Claim No: CFI 004/2023

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF APPEAL

BETWEEN

ZUZANA KAPOVA

Claimant

and

(1) MILOSLAV MAKOVINI
(2) PHARM TRADE HOLDING LTD

Defendants

and

MR. SEBASTIAN KAPA

Third Party

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ORDER WITH REASONS OF H.E. CHIEF JUSTICE WAYNE MARTIN

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UPON the settlement agreement between the parties (the “Settlement Agreement”) executed on 13 January 2026 providing, among other things, for the Claimant to pay the First Defendant the sum of EUR 1,000,000 (the “Settlement Sum”) in three instalments of EUR 400,000, (the “First Instalment”) EUR 300,000 and EUR 300,000 respectively, with the First Instalment falling due within fourteen days of the date of the execution of the Settlement Agreement, and, in the event of default in payment of the First Instalment, for the Settlement Sum to fall due at the election of the non-defaulting party (the “Accelerated Settlement Sum”) and for the stay of existing proceedings to be lifted in that event

AND UPON the Consent Order dated 14 January 2026 staying all further proceedings in this action with immediate effect and granting the parties liberty to apply (the “14 January Order”)

AND UPON the Defendants’ Application No. CFI-004-2023/20 dated 3 February 2026 (the “Application”), to lift the stay of proceedings due to the failure of the Claimant to pay the First Instalment and for an order that the Claimant pay the First Defendant the Accelerated Settlement Sum forthwith (the latter being the “Immediate Judgment Application”)

AND UPON hearing counsel for the Claimant and counsel for the Defendants at the Application Hearing held before H.E. Justice Sir Jeremy Cooke on 14 April 2026

AND UPON H.E. Justice Sir Jeremy Cooke providing an ex tempore decision in favour of the Defendants (the “Decision”)

AND UPON the Claimant’s oral application for permission to appeal the Decision (the “Initial PTA Application”)

AND UPON the Order with Reasons of H.E. Justice Sir Jeremy Cooke dated 29 April 2026: (i) granting the Immediate Judgment Application; (ii) entering judgment for the First Defendant against the Claimant at paragraphs 3, 4, 5 and 6; and (iii) dismissing the Claimant’s Initial PTA Application (the “29 April Order”)

AND UPON the Claimant’s Appeal Notice dated 20 May 2026 seeking renewed permission to appeal the Decision (the “Renewed PTA Application”)

AND UPON the Claimant’s Application No. CFI-004-2023/21 dated 20 May 2026 seeking a stay of execution of paragraphs 3, 4, 5 and 6 of the 29 April Order pending determination of the Renewed PTA Application (the “Stay Application”)

AND UPON the Order of H.E. Chief Justice Wayne Martin dated 23 June 2026 granting the Stay Application (the “23 June Order”)

IT IS HEREBY ORDERED THAT:

1. The Renewed PTA Application is granted in respect of all proposed grounds of appeal.

2. The 23 June Order staying the execution of paragraphs 3, 4, 5 and 6 of the 29 April Order is continued until the determination of the appeal or further order.

3. The costs of the Renewed PTA Application and the Stay Application are reserved to the Court of Appeal.

Issued by:
Hayley Norton
Assistant Registrar
Date of issue: 20 July 2026
At: 2pm

SCHEDULE OF REASONS

Summary

1. The Claimant, Ms Zuzana Kapova (“Ms Kapova”) has applied to the Court of Appeal for permission to appeal from the decision of the Judge at First Instance (the “Judge”) in which he entered judgment enforcing an agreement for the settlement of the disputes between Ms Kapova and the Defendants. It was a term of that agreement that Ms Kapova would pay the sum of EUR 1m. to the First Defendant, Mr Miloslav Makovini (“Mr Makovini”) and judgment was entered against Ms Kapova in that amount plus interest and costs. The Renewed PTA Application is made to the Court of Appeal because the Judge refused the Initial PTA Application made to him.

2. For the reasons which follow Ms Kapova has established that each of her proposed grounds of appeal has a real prospect of success. It follows that permission to appeal must be granted.

The procedural history

3. The proceedings were commenced by a Claim Form filed by Ms Kapova on 11 January 2023 (the “Claim”). The Claim was accompanied by lengthy Particulars which it is unnecessary to consider as the substantive dispute between the Parties is immaterial to the issues raised by the Renewed PTA Application.

4. The matter went to trial before the Judge over four days between 6 and 9 January 2026 (the “Trial”). However, settlement negotiations between the parties took place following the completion of the Trial, and on 13 January 2026 a Settlement Agreement was executed. The relevant terms of that agreement will be identified in due course.

