LONDON — He’s a fabulously wealthy fashion tycoon. She’s a former Miss Malaysia with an Imelda Marcos-scale shoe fetish.
They have homes in five countries and, after 43 years of marriage, share one big problem: They can’t agree on where to get divorced.
So for the past two years, Tan Sri Khoo Kay Peng and Pauline Chai have been slugging it out in the courts, spending millions of dollars in legal fees to decide where they’ll ultimately divide the hundreds of millions left in the bank: Malaysia or England.
“A nightmare,” says the judge.
“A mess,” says her lawyer.
“A mess,” says his lawyer — citing the one point on which the two sides can actually agree.
But it’s not an unusual tangle for London. If Paris is the city of love, London has become the world capital of divorce — a global magnet for those who possess both astronomical sums of money and a burning contempt for their spouses.
Depending on your perspective, the laws here are either notoriously or gloriously favorable to the non-breadwinner — traditionally, though not always, the wife. Regardless of who made the money, courts here generally stick to 50/50 settlements and lifetime alimony payments while showing zero tolerance for hide-the-asset shell games and only limited appreciation for prenups.
The laws have been that way for years — since a 2000 case involving two dairy farmers set a precedent for equal treatment of breadwinners and homemakers. But the difference now is the phenomenal sums involved as London has emerged as a playground for Russian oligarchs, Chinese moguls and gulf sheiks.
The wealthiest Brits are part of the phenomenon, as well: Late last month, a British hedge fund manager was ordered to pay his American-born wife $530 million — reportedly the largest settlement in English history.
“People are a lot more international than they used to be, and there’s just a lot more money sloshing around,” said Timothy Scott, a prominent divorce attorney who represents Peng and counts Mick Jagger among his former clients. “There are more and more wealthy people who find it’s worth arguing over.”
Not only arguing. There’s also cunning strategizing among unhappy couples who can afford to live across multiple time zones.
“I’ve advised wives who are contemplating divorce that it’s probably a good idea to get a home in England,” Scott said. “A year’s residence is all they need.”
(Note to Russian oligarchs: If you’re luxuriating in your dacha one night and your wife starts musing about the pleasures of the English countryside, be very afraid.)
The plotting goes both ways. Ayesha Vardag, the lawyer who represents Chai and has been dubbed the Diva of Divorce by the British press, said she has simple advice for breadwinners who fear a breakup and who have a choice of jurisdictions: “Hop on the Eurostar and get over to France, where the laws are very different.”
Malaysia would do as well.
If Peng and Chai settle their divorce in their home country, she’s likely to receive only a small fraction of a fortune estimated at a billion dollars or more. If they settle here, she could get half.
“Of the two parties to a marriage, it doesn’t matter who was the breadwinner and who was the homemaker,” said Vardag, explaining the rationale behind England’s approach to divorce. “They are equal partners in a marriage, and they are entitled equally to share in the fruits of that marriage.”
Chai, a 67-year-old mother of five, has argued that the case should be heard here because her primary residence is the family’s sylvan estate outside London, where she keeps 700 pairs from her 1,000-strong shoe collection. An English court sided with her this fall and agreed to take the case.
But just weeks later, a Malaysian court sided with her husband — a major shareholder in the retailer Laura Ashley — and ruled the case should actually be heard there.
There’s no clear path for what happens next, but it won’t be pretty.
“It’s an undignified race to the courthouse door,” said Scott, Peng’s lawyer.
England’s unusually friendly treatment of the spouse who isn’t clearing big paychecks is, naturally, not terribly popular for the one who is.
Multi-million-dollar divorce settlements have brought reluctant members of the British comedy troupe Monty Python out of retirement and back on the road for tours and reunions. One member, Terry Jones, recently told the press that despite big proceeds from the shows, he may have to sell his north London mansion to keep up with the payments to his ex-wife.
Some have called for a shift to make England less of an outlier, perhaps by restricting the use of lifetime alimony payments. Many European countries — including Scotland, which has a separate legal system — offer alimony for only a few years.
“It’s all getting a bit ridiculous,” said Camilla Baldwin, a high-end London divorce lawyer who has practiced for more than two decades. “It’s a major disincentive for mothers to get back to work.”
Already, there have been subtle shifts that have made England slightly less favorable to non-breadwinners than it used to be. In last month’s $530 million settlement between British financier Chris Hohn and his American-born wife, Jamie Cooper-Hohn, for instance, she received a third of the family fortune, not half, after he argued that he had made “a special contribution” to the marriage.
Prenuptial agreements, too, have become more popular here — and more widely accepted by the courts.
“Historically, prenups were not worth the paper they were written on,” said Deborah Jeff, who handles complex divorce cases for the London-based firm Seddons.
That, she noted, is starting to change, with judges giving them much greater credence than they used to.
“But it is still a minority. Most people do not have a prenup,” Jeff said. “So I don't think we’ll lose the ‘divorce capital of the world’ title quickly.”