The Dubai International Financial Centre (DIFC) Court of Appeal has upheld the enforcement of a settlement agreement within a stayed action, rejecting the contention that a consent order's departure from the classic Tomlin form prevented the Court from granting relief in the existing proceedings.
In Kapova v Makovini & Another, the Court dismissed the appeal and affirmed the first-instance decision in favour of Miloslav Makovini and Pharm Trade Holding Ltd. Immediate judgment on the settlement sum was upheld, while challenges based on misrepresentation and economic duress also failed.
The central controversy concerned the relationship between a settlement agreement and the procedural order recording it. The appellate decision confirms that a failure to follow the prescribed Tomlin form strictly does not, by itself, prevent the DIFC Courts from lifting a stay and enforcing the settlement in the same action.
The available account describes the ruling as the Court of Appeal's first determination of the law on Tomlin orders. It does not identify the Bench, reproduce the judgment or disclose the settlement amount, making the distinction between the reported holdings and their broader procedural significance important.
Key Highlights
Settlement enforcement upheld: The Court dismissed the appeal in Kapova v Makovini & Another and affirmed the first-instance outcome.
Non-standard form not fatal: Departure from the classic Tomlin form prescribed by RDC 36.29 did not prevent enforcement within the stayed proceedings.
Stay could be lifted: The DIFC Courts retained jurisdiction to lift the stay and enforce the parties' settlement agreement in the existing action.
Validity challenges failed: The reported decision records no particularised case of fraud and no identifiable unlawful threat supporting the challenges to the settlement.
Judgment and costs sustained: Immediate judgment on the settlement sum stood, and Makovini and Pharm Trade Holding were held entitled to their costs.
DIFC Court of Appeal rejects challenge to settlement enforcement
The appeal placed a procedural objection at the centre of an attempt to resist enforcement. The appellant argued that, because the consent order did not strictly comply with the Tomlin form prescribed by RDC 36.29, the settlement could not be enforced through the proceedings in which it had been reached.
The Court of Appeal rejected that proposition and upheld the first-instance decision. According to the published account, its conclusion was that the DIFC Courts had jurisdiction to lift the stay and enforce the agreement notwithstanding the order's non-standard form.
The account summarised the holding in these terms:
“the DIFC Courts have jurisdiction to lift a stay and enforce a settlement agreement, even where the consent order is not in strict Tomlin form”
The significance lies in the distinction between an imperfect procedural vehicle and an unenforceable settlement. The reported outcome favours substance over form, but it should not be read as dispensing with procedural rules generally. The narrower point is that the departure identified in this case did not deprive the Court of the power to grant enforcement relief within the existing action.
Dispute followed settlement reached at the end of a DIFC trial
The dispute arose after the parties reached a settlement agreement at the end of a DIFC trial. Their consent order stayed the proceedings, bringing the ongoing litigation to a procedural halt while leaving the settlement to govern the resolution they had negotiated.
A settlement reached at that stage ordinarily represents a choice to replace the uncertainty of an adjudicated outcome with agreed obligations. Its practical value depends not merely on agreement being reached, but also on whether those obligations can be enforced if performance becomes disputed.
Here, the subsequent controversy concerned the route to enforcement. The appellant's objection focused on whether the existing proceedings remained available for that purpose, given the form of the consent order. The first-instance court granted immediate judgment on the settlement sum, and that decision was challenged on appeal.
The available material does not describe the underlying trial claims, the payment timetable or the precise wording of the consent order. Those omissions limit any reconstruction of the parties' bargain. What is clear is the procedural sequence: a trial, a settlement, a consent stay, an enforcement decision and an unsuccessful appeal against that decision.
A Tomlin order is a common-law settlement mechanism that generally stays proceedings on agreed terms, with the settlement obligations typically recorded separately from the operative court order. Its purpose is to combine a negotiated resolution with a procedural route through which the parties may seek further assistance from the court.
That structure helps explain why the order's wording became important in this case. A stay pauses the litigation; it does not necessarily answer every question about the agreement's enforcement. The relationship between the stay, the settlement terms and the court's continuing powers therefore matters when a party returns for relief.
The source identifies RDC 36.29 as prescribing the relevant Tomlin form, but does not reproduce either the rule or the parties' order. It is consequently not possible to identify the exact drafting departure. The reported holding nevertheless makes clear that the departure was not treated as an automatic bar to enforcement.
