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Reports: Dragon 'suing Lotus for contractual fraud'

Dragon Racing's relationship with engine supplier Lotus is reportedly ending with legal action by the team, citing "contractual fraud" by the manufacturer.
Just when it seemed that the crisis situation surrounding Lotus' involvement in the IZOD IndyCar Series was calming down come reports that Dragon Racing is launching legal action against the engine manufacturer.

According to multiple reports in the media, Jay Penske's team has filed a lawsuit in California where Dragon Racing is headquartered. The case number BC484135 was filed with a the state superior court in Los Angeles, and according to it cites breach of contract and "contractual fraud".

The latest reports say that Dragon Racing has already returned all its Lotus engines and related equipment, and will no longer be using Lotus engines with immediate effect.

First reports of the suit suggest that Dragon is alleging that Lotus failed to deliver either of the two Dallara chassis that it was supposed to purchase for the team, leaving the team itself to pay out the "roughly $400,000" per DW12.

However, despite allegedly admitting that it owed the outstanding chassis purchase money to Dragon, Lotus is said to have threatened to withhold engines from the team if it didn't then pay the engine licensing fees that were due. Dragon also alleges defamation, saying that Lotus went on to make public "knowingly false statements" about Dragon not paying the fees.

The Associated Press quotes the lawsuit as adding: "Put simply, Dragon has had enough of Lotus' deceit and wrongdoing. Dragon has put an end to its ill-fated relationship with Lotus and now seeks recompense for the damages inflicted upon it."

There had been apparent disagreement between Dragon and Lotus ahead of the first race of the season. The engine for Sebastien Bourdais' car arrived only the night before track activity started for the 2012 Honda Grand Prix of St Petersburg, in a seeming disagreement over what contracts had been signed and when. Lotus' inability to manufacturer sufficient engines in time to allow any of its teams to participate in the sole series test at Indianapolis last month is another major factor affecting the company's relationship with all of its IndyCar partners.

Lotus announced at the end of last month that they had agreed to release two of their four full-time teams, Bryan Herta Autosport and Dreyer & Reinbold Racing, ahead of the Indianapolis 500. Both teams are yet to formally announce replacement engine deals with either of Lotus' rivals, Honda and Chevrolet, although deals are said to be close with BHA joining Honda and DRR set for Chevy engines. [Update: DRR has now secured a Chevrolet engine for Oriol Servia by partnering with Panther Racing.]

At the time, Lotus said that this would enable them to focus resources on supporting its remaining teams, Dragon and HVM Racing. The IndyCar Series also subsequently enacted a new rule to prevent any further changes in engine supply deals during a season with effect from April 30, except in extra-ordinary circumstances and with the series organisers' right of sign-off.

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Ryan Hunter-Reay in the 2012 IndyCar Dallara, with Chevrolet power. [Picture copyright: General Motors and Wieck Media Services, Inc]
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Dragon team co-owner Jay Penske [Photo credit: IndyCar Media]
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May 07, 2012 8:39 PM

Completly stupid that the series freezes engine development when these engines have had NO development, its a farce and ruining what could of been a fantastic season, chevy clearly have a big advantage in power, fuel consumption everything, an lotus engines have had NO development what so ever, how can u expect teams to stay with crap engines when u no they are no allowed to be improved. stupid

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