We have previously reported that Singapore Court of Appeal has held that it will normally enforce prenuptial agreements or other marital agreements, at least if they were entered into in a foreign jurisdiction under whose law they are valid.

The Court determined in the case of TQ v TR, [2009] SGCA 6 (Feb. 3, 2009) that the Singapore courts should accord “significant (even critical) weight” to the terms of a prenuptial agreement between foreign nationals that is governed by and valid according to a foreign law, unless its terms violate the public policy of Singapore.

Now, in AFS v AFU, [2011] SGHC 52 (7 March 2011), the Singapore High Court has followed the ruling in TQ v TR but has refused to enforce a Deed of Separation entered into in Singapore on the ground that the husband had violated an obligation to make full disclosure of his assets and expectancies before the parties had signed the Deed.

One year after the Deed was executed the husband’s company granted him a stock option of great value. The Court determined that the husband had had an expectancy of receiving the stock option prior to the date of the deed and that he had failed to disclose it to his wife.

The Court explained that the decision in TQ v TR held that an agreement between parties “cannot be enforced in and of itself”. The terms of an agreement would only constitute one of the factors that the court should take into account in arriving at its decision as to the proportions in which the matrimonial assets concerned are to be distributed. Even if prima facie the court would not lightly set aside an agreement between parties, the court has liberty to decide that an agreement ought not to apply if the court does not consider it just and equitable.

Applying those considerations the Court awarded the wife 25% of the value of the undisclosed assets.

Thus, the rule in Singapore is that financial agreements between spouses (or spouses-to-be), while they might be afforded decisive weight in appropriate circumstances, are always subject to judicial scrutiny. Section 112 of the Singapore Women’s Charter requires the Singapore courts to order the division of matrimonial assets “in such proportions as the court thinks just and equitable”. Thus, although financial agreements are most significant there are not mechanically enforceable in Singapore.

It also seems most likely that the Singapore courts will be influenced significantly by cases to be handed down in England under the authority of the English Supreme Court case of Radmacher.