For practitioners, the distinction is between a court's ability to overcome a particular objection and the desirability of avoiding that objection altogether. Clear drafting remains important: a settlement order should address the status of the proceedings and the intended enforcement mechanism. The decision offers reassurance about jurisdiction, not a reason to treat prescribed forms as optional.
Court confirms it can lift a stay and enforce the agreement in the same action
The jurisdictional question was whether the DIFC Courts could act within proceedings that had already been stayed by consent. The Court of Appeal's answer was affirmative: the stay could be lifted and the settlement enforced in that action, despite the non-standard order.
That conclusion matters because the availability of the existing action can affect the efficiency of enforcement. Requiring a party to commence separate litigation may introduce additional procedural steps before the court can address obligations arising from a settlement reached in proceedings already before it.
The ruling does not mean that every settlement can be enforced through every stayed action. The reported proposition is tied to the jurisdiction recognised in this dispute. Nor does a power to entertain enforcement eliminate the need to consider any properly advanced objection to the agreement's validity or to the relief sought.
For practitioners considering cross-border dispute resolution, that distinction is worth preserving. The procedural holding here specifically concerns the jurisdiction of the DIFC Courts under RDC 36.29 and should not be transposed automatically to domestic compromise decrees or other settlement mechanisms.
The Court of Appeal also upheld the entry of immediate judgment on the settlement sum. The appeal therefore failed not only on the procedural route to enforcement, but also in its attempt to displace the monetary judgment already entered at first instance.
The published account records this aspect of the outcome succinctly:
“the immediate judgment was properly entered on the settlement sum”
The settlement amount, currency and payment terms are not disclosed. The available material also does not identify the particular procedural provision governing immediate judgment or set out the evidence considered. It would therefore be inappropriate to reconstruct a detailed test or suggest that the judgment establishes an unconditional entitlement to immediate relief whenever a settlement is invoked.
The narrower, supported conclusion is that the judgment was properly entered in this case. Read alongside the jurisdictional holding, that outcome gives the decision practical force: the Court did not merely recognise an abstract power to enforce the agreement, but sustained the relief granted through that power. The settlement remained the basis of an effective judgment rather than requiring the successful parties to begin again.
Misrepresentation and economic duress claims fail for lack of pleaded particulars
The appellant's resistance was not confined to the form of the consent order. Arguments based on misrepresentation and economic duress were also rejected. The available account identifies the absence of a particularised fraud case and an identifiable unlawful threat as central deficiencies.
Those are distinct objections. Misrepresentation concerns the basis on which a party was induced to agree, while economic duress concerns pressure said to undermine the voluntary character of consent. Neither is established merely by showing that a settlement was unwelcome, commercially difficult or reached against the pressure of continuing litigation.
Particulars matter because the court and the opposing party must be able to identify the conduct being challenged. A fraud allegation requires more than a general assertion of wrongdoing. Likewise, a duress case must identify the alleged threat and explain why it supplies a legally sufficient basis for attacking the agreement. The report does not reproduce the pleadings or the Court's full reasoning on those questions.
The decision should therefore not be read as equating every misrepresentation claim with fraud, or as denying that settlements can be challenged on recognised grounds. It illustrates the need to plead those grounds concretely. The ruling underscores the importance of pleading fraud or economic duress with strict particularity when challenging a consent settlement.
Makovini and Pharm Trade Holding awarded appeal costs
With the appeal dismissed, Makovini and Pharm Trade Holding Ltd were held entitled to their costs. The available account does not disclose a quantified award, the basis of assessment or any deadline for payment. The reported disposition leaves the first-instance enforcement decision and immediate judgment undisturbed.
Commenting on the decision, Kartikey Mahajan, Partner at Khaitan & Co, connected the outcome to the DIFC Courts' engagement with common-law authority:
“The Court of Appeal engaged closely with established common-law authority since early 1900’s in reaching its decision, which is precisely why international parties increasingly trust the DIFC Courts to deliver predictable, principled outcomes.”
That is counsel's assessment of the ruling's institutional significance. The source does not identify the authorities considered, so their individual application cannot be examined from the available account. The operative result is nevertheless clear: the appeal failed, settlement enforcement in the existing action was upheld, immediate judgment stood and the successful respondents were entitled to costs.
Appearances: Miloslav Makovini and Pharm Trade Holding Ltd were represented at the appeal stage by Kartikey Mahajan, Partner at Khaitan & Co, appearing as lead counsel on instructions from SK Legal Consultants. He was assisted by Satjit Singh Chhabra, Principal Associate, and Pranav Krishna, Associate.
Sources