5. On 14 January 2026 an order was made by consent (the “Consent Order”). The Consent Order recited the occurrence of the Trial and the fact that the Parties had entered into a full and final Settlement Agreement. Orders were made in the following terms:

6. I digress to observe that the Consent Order did not take the form of a Tomlin order in that:

7. The events which took place between the completion of the Trial and the execution of the Settlement Agreement have been recounted by Ms Kapova and her son Sebastian Kapa in witness statements filed in opposition to Mr Makovini’s application to enforce the Settlement Agreement. Mr Makovini has filed a witness statement which conflicts with the evidence provided by Ms Kapova and Mr Kapa in a number of material effects. However, as the application was decided by the Judge without cross-examination of any of the witnesses, for the purposes of this application and any appeal, the essential question is whether the witness statements provided by Ms Kapova and Mr Kapa, taken at their highest, disclosed grounds of opposition to the application for enforcement of the Settlement Agreement which should have been resolved by a trial.

8. Put another way, the Judge did not purport to resolve the differences in the evidence received on the papers, and neither would the Court of Appeal if permission is granted. Rather, the correctness of the judgment against which the appeal is brought must be assessed on the assumption that the evidence presented by Ms Kapova and Mr Kapa might be accepted at a hearing.

9. In her witness statement Ms Kapova asserted that settlement discussions took place at the premises of the DIFC Courts between approximately 1:30pm and 6:00pm on 9 January 2026 without any agreement being reached. However, later that evening she received a telephone call from Mr Makovini during which he referred repeatedly to criminal proceedings in Slovakia in a manner that Ms Kapova experienced as pressurising. According to her, Mr Makovini referred to the seriousness and consequences of the criminal proceedings in Slovakia, and their potential consequences for her and her business activities and for her son and his future career (Mr Kapa is a law student).

10. Ms Kapova states that she understood the effect of the call to be to create the impression that the criminal proceedings represented a serious continuing risk which could be averted by entry into an agreement which involved a substantial payment to Mr Makovini.

11. According to Ms Kapova, despite her misgivings in relation to settlement, a meeting took place at the St Regis Hotel Dubai on 11 January 2026. Ms Kapova, her son, Mr Makovini and his lawyer were present. According to Ms Kapova, a central feature of what was discussed was the proposition that any settlement would address all related disputes, including proceedings in Slovakia. According to her it was discussed and understood that the agreement would include an express list of relevant proceedings in Slovakia and that each party would undertake to take steps, within their respective abilities, to discontinue/withdraw proceedings which they had initiated or could control.

12. According to Ms Kapova, the criminal proceedings which had been commenced by Mr Makovini in Slovakia were repeatedly treated as “a key item within this ‘all disputes’ framework”. She asserted that those proceedings “were of decisive importance to settlement because they were presented as serious and ongoing”.¹

13. According to Ms Kapova it was agreed that a draft settlement agreement would be prepared and circulated promptly and the parties would meet again the following day.

14. At 1:16am on 12 January 2026 Ms Kapova received the first draft of the settlement agreement which was circulated by Mr Makovini’s lawyer.

15. That draft contained a clause requiring each party to take all necessary steps to procure the withdrawal, discontinuance, termination or dismissal of all proceedings currently filed or pending in Slovakia against the other party. The draft also contained a clause releasing any claims that any party may have against any other party arising out of the proceedings in the DIFC Courts, and in respect of proceedings in Slovakia specifically identified in the draft agreement, including “criminal case no. KRP-44/2VYS-PO-2022”.

16. Ms Kapova was not happy with the amount of the payment proposed by Mr Makovini and instructed her lawyers to prepare a counter proposal. That counter proposal was circulated by Ms Kapova’s lawyers in the form of a draft deed later on 12 January 2026. That draft contained a clause requiring all parties to withdraw proceedings which had been commenced against the other party in Slovakia or any other jurisdiction in similar terms to the clause prepared by Mr Makovini’s lawyers. The revised draft also contained a clause by which each party released the other from various claims, including the claims made in the DIFC proceedings, and the four proceedings in Slovakia identified by their case numbers and names, including “criminal case no. KRP-44/2VYS-PO-2022”.

17. Ms Kapova asserted that at this time she had no knowledge of any decision discontinuing the criminal proceedings in Slovakia in January 2025. She asserted that neither she, nor her son, nor her legal representatives were advised of their discontinuance until after the settlement agreement had been executed.

18. According to Ms Kapova another meeting to discuss settlement took place around 7pm on 12 January 2026 at a restaurant in Dubai. She contended that the meeting took place in the context of the repeated emphasis which had been placed on the criminal proceedings in Slovakia and their potential consequences and the repeated references to her son and his future and the pressure which was being placed upon Ms Kapova to come to a quick settlement. After discussion Mr Makovini indicated that he would accept EUR 1m. by way of settlement. Ms Kapova asserted that she agreed to that figure as a result of the pressure which had been placed upon her, in which the discontinuance of the criminal proceedings pending in Slovakia and the desire to protect her son’s future were material influential factors.

