Apple Watch Series 1 Lifting Screen.......

I sent in my Apple Watch Series 1 - 42mm for repairs as the screen had lifted off the casing only to be told that "it was determined that the unit was physically damaged". It has never once been dropped, all I saw while attending a workshop was the screen hanging by the cable that attaches it to the casing! Now I am expected to replace it at my cost? They know very well that there is a worldwide fault with the series 1 watches caused by a swelling battery which causes the the screen to lift. When i spoke to the international support desk, they informed me of the extended warranty on the watches due to the known problem. All i need is for Apple/iStore to repair my watch at their cost since there clearly is a defect from the manufacturing process. I have been a loyal user of Apple products for the past 10 years and never once have i had problems.