Britain's Court of Appeal has ruled that a pre-nuptial agreement made overseas is still valid in Britain, a decision that could have far-reaching implications for those going through divorce.

In a high-profile case involving a German heiress who was married to a French investment banker, the three-judge panel ruled on Thursday that the agreement, signed in Germany before the couple married in London, was valid under English law.

"The Court of Appeal, in a carefully reasoned, thoroughly modern judgment, has enabled English matrimonial law to catch up with the rest of the world," Ayesha Vardag, a solicitor for Katrin Radmacher, the German heiress, said after the ruling.

"From today, grown-ups can agree in the best of times what will happen in the worst of times."

Radmacher, 40, married Nicolas Granatino in 1998, a few months after signing a pre-nuptial arrangement in which they agreed that he would get nothing if they divorced.

Their marriage began to break down in 2003, after Granatino, 38, gave up his high-paying job working in emerging markets for JP Morgan to become a biotechnology researcher at Oxford University earning 30,000 pounds ($50,000).

"When we met and married, Nicolas and I were broadly on an equal footing financially," Radmacher said in a statement released after the ruling.

"He too is an heir to a multi-million pound fortune and when we met was an investment banker earning up to 330,000 pounds a year. The (pre-nuptial) agreement was at my father's insistence as he wanted to protect my inheritance.

"I am delighted that the court accepts that the agreement Nicolas and I entered into as intelligent adults before our marriage should be honoured."

WIDE IMPLICATIONS

Radmacher, whose father works in the paper industry, earns an income of around 2 million pounds a year from her assets, which are worth 54 million pounds, according to court documents, although she is expected to inherit up to 100 million pounds.

In a lower court ruling last year, Granatino had originally been awarded 5.9 million in the divorce, prompting Radmacher's appeal. Radmacher has, however, agreed to pay her ex-husband's debts of 700,000 pounds and provide him with a house and maintenance until the youngest of their two daughters turns 22.

Divorce and family lawyers said the court's decision could have far-reaching implications.

"In light of this decision, it would be foolhardy for any clients entering a pre-nuptial agreement to assume that they will not be held to the terms," said Emma Hatley, a partner at Stewarts Law LLP.

"For the financially disadvantaged party they must think very carefully, having taken specialist advice, on the rights they are potentially giving up."

Jeffrey Nedas, a forensic matrimonial accountant, said: "I expect to see an upsurge in prenuptial agreements where one or both parties are wealthy individuals or members of wealthy families."

Granatino was not immediately available for comment, but his solicitors indicated that he would seek permission to appeal the decision to Britain's highest court, the House of Lords.