19. The settlement agreement was executed on the morning of 13 January 2026. The parties to the agreement are all the parties to these proceedings.

20. Clause 3 of the agreement provided that Ms Kapova agreed to pay Mr Makovini EUR 1m. and Mr Makovini agreed to pay Ms Kapova a sum of up to EUR 1m. payable from his share of net profits arising from future work jointly performed by the parties until such time as the total sum of EUR 1m. had been paid to Ms Kapova. The clause provided that the amount to be paid by Ms Kapova was to be payable in three instalments – the first of EUR 400,000, being payable within 14 calendar days of execution of the agreement, a second instalment of EUR 300,000 payable on or before 30 April 2026 and a third instalment of EUR 300,000 payable on or before 30 September 2026.

21. Clause 4.1 of the agreement is material to the issues in the Renewed PTA Application. It provides:

22. Clause 5.1 of the agreement requires each party to take all necessary steps to “procure the withdrawal, discontinuance, termination, or dismissal with prejudice (where legally permissible) of all judicial, arbitral, administrative, criminal, regulatory, or investigative proceedings of any nature whatsoever, whether current or pending, in Slovakia and/or any other jurisdiction”.

23. Clause 8 of the Agreement provides full releases by all parties against each other subject to, inter alia, payment of the settlement amount in accordance with clause 3. Clause 8.2 defines the released claims as including the DIFC proceedings and the four proceedings in Slovakia referred to in the draft agreements, including “criminal case no. KRP-44/2VYS-PO- 2022”.

24. Clause 8.3 provides:

25. Clause 8.4 provides:

“In the event of any failure by any Party to comply with any provision of this Agreement, no release under this Clause 8 shall take effect, and the non- defaulting Party shall be entitled to pursue all rights, remedies, and enforcement actions available to it, including before the courts of the Dubai International Financial Centre and any other competent jurisdiction.”

26. Clause 11.8 is to similar effect. It provides:

“For the avoidance of doubt, no release under Clause 8 shall take effect, or shall continue to have effect, in the event of a material breach of this Agreement by any Party.”

27. Clause 15 of the Agreement provides:

“This Agreement constitutes the entire agreement between the Parties and supersedes all prior agreements, negotiations, correspondence, discussions, promises, assurances, warranties, representations, and understandings, whether written or oral, relating to its subject matter.”

28. Clauses 2.2 and 2.3 of the Agreement provide:

29. Ms Kapova asserted that shortly after signing the Agreement, Mr Makovini made remarks in Slovak to the effect that he would “let us read” an investigator’s decision and criticised the reasoning of that decision. He also referred in general terms to having pursued or considered further steps or complaints. According to Ms Kapova, these remarks surprised her because the criminal proceedings in Slovakia had been treated during negotiations as ongoing and central to the context of her assessment of the risks if she did not settle. She states that there was no time to explore these remarks further at that meeting in any detail.

30. Another meeting was held on 17 January 2026 during which Ms Kapova and Mr Makovini discussed the opportunities for future co-operation. During that meeting, Ms Kapova requested Mr Makovini to send her the investigator’s decision to which he had referred on 13 January 2026. Later that day Mr Makovini sent Ms Kapova the decision by the investigator in Slovakia. When Ms Kapova reviewed the decision, she saw that it was dated 16 January 2025 and recorded that the criminal proceedings had been discontinued at that time. She considered that this was a fundamental turning point in her understanding of the context in which settlement had occurred, because throughout the settlement negotiations the criminal proceedings had been treated as ongoing and serious.

31. Between 17 and 27 January 2026, Ms Kapova reviewed the decision of the investigator carefully and sought advice with respect to its consequences.

32. On 27 January 2026 Ms Kapova wrote to Mr Makovini raising a number of issues with respect to their ongoing relationship under the terms of the Settlement Agreement. In that context she wrote:

33. Mr Makovini replied to that letter by email on 27 January 2026. He wrote:

“Withdrawal of Proceedings: Clause 5.1 provides a two-month window for the withdrawal and closure of proceedings. We are only two weeks into this period, and I have already taken significant steps, including sharing the official decision stopping your criminal case via WhatsApp on 17 January — a document you noted you did not previously have — and engaging with legal counsel regarding the procedural steps to withdraw the civil proceedings in Slovakia.”

34. Ms Kapova replied by email on 28 January 2026, in which she wrote:

35. In her statement Ms Kapova asserted:

36. Mr Kapa asserted in his witness statement that he was at home with his mother on the evening on 9 January 2026 when she received a telephone call from Mr Makovini. As she activated the loud speaker function on her phone, he heard the call in full. Mr Kapa asserted that Mr Makovini was placing pressure on his mother during the call and referred to criminal proceedings and other proceedings in Slovakia and to the potential consequences of those proceedings if settlement was not reached.

