What business is not called marriage

The Supreme Court of the Russian Federation (SC) will decide whether the car dealer can transfer to the distributor who delivered the car all responsibility to the buyer for a manufacturing defect. In addition to the cost of the car, the dealer wants to compensate for the fine for violating consumer protection law and compensation for non-pecuniary damage. Such conflicts are not uncommon, but usually resolved out of court. Lawyers doubt that the BC will allow the dealer to reimburse all costs.

The SC will determine the limits of responsibility of the distributor and car dealer when selling low-quality goods to the consumer. In February 2012, Chery Automobiles Rus JSC (distributor, supplier) entered into a dealer agreement with Radar Center for Registration of Traffic Accidents. According to it, “Radar” was appointed as a dealer, gaining the right to sell and service certain models of cars, including their warranty and post-warranty repairs. It was about Chery cars produced by Chery Automobile Co (PRC) or enterprises authorized by it in the territory of the Russian Federation.

The dispute arose over one of the delivered cars. Ravil Ibragimov, who bought a car from Radar in October 2018, complained about “numerous fatal defects in the paintwork of an industrial nature” and demanded a refund. The dealer ignored the claim, and the buyer filed a claim.

The Central District Court of Tyumen in October 2020 recovered 1.33 million rubles from Radar. losses. The court recognized that the presence of “significant defects in technically complex” goods serves as a basis for terminating the contract and recovering the cost of the car. In addition, Mr. Ibragimov was awarded 5 thousand rubles. compensation for non-pecuniary damage, since the sale of goods of inadequate quality “caused him moral suffering.” Since the dealer did not satisfy the citizen’s claims voluntarily, the company was also fined – 333.46 thousand rubles each. in favor of the buyer himself and in favor of the consumer protection organization Block-Post, which acted in his interests.

After paying the money, Radar demanded that Chery compensate for losses totaling 2 million rubles, referring to the fact that the supplier should be responsible for the goods with factory defects. Having been refused, the dealer went to court and won the case. Arbitration courts of three instances recovered 2 million rubles from Chery, noting that “significant manufacturing defects” of the car arose before it was handed over to the dealer, who, due to the supply of low-quality goods, was forced to pay compensation to the consumer. Under the terms of the contract, the distributor undertook to reimburse the dealer for the costs of warranty repairs, according to the courts, these conditions are also applicable to the compensation of the dealer’s costs when returning the car with defects.

Chery complained to the Supreme Court, believing that the courts misinterpreted the obligations under the contract, and that it was not he, but the manufacturer, who was responsible for the low-quality goods. Also, the distributor did not agree that he should reimburse the dealer for a fine, since it is imposed on a person who “voluntarily did not comply with the consumer’s requirement”, but the citizen did not contact him. Among other things, the applicant referred to Art. 475 of the Civil Code of the Russian Federation (CC), which allows the buyer, in the event of a significant violation by the seller of the requirements for the quality of the goods, to refuse it and demand a refund or replacement of the goods, but “reimbursement of additional costs is not provided.” The case was referred to the Economic Collegium of the Armed Forces, consideration is scheduled for September 27.

Aleksey Sharov, managing partner of Averta Group, notes that disputes between car dealers and distributors are not uncommon in practice, but do not always go to court. The fact is, the lawyer explains, that the dealer agreement “is not directly regulated in the Civil Code, its content is determined by the parties”, therefore, if some condition is not made or described inaccurately, “conflicts arise”. The head of Saunin Law Practice, Andrey Saunin, is surprised that “in the current reality, the dealer brought the case to court, as a rule, they try to find a compromise with the supplier,” but now there are “big doubts about their further constructive cooperation.”

Law firm “Genesis” Nadezhda Polishchuk says that from a legal point of view, the supplier is equal to the seller, so the obligations of the seller apply to the supplier (distributor). “The supplier, obviously, is responsible for the quality of the car, but not for any expenses of the car dealer,” says Elena Mende, partner of the Smolenka 33 Bar Association, believing that the Supreme Court will at least limit the right of the dealer to “outweigh the distributor” for the costs associated with untimely satisfaction of consumer requirements.

According to Alexei Sharov, when deciding on the distribution of responsibility, it is necessary to take into account the behavior of both parties. First, the dealer must be able to check the condition of the machine upon acceptance and immediately complain to the supplier. On the other hand, the lawyer continues, one should look at how a distributor involved in a litigation with a consumer behaved as a third party: “If he did not admit the presence of defects, objected to the requirements of a citizen and supported the dealer, then an attempt to exclude financial sanctions for himself looks unfair” .

The dealer, when receiving justified claims from the consumer, must satisfy them, and then redirect the requirements to the supplier, Andrey Saunin points out. “Thus, acting in good faith, Radar had to return the money to the consumer without bringing the case to court,” emphasizes Elena Mende. According to Mr. Saunin, the dealer’s refusal to make a voluntary payment shifts “the entire burden of negative consequences” onto him.

The case around Chery appeared before the outbreak of hostilities, because of which the majority of auto concerns left the Russian Federation (excluding, however, Chinese ones). As a result, the liability problem has only worsened. In the absence of a representative office of the plant in the Russian Federation, Mr. Sharov clarifies, the consumer is deprived of the opportunity to make claims to the manufacturer, but the right to apply for compensation to the seller remains. Mr. Saunin clarifies that the distributor can also recover losses: “If the car is imported through parallel import, the distributor turns to the company from which he himself purchased the car, and further along the chain.”

Ekaterina Volkova, Anna Zanina