Atanov YA (the claimant) and Dubenko VL (the defendant) entered into a sale and purchase agreement in respect of the fishing vessel Saturn. The purchase price was RUB 20,000,000. The claimant alleged that the defendant failed to pay RUB 19,900,000 of the purchase price. The claimant therefore sought the return of the vessel and for damages of RUB 55,000,000. The claimant submitted its claim to a court of general jurisdiction. The claimant also applied for security measures in the form of the arrest of the vessel and the prohibition of any changes to its ship register. The security measures were granted.

The defendant applied to set the arrest aside since it violated his rights. He argued that fishing was his main activity. The Court upheld the application and set the arrest aside. At the same time, the security measure in the form of the prohibition of any changes to the ship's register remained in place. The Court found that this measure would form sufficient security for the interests of the claimant and ensure the status quo in the parties’'relations.

After that, the Court of general jurisdiction ruled that it was incompetent to consider the dispute since it was of a commercial nature and transferred the case to the Commercial Court of Krasnodar Region. The claimant submitted another application to arrest the vessel. Its application was dismissed. The claimant appealed the ruling.

Held: The appeal is dismissed.

According to art 90 of the Commercial Procedure Code of Russia (the CPC RF), the court may grant security measures if not granting these measures would make it difficult or impossible to enforce the judgment, or in order to prevent significant damage to the applicant. The security measures should be connected with the subject of the claim, and necessary and sufficient to secure the enforcement of the judgment or to prevent significant damage to the applicant. Under art 91(1)(1) of the CPC RF, one of the security measures is the 'arrest’'of money or other property owned by the defendant and possessed by it or third parties.

Under ss 9 and 10 of the Resolution of the Plenum of the Supreme Commercial Court of Russia No 55 dated 12/10/2006 (Resolution No 55), courts grant security measures if at least one of the following grounds are met: 1) not granting the relevant measure may make it difficult or impossible to enforce the judgment; or 2) the relevant measure is necessary to prevent significant damage to the applicant. Difficulty or impossibility of enforcement of the judgment may relate to the lack of other property of the defendant or actions undertaken by it aimed at reducing the amount of its property. To prevent significant damage to the applicant, the measure may aim at ensuring the existing status quo in the parties' relations.

In assessing an application for a security measure, a court takes into account the reasonableness of the application, the probability of causing significant damage to the applicant in case of not granting the measure, ensuring the balance of parties' interests, and preventing the violation of the interests of public and third parties if the measure is granted.

Pursuant to art 388 of the Merchant Shipping Code of Russia (the MSC RF), ship arrest is any detention of a ship or restriction of its movement when it is located in Russia on the basis of the judicial act of a court, commercial court, or authorised arbitration institution for maritime claims as determined in art 389 of the MSC RF, excluding the seizure of a ship in execution of a judgment. Under art 389 of the MSC RF, a claim related to any agreement for the sale and purchase of a ship is a maritime claim.

As stated in s 16 of the Informational Letter No 81 (CMI2348), if the MSC RF contains provisions different from those in the CPC RF, the CPC RF’s provisions apply considering the MSC RF.

The Court of first instance stated that the arrest of the ship did not create any obstacles to the commercial use of the ship arrested. The arrest granted constituted only the prohibition of making any changes to the ship's register. This measure ensured the balance of the parties' interests.

The Court of Appeal emphasised that this understanding of the arrest did not correspond to the provisions of the MSC RF. At the same time, the fact that the claimant had a maritime claim did not mean that the court granting the arrest should follow the content of art 388 of the MSC RF. In considering the circumstances of the case, a court has the discretion to determine the content of the security measure granted, including narrowing the meaning of the arrest defined in art 388 of the MSC RF. The security measure granted is sufficient to ensure the status quo in the parties' relations and, therefore, meets the security measures' purposes as described in the CPC RF.

Moreover, the Court of general jurisdiction had already considered this issue and found that the arrest of the ship in the form of its detention would constitute excessive security for the claim and violate the defendant's rights. To issue a contradicting decision would be inconsistent with the relevant ruling of the Court of general jurisdiction that was not appealed.

On the basis of the above, the appeal was dismissed.