37. According to Mr Kapa, Mr Makovini said words to the effect that Mr Kapa’s professional career could be negatively affected and that he would not be able to work as a lawyer.

38. Mr Kapa also asserted that during the meeting on the evening of 12 January 2026 Mr Makovini again referred to the Slovak criminal proceedings and their potential consequences, including the consequences for Mr Kapa personally.

39. Mr Kapa corroborates his mother’s evidence to the effect that shortly after the execution of the Settlement Agreement, Mr Makovini made statements to the effect that the Slovak criminal proceedings had already been discontinued and that he would allow Ms Kapova and Mr Kapa to read the relevant decision. Mr Kapa asserts that he was surprised by this, because during the preceding days the criminal proceedings in Slovakia had been repeatedly referred to as a serious and continuing issue. Mr Kapa asserts that the criminal proceedings in Slovakia were repeatedly referenced during the settlement discussions including during the telephone call on 9 January and the discussions on 11 and 12 January 2026 and formed an important part of the context in which settlement was being discussed.

40. Ms Kapova also relied upon a report prepared by a Slovakian law firm, Sonderlich law firm, in her opposition to the application to enforce the Settlement Agreement. That report includes a general description of criminal procedure in Slovakia. The author expressed the view that if the prosecutor discontinued criminal proceedings the decision was final, although there is a capacity to appeal against the discontinuance within three working days. However, if that course is not followed the only avenue available for review of the decision of the prosecutor is a request for review by a higher prosecutor’s office. An application for such a review has no effect on the decision to discontinue the proceedings unless and until the review is upheld.

41. According to the Sonderlich report, if the application for review is unsuccessful, the only potential remedy is an application to the Constitutional Court of the Slovak Republic on the basis of violation of human rights.

42. The author of the report contends that Mr Makovini’s motion to the General Prosecutor’s Office has not been decided, and that a petition to the Constitutional Court cannot be brought until the Prosecutor’s Office has made its decision.

43. In the opinion of the author of the report, the criminal proceedings were finally discontinued on 16 January 2025 and the steps taken by Mr Makovini to try and resuscitate those proceedings had not had any effect.

The Judge’s decision

44. After referring to clause 4.1 of the Settlement Agreement, the Judge observed:

“4. On its proper construction, it seems to me to be absolutely clear that Clause 4.1 entitled a performing party in the event of non-performance by the other party to apply to lift the stay and to seek enforcement of the Settlement Agreement. That is made clear in my judgment by the use of the words "and/or." On its proper construction, the First Defendant, who I shall refer to as Mr. Makovini, was entitled to lift the stay and proceed with the claim or counterclaim and/or seek enforcement of the Settlement Agreement. Those words, "and/or," are capable of only one meaning. They enabled him to seek enforcement of the Settlement Agreement in conjunction with lifting the stay. Now, although there was no express term in the stay order that it could be lifted for the purpose of enforcing the Settlement Agreement, the effect of reading those two documents together, the Consent Order and the Settlement Agreement, was exactly the same as if the stay order had so provided. As a matter therefore of agreement between the parties, and as a matter of procedure, the court is enabled to lift the stay and to enforce the Settlement Agreement in exactly the same way as if a formal Tomlin order had been made which provided for a stay save for the purpose of enforcement of the Settlement Agreement.”²

45. The Judge noted submissions made on behalf of Ms Kapova to the effect that issues of fact arose in relation to the validity and enforceability of the Settlement Agreement which were not capable of determination by the Court on a summary basis. The Judge noted the submission that the application for enforcement of the Settlement Agreement was fundamentally misconceived because the settlement was contractual in nature and could not be turned into an application for immediate judgment simply by lifting the stay.

46. The Judge rejected those submissions observing that if there were no material issues of fact to be determined and the claim was valid on the face of the Settlement Agreement, the Court could enforce it by giving judgment for the settlement sums contained in it.

47. I digress to observe that this conclusion appears to be based upon the Judge’s conclusion that the Consent Order, read with the Settlement Agreement, was, in effect, a Tomlin order.

48. The Judge referred to the terms of the Settlement Agreement which precluded any factual dispute arising out of the discussions, negotiations, misrepresentations or mistaken assumptions which led to the Settlement Agreement, acknowledging that those provisions would be ineffective if there was case of fraud. The Judge noted that there had been a suggestion of such a claim in the skeleton argument on behalf of Ms Kapova but expressed the view that the evidence of Ms Kapova and of her son was not of any misrepresentation at all, let alone a fraudulent one, but rather, a claim of non-disclosure.

