Recovery of Money for the Burnt Bus

The state transport company bought a bus from our client under the leasing contract. Before the warranty period expired, the bus burned down on the route. An inspection was carried out to investigate into the fire. The cause of the fire was the destruction of a fuel filter. The insurance company refused to cover damages. So, the buyer of the bus filed a lawsuit to recover the price of the bus and losses from our client. The task of the lawyers was: to protect the seller against the recovery of RUB 2 mln stated in the claims.

The lawyers did the following:

1. Explored the entire bus maintenance and operation history.  In the course of the work, it turned out that it was possible to deprive the claimant of the advantage in the form of the warranty.

2. Proved in court that by the time of the fire, the fuel filter had to be replaced by an authorized service center three times pursuant to the maintenance program. No proof attesting to the fact that the filter was replaced was provided.

3. Established that the claimant had modified the design of the bus by installing a fuel system without the consent of our client or the manufacturer. The sale and purchase contract prohibited such modifications without approval.

As a result, the court agreed that given such maintenance approach there can be no talk of the application of the seller's warranties.

4. The legal status of the claimant as a lessee had to be reviewed; by the time the lawsuit was filed, the buyer of the bus had not discharged its obligations owed to the lessor in full. This meant that the claimant was not a rightful owner and was bound by the will of the leasing company as regards the termination of the bus sale and purchase contract. 

The court considered that the claimant had no right to demand termination of the contract and a refund of the money paid for the bus. The court agreed with our arguments and dismissed the claimant's claims.