How does the dispute between Zuzana Kapova and Miloslav Makovini regarding alleged asset dissipation and tax optimization schemes define the scope of the current disclosure application?
The litigation centers on a complex series of allegations involving the dissipation of assets and the legitimacy of service provision agreements within a corporate structure involving the Claimant, Zuzana Kapova, and the First Defendant, Miloslav Makovini. The Claimant asserts that the First Defendant’s actions were deliberate and egregious, leading to a claim for aggravated damages. Conversely, the Defendants seek extensive document production to test the veracity of these claims, specifically targeting invoices and communications that might reveal whether the Claimant’s business entities were used to siphon funds or facilitate tax optimization schemes.
The dispute over disclosure is fundamentally a battle over the boundaries of "control" under the Rules of the DIFC Courts (RDC). The Defendants argue that the Claimant has access to documents held by related entities—specifically Pharm Trade a.s. (PTSK)—which are central to the allegations of asset dissipation. The Claimant has resisted these requests, citing the following:
Pursuant to Article 28.28 of RDC, the Claimant objects to the Defendants’ request on the grounds of irrelevance, lack of materiality, disproportionality, and breach of commercial confidentiality.
This tension between the Claimant’s desire to limit the scope of discovery and the Defendants’ need to probe the financial history of the entities involved forms the core of the current procedural impasse.
Which judge presided over the disclosure application in Zuzana Kapova v Miloslav Makovini [2025] DIFC CFI 004?
The application was heard and determined by H.E. Justice Sir Jeremy Cooke in the DIFC Court of First Instance. The order, which followed the Defendants' Application No. CFI-004-2023/14 filed on 9 September 2025, was issued on 3 October 2025. This decision is part of a broader series of procedural orders in the ongoing litigation, including Zuzana Kapova v Miloslav Makovini [2023] DIFC CFI 004 — procedural fairness for litigants in person (10 March 2023), ZUZANA KAPOVA v MILOSLAV MAKOVINI [2023] DIFC CFI 004 — procedural flexibility for litigants in person (30 March 2023), ZUZANA KAPOVA v MILOSLAV MAKOVINI [2023] DIFC CFI 004 — Consent order regarding jurisdiction challenge deadlines (06 April 2023), ZUZANA KAPOVA v MILOSLAV MAKOVINI [2023] DIFC CFI 004 — procedural variation by consent (08 May 2023), and ZUZANA KAPOVA v MILOSLAV MAKOVINI [2023] DIFC CFI 004 — procedural variation of timelines for pending applications (15 June 2023).
What specific legal arguments did the Claimant and the Defendants advance regarding the production of documents held by PTSK and other related entities?
The Defendants argued that the Claimant maintains effective control over documents held by PTSK, given that her husband, Daniel Kapova, is the Chairman of the Board and her son, Sebastian Kapova, is the 90% shareholder. They contended that these documents are essential to verify the allegations of asset dissipation and the removal of the First Defendant as Chair of the Board. The Defendants sought to compel production of accounting entries, board resolutions, and correspondence between PTSK and other entities like Selinne s.r.o. and PT Pharmacy IV.
The Claimant countered by invoking the protections of RDC 28.28, arguing that the requests were overly broad and intrusive. She maintained that she no longer holds a management role in PTSK and therefore lacks the legal authority to compel the production of its internal records. Regarding PT Pharmacy IV, she argued that while she is the sole owner, the entity has no involvement in the pleaded issues. Her position was summarized as follows:
According to Article 28.28 of the RDC, the Claimant objects to the request in its entirety on the grounds of irrelevance, lack of materiality, disproportionality, and breach of confidentiality.
She further emphasized that the requests amounted to a "fishing expedition" that would unfairly expose her wider business affairs to her opponent.
What was the precise doctrinal issue the Court had to resolve regarding the definition of "control" under RDC 28.8?
The Court was tasked with determining whether the Claimant’s disclosure obligations extend to documents held by third-party corporate entities where the Claimant has a significant familial or ownership interest but lacks formal management control. The doctrinal issue was whether "control" for the purposes of RDC 28.8 is limited to legal possession or if it encompasses a "practical test" based on the ability of a party to influence the production of documents.
The Court had to decide if the Claimant could simply state that she does not have "possession" of the documents, or if she is under a positive obligation to take active steps to obtain them from her husband and son, given the family relationship and the nature of the corporate entities involved. The Court was required to balance the principle of proportionality against the need for full disclosure to ensure the Court could properly adjudicate the pleaded issues of asset dissipation.
How did H.E. Justice Sir Jeremy Cooke apply the "practical test" of control to the Claimant’s disclosure obligations?