49. The Judge expressed the view that the evidence produced by Ms Kapova and her son amounted to the assertion that Mr Makovini laboured the detrimental effect that the criminal proceedings in Slovakia could have on Ms Kapova, her business and her son’s career but did not provide evidence of any representation with respect to “the shape of any criminal proceedings … or whether they were at any particular stage, or even that they were in fact current in the sense of being then in being”.³

50. The Judge referred to Mr Makovini’s evidence to the effect that he had sought a review of the prosecutor’s decision not to proceed with the prosecution and had applied to the Constitutional Court and observed that those challenges were in existence at the time. The Judge acknowledged that on the face of the material before him, those steps had no suspensory effect on the decision to discontinue the criminal proceedings which were “rightly said” to be “no longer in existence”. However, in the Judge’s view, the steps that Mr Makovini had taken to re-open the proceedings meant that he had to take steps to bring his efforts to re-open the proceedings to an end.

51. On the Judge’s view of the evidence, the allegations or suggestions of misrepresentation could not be made good on Ms Kapova’s own evidence.

52. The Judge expressed the view that the terms of the Settlement Agreement made it clear that there could be no relevant or material issues of fact which could invalidate Mr Makovini’s claim under the Settlement Agreement.

53. In the Judge’s view the obligations imposed by clause 5.1 of the Settlement Agreement upon Mr Makovini were limited to taking steps to withdraw his application for review by the District Prosecution Office and his application to the Constitutional Court.

54. The Judge then referred to clauses 2.2 and 2.3 of the Settlement Agreement, which he considered excluded the prospect of raising issues of fact which could disentitle Mr Makovini from the payments which he sought. The Judge also relied upon clause 15 of the Agreement to sustain the same conclusion.

55. After referring to the provisions of the Agreement relating to default in payment, the Judge concluded that they had the effect that the entire amount due from Ms Kapova to Mr Makovini was due. He therefore entered judgment against Ms Kapova in the amount of EUR 1m., plus interest in the amount of EUR 17,950.68, and further ordered Ms Kapova to pay Mr Makovini’s costs assessed in the amount of AED 54,000.

Permission to appeal – legal principles

56. RDC 44.117 provides:

57. RDC 44.5 requires that an appellant obtain permission to appeal to the Court of Appeal except where the appeal is against a committal order.

58. RDC 44.19 provides:

59. RDC 44.19 provides that permission to appeal may only be given where the appeal would have a real prospect of success or there is some other compelling reason why the appeal should be heard.

60. In the context of an assessment of the prospects of success “real” means realistic rather than fanciful and involves the same test as is applied in applications for immediate judgment.⁴

61. A real prospect of success does not mean a probability of success, but more than mere arguability.⁵

62. “Some other compelling reason why the appeal should be heard” may include the public interest in clarifying the meaning and scope of relevant practice and provisions of DIFC and wider UAE law.⁶

63. It is established that “real” in the context of an assessment of the prospects of success means realistic rather than fanciful, applying the same test as is applied in an application for immediate judgment.⁷

64. It is also established that a real prospect of success does not mean a probability of success, but more than mere arguability.⁸

65. Accordingly, in order to obtain the grant of permission a prospective appellant needs to establish more than the proposition that the proposed appeal is reasonably arguable – rather, it must be established that there is a real prospect of success.⁹

66. When a renewed application made to the Court of Appeal is refused, it is appropriate for the Court to provide reasons which adequately explain the reasons why permission has been refused. The adequacy and extent of those reasons will be informed by the fact that the refusal of permission is final and conclusive and determines the issues the subject of the appeal.

67. On the other hand, when a renewed application for permission to appeal is granted, the reasons for the grant can and should be expressed more briefly, and any views expressed should be expressed and read as provisional, on the basis that a different view might well be formed following the consideration of the fuller argument which will be presented at the hearing of the appeal. Any views expressed in these reasons should be read and construed on that basis. Further, the reasons for granting permission in respect of grounds of appeal will be expressed economically, not only because the determination of the issue raised by the ground must await the hearing of the appeal but also to limit the prospect that a party might consider that a member of the Court of Appeal does not retain an open mind in relation to any of the issues in the appeal.

Ms Kapova’s witness statement in support of the application

68. Ms Kapova has filed a witness statement in support of her Renewed PTA Application. In part of that statement she augments and attempts to explain the evidence given in the witness statement which she provided in opposition to the application for enforcement of the Settlement Agreement. Other parts of her statement advance arguments in support of her application.

69. As there has been no application to adduce additional evidence in support of Ms Kapova’s appeal, I will disregard that part of her statement which contains assertions of fact. I will treat that part of the statement which advances argument as submission.

