Reimbursement of damages that had been caused by the fire
This happened in the case of our client (the lessee). In the rented warehouse there was a fire outbreak at night, losses from this fire accounted for ten million UAH. In occurrence of any fire the fire inspection and district police officer arrive to the place of the accident, each of them draws up an inspection report on fire site, which preliminary results are taken into account in determination of the cause of fire outbreak.
Experts of research and testing laboratory of the Emergency Situations Service also arrive to the fire site, they later submit their technical conclusion on the most possible causes of the fire outbreak. As a rule, two versions of a possible source of ignition are considered in such a conclusion: arson or emergency operation of the mains (short circuit, network overload, current surge, low current, voltage surge, low voltage).
The technical conclusion is sent to the police, which on its basis as well as the protocol of examination of the fire scene either initiates a criminal case or refuses it. In the case of initiation of a criminal case, material evidences, withdrawn at the fire site (charred wires, etc.) are sent for comprehensive fire-technical and metallographic examination, which establishes a specific cause of fire.
In our case, the lessor at the joint inspection of the burned warehouse with RTL specialists initially assumed that the cause of fire had been most likely an arson (conflicts with competitors). Thus, he wanted the lessee to pay the cost of repairing the warehouse, as well as to refuse compensation for damages caused by destruction of goods. It is also worth noting that in our case there was no lease agreement signed between the lessor and the lessee, there was only a verbal agreement. The obligatory requirement under the legislation of Ukraine is the written form of a lease contract of the premises, and should it be concluded for the term exceeding 3 years, it requires notarial certification.
The absence of a contract leads to the nullity of transaction and bilateral restitution (return of the parties to their state before the agreement). In this case, the owner of the building, as a proprietary, is liable for fire safety. It is also worth mentioning that when entering into a lease agreement of a warehouse or premises, it is important to check how the building was commissioned and how it was recorded in the register. In practical terms there are cases when a warehouse is registered as a household outbuilding. According to the legislation, household outbuildings do not require obligatory fire safety systems installation.
We have carried out work on the collection of evidence, regarding our version of the fire cause, namely the emergency mode of the power grid (network overload, which led to a short circuit and resulted in a fire) and provided it to the experts, who in their technical statement have come to similar conclusion and as a result to refusal to initiate a criminal case in the police in respect of the arson.
Our recommendation: before entering into negotiations with your counterparty, make the most to provide your position with an evidentiary base and find all his ‘pressure points’ that can be pressed to achieve compromise in negotiations on terms, favourable for you.
Fire is something that happens unexpectedly and causes devastating losses. As a rule, the majority of businessmen do not think this may happen in their business activities. The most efficient fire protection methods are as follows: compliance with fire safety regulations and property insurance. Against the possibility of a fire in rented premises or a warehouse, at the time of conclusion of the contract it is appropriate to stipulate conditions that would lay the responsibility for fire safety on the lessor. However, if the fire has already occurred, then as a rule there is a dispute between the lessee and the lessor about who will reimburse the losses caused by fire and who is to blame.
Managing partner, attorney at law