After jurisdictional back and forth, tycoon's RM2.7b divorce may be heard in UK after all

KUALA LUMPUR, Sept 30 — Magnate Tan Sri Khoo Kay Peng will learn today if he must face his former Ms Malaysia wife’s divorce application in the UK, where he stands to lose half his estimated £500 million (RM2.75 billion) in what may be the biggest settlement in British history.

The London High Court will decide later today if it is the appropriate venue to hear the couple’s divorce, after Khoo previously sought for the case to be played out in Malaysia, where his wife, Pauline Chai, would have received a much smaller sum.

Still stuck in the preliminary stages, the case has already racked up over £2.3 million in legal fees.

Eyes are also on the case that may determine the direction of the growing number of jurisdictional tussles as more wealthy globe-trotters choose to make Britain their home.

“What’s made it such a hotly contested battle is that there is so much at stake,” Chai’s English lawyer, Ayesha Vardag, was quoted as saying by the Financial Times yesterday.

London is fast earning the title of “divorce capital of the world”, owing to decisions in divorce settlement in the English capital that reflect the equal contributions of homemakers and breadwinners in marriages.

Last month, Chai won a minor victory in Malaysia when the Federal Court here directed for the case to be returned to the London High Court to determine which legal arena will host the impending divorce battle.

Chai filed a divorce petition in London last year against Khoo, who is Malaysia’s 40^th richest man, according to the Forbes 2012 list of Malaysia’s wealthiest, citing unreasonable behaviour.

The former beauty queen had, through her lawyers, argued that the divorce proceeding should be decided in England since Chai, who has resided in England since the 1980s, is no longer a Malaysian citizen.

Chai had cited unreasonable behaviour in her divorce petition against Khoo, a major stakeholder in international brand Laura Ashley.

She has also reportedly accused the “very controlling” retail and hotel tycoon of rationing her food and forbidding her from leaving their house without his permission.

Lawyers representing Khoo — who runs international investment holding company Malayan United Industries Bhd — argued that the tycoon’s marriage with Chai took place in Malaysia and that Malaysian laws provided that the jurisdiction for any divorce proceeding is determined by the husband’s domicile.

Vardag previously accused the billionaire of “jurisdiction shopping” in his bid to bring the case to Malaysia.

Aside from Khoo and Chai, another wealthy Malaysian couple also recently went through the same jurisdiction battle, albeit with the gender roles reversed.

Top investment banker Lena Tan had sought to have her £11 million divorce from Weng Kean Choy, decided in Malaysia whereas her stay-at-home husband wanted the case to be heard in the UK.

The British Court of Appeal later decided that the divorce trial could be conducted in the UK.

But British judges are already baulking at such protracted legal wrangling over divorce jurisdictions.

“There have been concerns expressed by some judges that jurisdiction disputes between ultra wealthy take up a lot of court time and valuable and scarce resources in the family courts . . . but there isn’t a lot that they can do about it as access to justice for everyone is important,” Jeremy Posnansky, a senior British jurist, told the Financial Times.