The grounds of appeal

70. There are four grounds of appeal, which can be summarised as follows.

Ground 1

The Judge erred in characterizing Ms Kapova’s case as one of “non-disclosure and assumption” when her claim was that Mr Makovini had made a positive misrepresentation to the effect that the criminal proceedings in Slovakia were extant and capable of being withdrawn.

Ground 2

The Judge erred by entering judgment without trial when there were material disputes of fact which included issues turning upon the credibility of witnesses.

Ground 3

The Judge had no jurisdiction to grant judgment enforcing the Settlement Agreement because the order made by consent was not a Tomlin order and there are issues with respect to the proper interpretation of the Settlement Agreement.

Ground 4

The Judge erred by dismissing Ms Kapova’s claim to set aside the Settlement Agreement on the basis of economic duress because of clause 2.2 of the Settlement Agreement when that clause would fall with the rest of the Agreement if vitiated by economic duress.

71. It is convenient to deal first with ground 3, which concerns the question of whether the Court had power to adopt the procedural course which was taken, and if so, whether it was appropriate to exercise that power. Grounds 1, 2 and 4 can then be considered collectively, as they are different aspects of the general question of whether the Judge erred by, in effect, entering immediate judgment on the claim for enforcement of the Settlement Agreement.

The procedural course followed and the proper construction of the Settlement Agreement

Ms Kapova’s submissions

72. On behalf of Ms Kapova it is submitted that the Judge erred by treating the Consent Order, read with the Settlement Agreement as being “exactly the same as if a formal Tomlin order had been made”. It is submitted that a Tomlin order requires that the Settlement Agreement be attached to the consent order, which is generally in the following terms:

“And the parties having agreed to the terms set forth in the schedule hereto, it is ordered that all further proceedings in this action be stayed except for the purpose of carrying such terms into effect. Liberty to apply as to carrying such terms into effect.”

73. It is submitted that the jurisdiction of the Court to enforce the Settlement Agreement can only derive from the terms of the consent order made by the Court. Ms Kapova relies upon Green v Rozen¹⁰. ">¹⁰ for the proposition that a settlement agreement cannot, of itself, confer jurisdiction upon the Court – that can only be done through an order of the Court. In the absence of such an order, the only remedy for alleged breach of the Settlement Agreement is the commencement of fresh proceedings for enforcement of the Settlement Agreement.

74. Ms Kapova submits that the Consent Order was a bare stay with liberty to apply, and contained no scheduled settlement agreement or any provision entitling the parties to enforce that Agreement in the stayed proceedings. It is submitted that the failure to make an order in Tomlin terms cannot be inadvertent given that the Consent Order was drafted by an international law firm. Ms Kapova submits that the parties must be taken to have chosen to not adopt a Tomlin structure and it was an error for the Judge to treat the parties as if they had adopted such a structure.

75. On behalf of Ms Kapova it is further submitted that the Judge erred in his construction of clause 4.1 and in particular, erred in holding that the words “and/or” in that clause entitled Mr Makovini to seek enforcement of the Settlement Agreement in these proceedings. It is further submitted that whatever be the proper construction of clause 4.1 of the Agreement, it is the terms of the Consent Order which matter, and they do not confer any jurisdiction upon the Court with respect to the enforcement of the Settlement Agreement.

Mr Makovini’s submissions

76. On behalf of Mr Makovini it is submitted that the Judge was correct to read the Consent Order and the Settlement Agreement together as having the same effect as a Tomlin order. It is submitted that Green v Rozen should be distinguished because in that case no order was made by the Court at all. It is further submitted that “the Settlement Agreement resolved the proceedings” and the Consent Order subsequently obtained from the Court preserved the proceedings by staying them with liberty to apply, implicitly suggesting that the liberty would relate to the enforcement of the Settlement Agreement.¹¹

77. It is further submitted that because the proceedings remained on foot, there is no reason why they could not be used as a vehicle for obtaining immediate judgment on the Settlement Agreement. It is further submitted that requiring Mr Makovini to commence fresh proceedings to enforce the Settlement Agreement would have served no substantive purpose because, as the Judge found, Ms Kapova had no prospect of defending such proceedings.

Analysis

78. In common law jurisdictions such as England and Australia, two distinct categories of agreement for the compromise of a claim are recognised. The first is an agreement pursuant to which the parties immediately release each and all of the claims made in the substantive proceedings in return for the rights and obligations created by the Settlement Agreement. The second category of compromise is an agreement by which the release of the claims in the substantive proceedings is conditional upon the performance of the Settlement Agreement. In the former category of compromise, in the absence of a Tomlin Order made by consent, the only remedy available to a party aggrieved by an alleged breach of the compromise agreement is the commencement of fresh proceedings for the enforcement of that agreement. Fresh proceedings must be commenced because the claim depends upon an entirely separate cause of action which had not accrued at the time the substantive proceedings were commenced.