Justice Cooke rejected the notion that a party can avoid disclosure simply by claiming a lack of formal management authority over a related entity. He established that the Court will look beyond the corporate veil to the reality of the relationship between the parties and the custodians of the documents. The judge held that if a party can, in practice, obtain the documents, they are under an obligation to do so.
The reasoning was grounded in the necessity of transparency in cases involving allegations of asset dissipation. The judge noted that the Claimant’s family connections to the board and shareholders of PTSK made it highly probable that she could secure the requested materials. The judge’s test is articulated as follows:
If the Claimant can in practice obtain the documents, she should do so and if she is unable to obtain them on request, she must explain the position in full in a witness statement.
This requires the Claimant to move from a position of passive denial to one of active inquiry, documenting the steps taken to retrieve the information and providing a sworn account of the results.
Which specific RDC rules and legal provisions were central to the Court’s determination of the disclosure application?
The Court’s decision was primarily governed by RDC 28.8 and RDC 28.28. RDC 28.8 provides the framework for the scope of disclosure, requiring parties to disclose documents that are or have been in their control, while RDC 28.28 allows for objections based on proportionality, relevance, and confidentiality.
The Court also referenced Article 40(2) of the DIFC Law of Damages and Remedies, which the Claimant invoked to support her claim for aggravated damages. The interaction between these rules and the substantive law was critical; the Court had to determine whether the requested documents were truly relevant to the "pleaded issue" of whether specific invoices reflected genuine services or were merely a vehicle for asset dissipation. The Court scrutinized the requests against the principle of proportionality, ensuring that the disclosure process did not become a tool for unnecessary commercial exposure.
How did the Court distinguish between legitimate disclosure and "fishing expeditions" when citing precedents and applying the RDC?
The Court utilized the principle of proportionality to filter the Defendants' requests. While the Court granted the application in part, it was careful to prevent the disclosure process from becoming an unrestrained search of the Claimant’s business affairs. The Court’s reasoning highlighted that disclosure must be tethered to the specific issues raised in the pleadings.
The Court’s approach to the Defendants' request for contracts between PTSK and Selinne s.r.o. illustrates this distinction. The Court recognized that while the Defendants alleged asset dissipation, they had to show a nexus between the documents requested and the specific allegations. The Court’s refusal to grant the request in its entirety was based on the following logic:
Crucially, there is no corresponding probative value: the documents will not assist the Court in determining the pleaded issue of whether certain specific invoices reflected genuine services. Instead, the disclosure would amount to a fishing expedition into the Claimant’s wider business affairs, in violation of the principle of proportionality under RDC 28.8 and the confidentiality protections embedded in RDC 28.28.
What was the final disposition of the application and what specific orders were made regarding the Claimant’s witness statement?
The Court granted the First Defendant’s application for disclosure in part, as detailed in the Court’s conclusions and the accompanying Stern Schedule. The Claimant was ordered to disclose specific documents, including accounting entries, correspondence, and board minutes related to the alleged dissipation of assets and the removal of the First Defendant as Chair.
Crucially, the Court ordered the Claimant to file a witness statement within 21 days. This witness statement must:
1. Detail the steps taken to obtain documents from PTSK, her husband, and her son.
2. Explain the results of these searches.
3. Address the status of documents held by PT Pharmacy IV and whether it received any assets from PTSK.
4. Explain why the Third Party, Sebastian Kappa, is said to have no relevant custodial documents.
The costs of the application were reserved, pending further developments in the disclosure process.
How does this ruling change the landscape for litigants in the DIFC Courts regarding disclosure from related entities?
This ruling reinforces a strict, practical approach to disclosure that prevents litigants from hiding behind corporate structures or familial relationships to withhold evidence. Practitioners must now anticipate that the DIFC Courts will look at the "practical reality" of a party’s influence over related entities. If a party has the ability to request documents from a company owned or managed by family members, they will be expected to do so.
The decision serves as a warning that a mere assertion of "no control" is insufficient. Litigants must be prepared to provide a detailed, sworn witness statement outlining the specific steps taken to locate and retrieve documents. Failure to do so will likely result in adverse inferences or further, more stringent court orders. This approach aligns with the DIFC Courts' broader commitment to efficient, transparent litigation, where the focus remains on the substance of the pleaded issues rather than procedural obfuscation.
Where can I read the full judgment in Zuzana Kapova v Miloslav Makovini [2025] DIFC CFI 004?
The full text of the Order with Reasons can be accessed via the official DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0042023-zuzana-kapova-v-1-miloslav-makovini-2-pharmtrade-holding-ltd-3-sebastian-kappa or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-004-2023_20251003.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | No specific external precedents cited in the provided excerpt. |
Legislation referenced:
- Rules of the DIFC Courts (RDC) 28.8
- Rules of the DIFC Courts (RDC) 28.28
- DIFC Law of Damages and Remedies, Article 40(2)