We are pleased to announce a significant legal victory in a landmark consumer protection case before the Supreme Court of Cyprus. The case, Dickran Ouzounian and Company Limited (trading as Lexus Cyprus) v. Christou Efstratiou (Civil Appeal No. 372/2016), concluded with a judgment delivered on 1 August 2025, reinforcing critical consumer rights protections in Cyprus.
Background of the Case
In February 2008, our client purchased a brand-new Lexus IS (sport edition) vehicle from the appellant company for a substantial sum. What should have been an exciting acquisition quickly became problematic when serious mechanical issues emerged shortly after delivery.
Within approximately two months of taking delivery, the vehicle began exhibiting severe defects, including smoke emissions from the engine, reduced engine performance, and complete engine stoppages. These were not minor inconveniences but fundamental failures that rendered the vehicle unreliable and unsuitable for its intended purpose.
The Dealer’s Failed Attempts at Resolution
Between April 2008 and April 2009, our client made repeated visits to the dealer’s service centre to resolve the ongoing mechanical issues. Despite multiple interventions, the problems persisted, demonstrating a fundamental defect in the vehicle that could not be remedied through standard repair procedures.
Eventually, the dealer proposed replacing the vehicle’s entire engine. Our client rightfully rejected this proposal, as such a replacement would significantly diminish the vehicle’s market value and constituted an admission that the vehicle as originally delivered was fundamentally defective. Replacing an engine in a nearly new vehicle would have had serious implications for its resale value, reliability perception, and overall integrity as a “new” vehicle. Our client was entitled to receive what was paid for: a fully functional, defect-free new vehicle.
The District Court Decision
The matter proceeded to the District Court of Nicosia, which ruled comprehensively in favour of our client. The Court found that the vehicle did not possess the expected quality based on its description and specifications, was not reliable or suitable for its intended use due to the defects and malfunctions, and that the dealer was unable to provide a final and comprehensive resolution to the problems.
The District Court awarded our client €38,101.81, representing the full purchase price paid for the vehicle, plus statutory interest from the date of the claim until full payment, and costs.
The Appeal and Supreme Court Judgment
The dealer later appealed to the Supreme Court, challenging various aspects of the lower court’s decision. However, the Supreme Court unanimously dismissed the appeal, upholding the District Court’s judgment in its entirety.
The Supreme Court’s decision validated several critical legal principles:
- Quality and Fitness for Purpose: The Court confirmed that the vehicle did not meet the quality standards expected, given its description and specifications, and was not suitable for its intended use.
- Right to Rescind: The Court affirmed that when a seller cannot remedy fundamental defects in goods sold, the buyer has the right to rescind the purchase agreement and obtain a full refund.
- Inadequacy of Engine Replacement: The Court recognised that the proposed engine replacement was not an acceptable solution, as it would materially affect the vehicle’s value and integrity.
In addition to upholding the original award, the Supreme Court ordered the appellant to pay our client an additional €2,700 in costs plus VAT for the appeal proceedings.
Legal Significance
This case represents an important affirmation of consumer protection principles in Cyprus law. It establishes a clear precedent that:
- Consumers are entitled to receive goods that match their description and are fit for their intended purpose
- Sellers cannot avoid their obligations by proposing remedies that would materially diminish the value or integrity of the goods
- When fundamental defects cannot be properly remedied, consumers have the right to full rescission and refund
- Courts will protect consumers from being forced to accept compromised solutions to defective products
The judgment sends a strong message to sellers and manufacturers that they must stand behind the quality of their products and cannot escape liability when goods fail to meet basic standards of quality and reliability.
Our Commitment to Consumer Rights
This victory exemplifies our firm’s dedication to protecting consumer rights and holding businesses accountable for their obligations. Our Partner, Avgoustinos Tsarkatzis, demonstrated exceptional legal skill and tenacity in pursuing this matter through multiple levels of the court system, ultimately securing complete vindication for our client.
We remain committed to advocating for consumers who have been sold defective products and ensuring that their legal rights are fully protected and enforced.
Key Contact:
Avgoustinos Tsarkatzis
Supervising Partner/ Deputy Head of the Litigation Department