79. In the case of an agreement falling within the latter category, in the event of default in the performance of the compromise agreement, the innocent party may either treat the compromise agreement as at an end by reason of its breach, and proceed with the substantive claims on the basis that the condition upon which the releases of those claims depended had not been satisfied, or commence proceedings for the enforcement of the compromise agreement.

80. However, the doctrine of election prevents a party from doing both of those things. Resumption of the prosecution of the substantive proceedings is fundamentally inconsistent with the continued operation of the compromise agreement and would be considered an unequivocal election to rescind the compromise agreement by reason of its breach. On the other hand, the commencement of proceedings for the enforcement of the Settlement Agreement is fundamentally inconsistent with the continued existence of the claims the subject of the substantive proceedings and would be considered as an unequivocal election to abandon those claims in favour of the rights conferred by the Settlement Agreement.

81. Mr Makovini’s submissions appear to proceed on the basis that the Settlement Agreement was of the former category, and immediately released all claims made in the substantive proceedings upon its execution. Arguably that proposition is inconsistent with the express terms of the Settlement Agreement and in particular, clauses 8.4 and 11.8,¹² which expressly provide that no release shall take effect if there is any failure to perform the compromise agreement or material breach of its terms. Those provisions arguably place the Settlement Agreement in the second category of compromise referred to above – that is, a compromise in which releases of the substantive claims are conditional upon performance of the terms of settlement. If that argument is accepted, a stay of proceedings with liberty to apply would be entirely explicable by the parties’ intention to preserve the proceedings so that they might be resuscitated in the event of failure to perform the terms of the Settlement Agreement, rather than for the purpose of enforcing the Settlement Agreement.

82. It is also arguable that the Judge’s reliance upon the words “and/or” in clause 4.1 of the Settlement Agreement is misplaced.¹³ On their face, those words would suggest that a party could have its cake and eat it too by resuming the prosecution of his or her substantive claims, and at the same time, seek enforcement of the Settlement Agreement. Arguably a construction of the Agreement which would enable those two fundamentally inconsistent courses to be taken simultaneously is so uncommercial that it cannot be taken to represent the objective intention of the parties.

83. Arguably, on the proper construction of clause 4.1 of the Settlement Agreement “and/or” should be read as “or”, giving a party confronted with a breach of the Settlement Agreement the option to either apply to the Court to lift the stay so that the substantive proceedings could be resumed, or alternatively enforce the Settlement Agreement by commencing fresh proceedings in this or any other court of competent jurisdiction.

84. Further, the contention that the Court’s jurisdiction to immediately enforce a settlement agreement in the course of proceedings relating to the underlying dispute depends upon a consent order of the Court to that effect, and in this case there is no such order, is readily arguable. The submission advanced on behalf of Mr Makovini to the effect that Ms Kapova would be in no different position if he was required to commence fresh proceedings against her to enforce the Settlement Agreement arguably fails to take account of the fact that if fresh proceedings were commenced, both parties would be required to serve Statements of their Case in relation to the enforcement of the Settlement Agreement and Mr Makovini would have been required to make an application for immediate judgment, to which Ms Kapova could have responded with perhaps more fulsome evidence than was provided in response to the application for enforcement made in these proceedings.

85. In my view ground 3 has a real prospect of success.

Grounds 1, 2 and 4

86. Grounds 1 and 4 are essentially specific aspects of ground 2, which asserts that the Judge erred by granting judgment on the Settlement Agreement on the papers when there were issues which could only be justly resolved by a trial.

Ms Kapova’s submissions

87. On behalf of Ms Kapova it is submitted that the Judge erred by construing the evidence provided by her and her son, and the documentary evidence, as going no further than asserting that Mr Makovini had failed to disclose the discontinuance of the criminal proceedings in Slovakia. Ms Kapova submits that the documentary evidence, in the form of the draft settlement agreements exchanged and the executed Settlement Agreement contain written representations to the effect that the criminal proceedings were extant, when in fact, as the Judge recognised, they had been discontinued and none of the steps taken by Mr Makovini had resulted in their resuscitation. It is further submitted that the evidence of the negotiations relating to the Settlement Agreement upon which Ms Kapova relies is to the effect that Mr Makovini made statements which were only consistent with the currency of the criminal proceedings in Slovakia. Further, as Mr Makovini denies making statements to that effect, the precise terms of what was said and by whom is submitted to be a matter which could only be properly determined by a trial.

88. It is further submitted that the evidence sustained a claim for fraudulent misrepresentation, as, on Ms Kapova’s case, Mr Makovini was well aware that the criminal proceedings had been discontinued in January 2025 but made statements both orally and in writing which were intended to create the false impression that the proceedings remained on foot and only disabused Ms Kapova of that impression after she had signed the Settlement Agreement.

