The Aga Khan & The German Princess: How Long Does Divorce Take When Billions Are At Stake?

Bak-portraitThe Aga Khan, well-known spiritual leader to millions of Muslims, has finalized his divorce from a German princess after nearly a decade of legal disputes, according to a statement released last week. The Aga Khan and ex-wife, Gabriele Zu Leiningen, have ended their marriage “by consent,” say the couple’s attorneys, with a final divorce settlement reached after a Paris Court of Appeals approved a private settlement.

It has been a long road to divorce for the pair, with proceedings to terminate their marriage dating back to 2004. What took so long? The couple’s situation may be a good lesson in how to proceed in a high profile divorce when not just millions, but billions are at stake.

In the case of the Aga Khan and his ex-wife, the two married in 1998, and apparently had no prenuptial agreement. Leiningen, who took on the title Princess Inaara, gave birth to a son in 2000, their only child. A few years, the couple separated after accusations on the part of Princess Inaara that her husband had committed adultery. She reportedly paid a private detective to track the Aga Khan’s movements as traveled the word. Following the separation, Princess Inaara moved to Great Britain.

According to the UK Telegraph:

What followed was a 10-year legal cold war which began in Britain and was billed as potentially the most expensive divorce case in history.

Experts predicted that the Aga Khan could face a pay out of up to half a billion pounds. But when the case collapsed in Britain it moved across the Channel to France, where divorce settlements are typically far lower. [The Aga Khan resides for most of the year in France.]

A French court initially awarded Princess Inaara £10.3 million [US$17 million] but a higher court in 2011 raised that figure to £54 million [US$90 million]. While it was by far the largest divorce settlement in French history, the Aga Khan was generally considered to have got off lightly.

However, in a move that surprised many, the billionaire philanthropist announced later that year he was challenging the ruling.

The decision not only drew out proceedings that had already stretched for seven years, but raised the risk that if the case deadlocked and an agreement not reached, the Aga Khan and Leiningen would remain married.

What finally happened? What probably should have happened in the first place. Rather than leave the decision on how to divide marital assets to a judge, the attorneys for the Aga Khan and Leiningen began meeting out of court to work out a private settlement negotiation. Within a year of first beginning these talks, a confidential settlement was reached, and only needed to be nominally submitted to the Court for a final stamp of approval. The terms of the settlement will now remain unknown. Lawyers for both sides refused to disclose the details, saying only that the marriage “ends by consent.”

In the United States, and here in New Jersey, divorcing couples have the same options for out-of-court negotiations and completely confidential proceedings and settlement terms. For high-profile couples with much on the line, this kind of privacy can be invaluable. Without public scrutiny, it is often easier to find terms that both parties can personally accept. Had this divorce been negotiated from the start, or if the couple had used mediation, chances are they never would have faced a battle in court — or a battle in the press.