The DIFC Court of First Instance has reinforced its commitment to trial-based fact-finding in complex commercial disputes, rejecting a late-stage attempt by the Defendants to strike out claims involving alleged breaches of fiduciary duty and misrepresentation.
What are the specific factual allegations and the nature of the dispute between Zuzana Kapova and Miloslav Makovini in CFI 004/2023?
The dispute centers on a series of alleged breaches of fiduciary duty, misrepresentation, and the wrongful transfer of shares and monies involving Zuzana Kapova and the Defendants, Miloslav Makovini and Pharmtrade Holding Ltd. The Claimant asserts that the First Defendant, Miloslav Makovini, occupied a position of trust and confidence, potentially acting as an attorney or tax adviser, and utilized "misrepresentation and trickery" to secure an interest in Pharmtrade Holding Ltd without the requisite payment of a joining fee.
The litigation has been marked by extensive procedural history, including previous orders regarding the management of the case as a litigant in person, such as the Zuzana Kapova v Miloslav Makovini [2023] DIFC CFI 004 — procedural fairness for litigants in person (10 March 2023). The current dispute involves the Defendants' attempt to terminate the proceedings summarily, arguing that the Claimant’s pleadings were insufficient. However, the Court maintained that the core of the dispute remains viable, noting:
The essence of the Claimant’s claim is clear and represents a case to answer, whatever the inadequacies in particularisation and disclosure.
The case is currently scheduled for trial in January 2026, where the Court will determine whether the First Defendant breached duties owed under the Joint Venture Agreement or as a director of the holding company.
Which judge presided over the application for immediate judgment in Zuzana Kapova v Miloslav Makovini on 28 October 2025?
The application was heard and determined by H.E. Justice Sir Jeremy Cooke, sitting in the DIFC Court of First Instance. This order follows a series of procedural directions in the same case, including the ZUZANA KAPOVA v MILOSLAV MAKOVINI [2023] DIFC CFI 004 — procedural flexibility for litigants in person (30 March 2023) and subsequent consent orders, such as the ZUZANA KAPOVA v MILOSLAV MAKOVINI [2023] DIFC CFI 004 — Consent order regarding jurisdiction challenge deadlines (06 April 2023).
What were the primary legal arguments advanced by the Defendants in their application for strike out and immediate judgment?
The Defendants argued that the Claimant’s Particulars of Claim failed to disclose reasonable grounds for the action, constituted an abuse of process, and obstructed the just disposal of the proceedings. Specifically, they contended that the Claimant would be unable to establish the existence of fiduciary duties under the DIFC Law of Obligations. They further argued that the Claimant had failed to comply with disclosure obligations and court-ordered particularization, seeking "unless orders" to force compliance or dismiss the claim.
In response, the Claimant maintained that she had provided the best particulars possible given the Defendants' own failure to provide full disclosure. The Court found the Defendants' application to be "misconceived," noting that it was filed prematurely—only two days after a Request for Further Information was served—and without waiting for the Claimant’s response.
What was the precise legal question H.E. Justice Sir Jeremy Cooke had to resolve regarding the strike-out application?
The Court had to determine whether the allegations of breach of fiduciary duty and misrepresentation were so legally deficient or factually unsupported that they warranted summary dismissal or a strike-out under the Rules of the DIFC Courts (RDC). The core doctrinal issue was whether the relationship between the parties—specifically whether the First Defendant acted as a tax or legal adviser—could be adjudicated as a matter of law or if it necessitated a full trial to resolve disputed facts.
How did H.E. Justice Sir Jeremy Cooke apply the test for strike-out in the context of alleged fiduciary breaches?
Justice Cooke applied a rigorous standard, emphasizing that where factual disputes exist regarding the nature of a relationship of trust and confidence, summary disposal is inappropriate. He noted that the pleas were "comprehensible" and that the factual issues—such as whether the First Defendant held himself out as an adviser—must be tested through evidence at trial.
These factual issues mean that there is no possibility of a strike out of any of the allegations of fiduciary duty or breach thereof. They will have to be determined at trial.
The Court further reasoned that the Defendants' own failure to provide adequate disclosure hindered the Claimant’s ability to provide further particulars, and that the Court would reserve the right to draw adverse inferences at trial if disclosure obligations remained unfulfilled.
Which specific sections of the DIFC Law of Obligations and the Law of Damages and Remedies were central to the Court’s reasoning?
The Court focused on the application of Section 158 (1) and Section 158 (2)(a)-(d) of the DIFC Law of Obligations, which define the scope and existence of fiduciary duties. The Defendants attempted to argue that the Claimant could not meet the threshold for establishing these duties. Additionally, the Court referenced Article 40(2) of the Law of Damages and Remedies regarding the criteria for awarding aggravated damages, specifically noting the requirement that the defendant's conduct must be "deliberate and particularly egregious and offensive."
How did the Court address the Claimant’s request for aggravated damages in light of the Law of Damages and Remedies?
The Court clarified that while the claim for compensatory damages must be particularized, any claim for aggravated damages requires a specific evidentiary basis. The Court set a strict deadline for this, warning that failure to provide such particulars would result in the claim being barred.
Aggravated damages can be awarded by the Court where “warranted in the circumstances” in an amount no greater than three times the actual damages, “where it appears to the Court that the defendant’s conduct producing actual damages was deliberate and particularly egregious and offensive”.
The Court further stipulated the consequences of failing to meet these evidentiary requirements:
In the absence of particularisation and proof, the Court will not be in a position to award such damages, even if the Claimant is entitled to other remedies and the Claimant will be debarred from making any such claim.
What was the final disposition of the Defendants' application and the specific orders regarding costs?
The Court dismissed the Defendants' application for immediate judgment, strike out, and unless orders in its entirety. Furthermore, the Court ordered the Defendants to pay the Claimant’s costs of the applications on an indemnity basis, to be assessed by the Registrar if not agreed. The Claimant was ordered to provide full particulars of her compensatory damages claim by 15 December 2025.
The Defendants shall pay the Claimant’s costs of the Applications referred to in paragraphs 2 and 3 hereof on the indemnity basis, such costs to be the subject of assessment after the Trial by the Registrar if not agreed.
What are the practical implications for litigants regarding the particularization of damages and the timing of strike-out applications?
This ruling serves as a warning against "misconceived" or premature strike-out applications, particularly when they are filed before the opposing party has had a reasonable opportunity to respond to requests for information. Practitioners must ensure that applications for summary disposal are grounded in clear legal impossibility rather than mere evidentiary disputes.
Furthermore, the Court has set a firm precedent regarding the necessity of particularizing aggravated damages. Litigants must be prepared to set out the "egregious or offensive conduct" relied upon by the specified deadline, or face the permanent loss of the right to pursue such claims.
The Claimant shall give full particulars of her claim for compensatory damages by no later than
4pm on Monday, 15 December 2025.
If the Claimant seeks aggravated damages, she shall by the same date set out the basis for such claim and in particular the egregious or offensive conduct relied on and the reasons for the award of any particular amount.
Where can I read the full judgment in Zuzana Kapova v Miloslav Makovini [2025] DIFC CFI 004?
The full judgment can be accessed via the 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-1 or via the CDN link: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-004-2023_20251028.txt
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| N/A | N/A | No specific precedents cited in the provided order text. |
Legislation referenced:
- DIFC Law of Obligations, Section 158 (1) and 158 (2)(a), (b), (c), (d)
- DIFC Law of Damages and Remedies, Article 40(2)
- Rules of the DIFC Courts (RDC)