89. It is further submitted that the Judge erred by relying upon clause 2.2 of the Settlement Agreement to exclude Ms Kapova’s claim to set aside the Agreement on the grounds of economic duress because, if economic duress is established at trial, the entire Settlement Agreement will be set aside, including clause 2.2.

Mr Makovini’s submissions

90. On behalf of Mr Makovini it is submitted that no error in the Judge’s analysis of the evidence before him has been identified in support of the application. It is further submitted that clause 8.3 of the Settlement Agreement expressly contemplates criminal matters which have already been withdrawn. It is further submitted that the written materials fall materially short of establishing any representation to the effect that the criminal proceedings in Slovakia remained active.

91. Mr Makovini further submits that causative loss flowing from the alleged misrepresentation has not been established and relies upon the fact that Ms Kapova did not rescind or terminate the Settlement Agreement after becoming aware of the status of the criminal proceedings in Slovakia. It is further submitted that ground 4 of the proposed appeal mischaracterises the Judge’s reasons, in that he did not treat clause 2.2 as determinative of the issue, but rather, as part of the overall factual matrix in which the Judge concluded that the evidence of economic duress did not sustain the proposition that it had a real prospect of success.

Analysis

92. It is to be remembered that the question before the Judge, and the question that would be presented to the Court of Appeal, is not whether the claims of fraudulent misrepresentation or economic duress have been made out, but rather, whether the evidence presented raises a triable issue with respect to those matters, in the sense that it discloses claims that have a real prospect of success.

93. In this context it is arguable that Mr Makovini’s reliance upon clause 8.3 of the Settlement Agreement is misplaced. Arguably the only reference to withdrawal or discontinuance of criminal proceedings in that clause occurs in a context in which it is clear that reference is being made to the circumstances in which the obligation to bring such proceedings to an end has been satisfied. Arguably the clause does not support any inference to the effect that the parties contemplated that the criminal proceedings may have already been withdrawn or discontinued.

94. Having considered the witness statements and documentary evidence that were presented to the Judge, in my view it is readily arguable that those materials, in combination, established a case appropriately determined by trial, rather than on the papers. In my view that argument has a real prospect of success.

Permission to appeal - conclusion

95. For these reasons Ms Kapova has established that each of her proposed grounds of appeal has a real prospect of success. It follows that permission to appeal must be granted on all grounds.

The stay application

96. Ms Kapova applies for a stay of the enforcement of the 29 April Order made by the Judge on the grounds that enforcement of those orders would cause serious prejudice and substantial harm whereas, the only prejudice likely to be suffered by Mr Makovini is delay in the enforcement of his judgment pending determination of his entitlement to that judgment by the Court of Appeal.

97. Mr Makovini opposes the stay on the grounds that:

98. Alternatively, Mr Makovini submits that any stay should be granted only upon condition that Ms Kapova pay the judgment sum into Court within 48 hours of the grant of the stay.

Analysis

99. It is of course accepted that the grant of permission to appeal is not, of itself, a sufficient reason to grant a stay of execution of the judgment under appeal. However, the grant of permission does constitute a finding by the Court to the effect that the appeal has a real prospect of success. In those circumstances, the question of whether a stay should be granted essentially comes down to an assessment of the balance of convenience, in the sense that the Court assesses whether the prejudice to be suffered by the Applicant if the stay is refused is greater than the prejudice to be suffered by the Respondent if the stay is granted.

100. In this case neither party has adduced any evidence bearing upon the prejudice which they would suffer if the stay is granted or refused as the case may be. Rather, each relies upon submissions as to prejudice, in the case of Ms Kapova, as to disruption to her financial affairs and potential inability to recover the judgment sum if her appeal succeeds, and in the case of Mr Makovini, in the form of delay in the enforcement of his judgment.

101. The judgment sum is a very substantial amount, especially when viewed from the perspective of an individual, such as Ms Kapova. It can be inferred that an obligation to pay that amount forthwith, whether as a result of enforcement or as a condition of the grant of a stay would be disruptive and would inevitably result in the loss of interest which may not be recoverable if the appeal succeeds. On the other hand, as interest is running on the judgment debt, Mr Makovini has the capacity to be compensated for any delay in enforcement of that debt if the appeal is dismissed.

102. There is also the uncertainty with respect to Ms Kapova’s capacity to recover funds paid pursuant to the judgment in the event that her appeal succeeds. While she has not adduced any evidence to establish the extent of that risk, neither has Mr Makovini.

103. In my view the balance of convenience favours the continuation of the interim stay which has been granted until either the determination of the appeal or the further order of the Court