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THE Aga Khan and his former stud secretary Mary Charlton have agreed a settlement of their long-running Dublin High Court battle.

Mrs Charlton, secretary at the Aga's Irish studs for 27 years, instituted proceedings for damages in 1998.

She also sought orders from the court that she was entitled to continue her employment and that an internal inquiry into alleged misconduct be declared unlawful.

Settlement was reached after both sides attended the Supreme Court on Tuesday and Wednesday. Under the terms of the settlement, the parties were precluded from making any public comment on the matter.

"I have been gagged," said Charlton yesterday. "I had to withdraw certain

allegations but I've been compensated for that. There was a lot of pressure and I am thrilled to have the matter out of my hair. I'm also very happy about the outcome."

She indicated that she will be paid her costs, which are considerable.

Charlton was secretary to Ghislain Drion at the County Kildare Gilltown Stud when the Frenchman resigned as manager of the Aga's internationally renowned Irish breeding operation in 1998 after he was found to have a number of unauthorised horses on the land.

A memorandum detailing what had gone wrong was prepared by chartered accountant Richard Coulton and dated June 18, 1998. A copy went to the Aga Khan and was subsequently shredded by him.

When Charlton's lawyers first obtained an order for discovery of the document, large chunks had been deleted.

The judge, Justice Declan Budd, was highly critical of this, saying: "It is very disturbing to realise that some person in the defendant's organisation has taken it upon himself, or herself, to delete parts of this Coulton memo so that what remained was misleading, and a snare and deception to the court and the plaintiff's [Charlton's] legal advisers."

The judge also criticised Frank Faughnan, personnel manager at the Aga Khan's Irish studs, for writing to Charlton on June 29, 1999 asking her to report for work to answer certain questions when a court order had previously been issued restraining the defendant from holding any such inquiry.

In February 2000, Justice Budd awarded costs to that point in favour of Charlton and ordered that she should be paid her salary until the case came to trial. However, less than two months later the Aga's solicitors lodged an appeal with the Supreme Court.

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