A final settlement was announced in the High Court yesterday of the legal battle by the billionaire Getty family against Punchestown racecourse for the repayment of a €3.8 million loan given under the passports for investment scheme.

Making final orders in line with the terms of settlement, which were handed into the Commercial Court, Mr Justice Peter Kelly noted the terms include an agreement by the defendants to pay €3.5 million to the Getty-owned vehicle, GT Equinus Inc.

Mr Justice Kelly directed that €2.5 million be paid out from money lodged in court before Christmas, plus an immediate payment of €500,000. The judge said the agreement also provided for further instalments of €350,000 to be paid by the end of July this year and a further €150,000 by April 2008.

He also directed that the defendants pay all costs within 14 days of the agreement. In the event of a default in payment, Mr Justice Kelly said the settlement provided that judgment would be given for the entire amount.

The US-based Gettys loaned the money to Punchestown in 1999 to help fund its redevelopment. It is understood that three members of the Getty family - John Paul, Aileen and Gail Getty - were approved for Irish passports under the scheme.

GT Equinus, based in Nevada, later brought High Court proceedings in relation to the investment transaction. It claimed it acted as a vehicle for the purposes of effecting an investment in Blackhall Racing Company, the operator of Punchestown racecourse.

The action was against Blackhall Racing Company; Kildare Hunt Club (KHC), owner of all the issued ordinary shares in Blackhall, and two KHC subsidiaries, Punchestown Development Company Ltd and Punchestown Enterprises Ltd.

After the settlement of the proceedings, the parties in a joint statement said they were "pleased to announce that an agreement had been reached resolving all claims arising from the investment in Punchestown to the mutual satisfaction of all parties".