This was a claim brought by Aves Enerji Yag Ve Gida San AS (the claimant consignee) against JSC Morskoy Gruzovoy Terminal Kavkaz (the terminal) and LLC Taganrogskiy Tankernyi Flot (the carrier) for damages caused to cargo on the carrier's ship, the Lady Raniya.

The claimant and LLC Torgovaya Kompaniya Blago (the seller) entered into an agreement to purchase sunflower oil. The contract was on CIF Mersin terms, with the port of loading being Kavkaz. Upon loading, the cargo was surveyed. According to the survey report, the moisture index of the oil was standard. In the survey conducted at the port of discharge, the moisture index exceeded the normal value. The claimant first claimed damages from the seller. They concluded an additional agreement under which the seller paid the claimant USD 420,000. The claimant then submitted a claim against the terminal and the carrier for USD 501,019.44.

The defendants argued that the claimant had failed to prove that the damage to the cargo was the carrier's fault. The weight of the cargo before the loading and after the discharge was the same. It was therefore unlikely that the oil was mixed with water during the voyage. Moreover, they argued that the seller had compensated all damages caused by the incident, and that the claimant thus lost its right to a claim against the carrier or any third parties. The claimant stated that in light of the survey report, the cargo could not have been damaged before loading onto the ship, but it was damaged on discharge. Therefore, the cargo could not have been damaged outside the voyage. Also, the claimant submitted that the additional contract with the seller was not aimed at compensating the damage caused by the relevant incident.

The Court of First instance and Court of Appeal found in favour of the defendants. The claimant submitted a cassation appeal.

Held: The cassation appeal is upheld. The case is sent to the Court of first instance for reconsideration.

According to art 1064 of the Civil Code of Russia (the CC RF), damage caused to a juristic person’s property is compensated in full. Under art 15 of the CC RF, the person whose rights were violated has the right to the compensation of damages caused. The damages include the actual damages and lost profit. Under art 1064(2) of the CC RF, the person is released from liability if it proves that the damage was not caused by its fault. The defendant's fault is presumed. That means that the onus of proof of the absence of fault is upon the defendant.

Arts 796 of the CC RF and 166 of the Merchant Shipping Code of Russia (the MSC RF) define two kinds of damages. The first is loss of cargo when the cargo is lost physically or economically; ie, when restoring the cargo is more expensive than its actual price. The second is damage to cargo when the value of the cargo is reduced or the use of the cargo is impossible without restoration. The defendants argued that the cargo was damaged. The claimant submitted that the part of the cargo mixed with water was lost, and claimed its full amount. The Court of Cassation found that the Courts below reached the insufficiently justified conclusion that the water could be separated from the oil and it could be used afterwards. Therefore, it was not properly justified that the cargo was damaged and not lost.

Under art 168 of the MSC RF, the carrier is not liable for damage to the cargo delivered to the destination port in good cargo facilities with undamaged shipper's seals. According to s 6 of the Informational Letter of the Supreme Commercial Court of Russia, No 81 (CMI2348), cargo in a container with seals different from those of the shipper cannot be considered cargo that arrived at the port of destination in suitable containers with the proper seals. The same applies to tanks onboard the ship. The Court of Cassation found that the Courts below failed to consider the argument that the seals on the tanks were damaged or switched.

Therefore, the carrier and the terminal failed to prove the absence of their fault, and the case is sent for reconsideration to the Court of first instance.