This was a claim brought by Rubio Holdings Ltd (the claimant), the owner of the RN Privodino, against Roswell Tankers Corp, the technical manager of the Ice Eagle (the first defendant), and Global One Shipping Corp, the registered owner of the Ice Eagle (the second defendant), for compensation for damages caused by a collision.

The collision happened on 1 August 2016 as a result of the manoeuvring of the vessels due to the change of weather during the ship-to-ship transhipment of oil. The claimant argued that the sole fault in the collision lay with the defendants. The defendants contended that the collision occurred due to the fault of both vessels, and the fault proportion was 70% for the RN Privodino and 30% for the Ice Eagle. Most of the Ice Eagle claim was based on loss of profits in the form of the lost freight under a time charter agreement with Gazprom Neft Trading GmbH.

The Court of first instance found that both vessels were at fault in the proportion of 70% for the Ice Eagle and 30% for the RN Privodino, ie, the opposite of the proportion argued by the defendants. As a result of offset of liabilities, the claimant was obligated to pay the second defendant damages. The Court of first instance found that the RN Privodino did not act in accordance with good marine practice and did not notify the Ice Eagle of its manoeuvres.

The claimant appealed the judgment. The Court of Appeal upheld the judgment of the Court of first instance. The claimant submitted a cassation appeal.

The claimant argued that the person liable for the incident was the first defendant, the technical manager of the vessel. This argument was supported by the reference to art 1079 of the Civil Code of Russia (the CC RF), under which the ‘possessor of the source of increased danger’ is liable for the damage caused by it. This liability is strict. The Ice Eagle was the source of increased danger under art 1079 of the CC RF. The possessor of the Ice Eagle was the technical manager and not its registered owner. Therefore, the manager was liable for the incident, and the manager’s fault should be established. The Ice Eagle erroneously applied the rules on ship-to-ship operations conducted in the area supervised by Onego Shipping LLC. Therefore, the Ice Eagle was fully liable for the incident. Other arguments related to the justification of the sums of particular losses and damages.

Held: The cassation appeal is dismissed.

Liability for collision damage is regulated by Ch 17 of the Merchant Shipping Code of Russia (the MSC RF), which is based on the Collision Convention 1910. Under art 310 of the MSC RF, where a collision occurs between sea-going vessels or between sea-going vessels and vessels of inland navigation, the compensation due for damages caused to the vessels, or to any property or persons on board thereof, shall be settled in accordance with Ch 17 of the MSC RF. These provisions apply even though the damage caused by the manoeuvring of the ships was not the result of the collision itself.

Under art 1079(3) of the CC RF, the damage caused by the interaction of two sources of increased danger is regulated by the usual tort/delict provisions without application of the rules on the source of increased danger (art 1064 of the CC RF). Under art 1064 of the CC RF, any damage caused to natural persons or their property or juristic entities' property should be compensated in full. The same rule is contained in art 312 of the MSC RF.

If the collision was caused by the fault of two or more vessels, the liability of each vessel should be settled proportionally to their degree of fault. If it is impossible to determine the degree of fault of each vessel, the liability is distributed equally (art 313 of the MSC RF, art 4 of the Collision Convention 1910).

Pursuant to art 15 of the CC RF and s 12 of the Resolution of the Plenum of the Supreme Court of Russia No 25 dated 23/06/2015, the claimant should prove the amount of the damages claimed. The amount of damages should be determined reasonably. The inability of the claimant to prove the exact amount of the damages cannot be the sole ground to dismiss the claim. In this case, the damages compensated should be determined by the court, based on the principles of justice and proportionality. Damages include loss of profits, which are also recoverable under the general delict provisions.

There are no special rules in Russian law devoted to the determination of the recoverability of damages caused by the collision. In light of this absence, the Court of first instance decided to apply Lisbon Rules 1987. These Rules are not mandatory and apply only if the parties agree on it. However, the parties to the proceedings did not argue against the application of the Lisbon Rules 1987. Therefore, their application was justified.

Applying the Lisbon Rules 1987, the Courts found that the expenses incurred by the RN Privodino for disbursements and agency services connected with calling at the Rotterdam port where the vessel was repaired could not be part of the damages caused by the collision. This was due to the fact that the vessel had to call at the port not only for repairs but for other reasons which were not connected with the incident. Expenses for two superintendents were also considered unreasonable, since one superintendent was enough. The agency costs connected with the calling of the vessel at the port of Murmansk for repairs were also found unrelated to the incident.

As for the party who was liable for the collision, the Court of first instance was guided by art 8 of the MSC RF, under which the shipowner is the person who operates the vessel on behalf of itself, and the terms of the management agreement provided by the defendants. On the basis of those, the Court found that the first defendant, the technical manager, acted on behalf of the second defendant, the registered owner. Moreover, the second defendant was obligated under the contract to compensate any expenses incurred by the first defendant regarding the vessel operating. Therefore, the Court of first instance found that the registered owner and not the technical manager was liable for the collision. This position was confirmed by the Court of Appeal.

Section 9 of the Informational Letter of the Presidium of the Supreme Commercial Court of Russia No 81 dated 13/08/2004 (CMI2348), according to which the technical manager operating the vessel is the person liable for the collision, was found inapplicable to the relevant case. This was due to the special terms of the management agreement between the defendants, under which the technical manager acted on behalf of the registered owner.

The Court of cassation found no grounds to revise the judgments of the Court of first instance and the Court of Appeal.