The Judicial Committee of the Privy Council ruling on Wednesday came in the case of Americans Roderick and Marcia Macleod, who live on the Isle of Man, a British territory.

The effect of the ruling, which endorsed the terms of an agreement made eight years after the wedding, is that Mrs Macleod will get a settlement worth 2.2 million pounds (S$4.8 million) instead of the 5 million pounds she had sought.

Some lawyers had hoped that the case would result in validating prenuptial agreements, but the court said it could not reverse the rule that such agreements are contrary to public policy.

Last year, the Court of Appeal expressed concern about big-money divorce settlements being won in London's courts, but it nonetheless affirmed the biggest of them all - 48 million pounds to Beverley Charman, ex-wife of insurance tycoon John Charman.

In its ruling, the Court of Appeal expressed some support for prenuptial agreements. 'Should not the parties to the marriage, or the projected marriage, have at the least the opportunity to order their own affairs otherwise by a nuptial contract?' the Court of Appeal said.

The Judicial Committee, which ruled on the Macleod case, is the highest appeal court for British territories, but its ruling will also be recognised by English and Welsh courts.

'There is an enormous difference in principle and in practice between an agreement providing for a present state of affairs which has developed between a married couple and an agreement made before the parties have committed themselves to the rights and responsibilities of the married state purporting to govern what may happen in an uncertain and unhoped for future,' the court said in its written judgment.

The Macleods married in Florida in 1994, the second marriages for both.

They had a prenuptial agreement, made on their wedding day, but made subsequent agreements in 1997 and then in 2002, when the marriage was breaking down.

The Judicial Committee noted that prenuptial and postnuptial agreements have been declared valid by the Supreme Court in Florida in a 1970 ruling.

The British ruling described prenuptial agreements as 'the price which one party may extract for his or her willingness to marry'.

The court said it was not possible for it 'to reverse the long-standing rule that ante-nuptial agreements are contrary to public policy and thus not valid or binding in the contractual sense.'

However, the court added, 'there is nothing to stop a couple entering into contractual financial arrangements governing their life together, as this couple did as part of their 2002 agreement'.

'The 2002 agreement was a valid and enforceable agreement, not only with respect to the arrangements made for the time when the parties were together, but also with respect to the arrangements made for them to live separately,' the court ruled.

'However, the latter arrangements were subject to the court's powers' to amend them, and that could not be nullified by any agreement the couple made. -- AP