(2)–(3) ZPO, an attachment order may only be enforced if it is served on the debtor within one month of being issued.
Having learned that the ruling had never been served on Yaroslav, our lawyer immediately filed the necessary request with the relevant land registry office and directly with the court that had issued the ruling described above. In this request, the lawyer pointed out that the statutory deadline under German law for serving an attachment order had already passed, yet our client had never been served with the corresponding ruling. Consequently, the security-mortgage entry recorded in the land register had become void and had to be removed. On this basis, the lawyer filed a motion to have the security-mortgage entry deleted from the land register.
Our lawyer's next step was to send the court that had issued the ruling ordering the attachment and the entry of the security mortgage a request as to the status of service of that ruling on our client. This document was requested in advance specifically to confirm the fact that the ruling had not been served on Yaroslav in time.
Together with this request, our lawyer also filed a motion for access to the relevant case file, since our client had not until then been given any of the documents to review.
Some time later, our law firm received an official document from the court stating that the ruling in question had indeed never been served on Yaroslav. A copy of this document was immediately forwarded to the relevant land registry office. Having received proof of the facts our lawyer had relied on in the motion to remove the security-mortgage entry from the land register, the land registry office decided to grant the motion.
The security-mortgage entry was thus removed from the land register within a very short time, allowing our client once again to deal freely with his plot of land and house in Germany.
Nevertheless, matters still needed to be finally settled and the ruling our client had obtained had to be formally challenged, so that Elizaveta could not seek a fresh attachment. On carefully reviewing copies of the relevant documents, our lawyer found that the basis for the request for an attachment and a security mortgage was three rulings by Russian courts dividing the property between Elizaveta and Yaroslav. In her request, the former wife had argued that an attachment on the property located in Germany was necessary, since without entering a security mortgage in the land register, enforcing the rulings issued by the Russian courts would be significantly hindered. In the view of Elizaveta's lawyer, these rulings would necessarily be enforced in Germany, since there were no grounds excluding their enforcement.
Having established all the arguments the opposing side relied on, our lawyer requested copies of every ruling issued in the Russian Federation from Yaroslav, in order to find the necessary counterarguments.
After carefully studying the documents received, our lawyer concluded that the German court's ruling, issued on the basis of the information provided by Elizaveta's representative, was unlawful for several significant reasons, and accordingly drew up a corresponding objection.
In that objection, our lawyer first pointed out that Yaroslav's former wife had claimed that, under the Russian courts' rulings, Yaroslav owed her more than 500,000.00 euros, taking into account the bank deposits, the value of the furniture in the house located in Germany, the court costs, and 50% of Yaroslav's share in the company registered in Germany, which, by Elizaveta's calculation, amounted to 400,000.00 euros.
The relevant Russian court ruling, however, expressly established that Elizaveta had no claim to that sum, since the Russian court had found it impossible to determine the precise value of the registered capital of the company registered in Germany. Moreover, our client owned only 50% of that company. On the basis of these facts, it was decided to award Elizaveta a 25% share in the company. The court set no specific sum of money that our client was to transfer to Elizaveta. This was therefore not a monetary claim at all, but a transfer in kind of a 25% company share — meaning our client's former wife had no right to demand payment of the claimed sum of 400,000.00 euros. Elizaveta had never even approached our client with a proposal to transfer 25% of the company shares into her name, and no enforcement proceedings had been initiated in the Russian Federation.
As for the sums due to Elizaveta under two other Russian court rulings as compensation for the furniture left in the house in Germany and for the vehicles, our lawyer produced evidence that Yaroslav had voluntarily transferred the required amounts to Elizaveta's bank account. The claimant had told the court, falsely, that she had not yet received that sum.
The former wife also claimed that our client had transferred more than 5 million euros of the spouses' joint property to other bank accounts for his own personal use. No evidence of any such transfers, however, was presented to the court. Moreover, one of the Russian court's rulings had found that it had not been proven that these funds formed part of the spouses' joint property, since they could well have been earned by Yaroslav during a period when the marital relationship had, in fact, already ended.
Elizaveta could not, therefore, rely on the claim that her former husband was trying to conceal funds in order to avoid paying her the half of the jointly acquired property she was owed.
The claimant also stated that Yaroslav had posted advertisements online offering the house in Germany for sale, and that Elizaveta therefore feared she would never receive the required sum from her former husband, asking the court to impose a corresponding security mortgage in the amount of 550,000.00 euros. Our lawyer, however, asked the court to consider that Yaroslav had not tried to sell his property in Germany secretly, and that the sums awarded to his former wife had already been paid — so Elizaveta had no grounds to believe our client was trying to hide the proceeds from selling the house.
Under § 917 of the German Code of Civil Procedure, an attachment on real property is only permitted where there are grounds to believe that, absent such an attachment, enforcing the judgment would otherwise be impossible or significantly more difficult. As set out above, the claimant had no grounds to believe the Russian courts' rulings would not be enforced, since the required funds had been transferred to Elizaveta voluntarily, and the award of a 25% company share to our client's former wife was not a monetary claim at all, but an in-kind transfer. There was, accordingly, no ground for an attachment on the property.
Our lawyer specifically drew the court's attention to the fact that the ruling ordering the attachment on the plot of land through the entry of a security mortgage had in fact never been served on our client. Yaroslav had learned of the attachment purely by chance, when he requested a land register extract. Under the applicable statutory rules, enforcement of that attachment ruling was therefore impermissible.
Moreover, our lawyer stressed that, despite Elizaveta's representative's unfounded claims that the Russian courts' rulings could be enforced in Germany, enforcing those rulings was in fact impossible under German law.
Under §§ 109(4) no. 1 and 110 of the German Act on Proceedings in Family Matters and in Matters of Non-Contentious Jurisdiction (Gesetz über das Verfahren in Familiensachen und in den Angelegenheiten der freiwilligen Gerichtsbarkeit, FamFG), enforcement of a foreign court's ruling is excluded where the principle of reciprocity is not observed. No reciprocal recognition of rights established under the respective laws is, however, practiced between Germany and Russia.
Moreover, no international treaty on property disputes signed by both Germany and Russia exists under which a Russian court ruling could be recognized and enforced in Germany.
The Russian court's rulings are therefore not instruments enforceable under § 917 of the German Code of Civil Procedure.
On the basis of the facts set out above, our lawyer filed a formal objection with the court against the ruling ordering the attachment on the plot of land through the entry of a security mortgage. Under § 925 of the German Code of Civil Procedure, where an objection is filed against an attachment on real property, the court must issue a final ruling on the lawfulness of the attachment. The court may confirm, modify, or set aside the attachment in whole or in part, and likewise confirm, modify, or set aside the previously set security deposit.
Our lawyer moved to have the court ruling set aside and the corresponding attachment request filed by Elizaveta's representative dismissed.
At the hearing, at which both sides were heard and all of the evidence submitted by the parties examined, the court concluded that the earlier ruling ordering the attachment had been unlawful; that ruling was accordingly set aside, and Elizaveta's request was declared unfounded. All court costs were charged to our client's former wife.
What is more, immediately after the security-mortgage entry was removed, our client succeeded in selling his house in Germany.
With this example from our law firm's practice, we wanted to highlight just how important a role a lawyer plays in litigation. It is precisely thanks to their professional expertise that a lawyer can locate not only the necessary statutory provisions, but also the information already contained in the case file that can help substantiate your position, and can draw attention to the facts most likely to convince the court that your claims are justified. Moreover, a lawyer's professional grip on a case can help prevent the opposing side from raising further legal claims down the road, since every fact in the case is carefully examined and subjected to comprehensive legal analysis.
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