The client insured property risks including business interruption (BI). A short circuit at a thermal power plant caused damage to a turbogenerator resulting in the client incurring BI losses. The insurer acknowledged the breakdown of the turbogenerator as an insured event. The parties entered into a settlement agreement regarding the payment of the insurance indemnity. Subsequently, relying on this agreement the insurer refused to pay indemnity for the BI losses. In its view, the agreement had settled the loss both in respect of property damage and in respect of operating losses. The client instructed KIAP Law Firm to represent its interests in arbitration.
The first-instance and appellate courts dismissed the claim. However, thanks to the well-structured legal position developed by KIAP Law Firm's lawyers, the court of cassation overturned the decisions of the lower courts and remitted the case for a new hearing. Upon re-hearing the insurer proposed to settle the dispute amicably. Following lengthy negotiations with the participation of KIAP Law Firm, the court approved a settlement agreement under which the insurer undertook to pay the client an insurance indemnity in the amount of RUB 81.8 million.
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