Arctic SPG 2 LLC (the claimant) entered into a construction agreement with Saren BV, which hired Boskalis LLC (the defendant) as a subcontractor to carry out part of the work. On 4 March 2022, the defendant notified Saren BV that it had terminated the contract. As a result, Saren BV suffered losses of approximately RUB 668,440,854. Saren BV assigned its rights under the contract to the claimant. The claimant applied for the arrest of the defendant's dredger Nordic Giant used in the construction work. The claimant also requested the transfer of the vessel to a third party, Onego Shipping Ltd, in bailment with the right to use the vessel. The claimant provided counter-security in the amount of the claim. The arrest was granted. The defendant submitted an appeal.

The defendant argued that the claim under the construction contract did not arise out of a contract relating to the use of a ship. For the contract to relate to the use of a ship, the use of the ship should be the main subject thereof. In the present case, the operation of the ship was secondary to the construction work. Therefore, the claim was not a maritime claim. Also, the defendant contended that the arrest could not provide the right to use the vessel to any third party since it is a restrictive remedy aimed at preventing the disposal of the defendant's property. It cannot entitle the claimant or any other party to exploit the ship commercially. At last, the defendant stated that Saren BV's claim could not be assigned to the claimant since this assignment was contractually prohibited.

Held: The appeal is dismissed.

According to art 99(1) of the Commercial Procedure Code of Russia (the CPC RF), the Court, upon the application of the artificial or natural person, can grant a security measure aimed at securing the claimant's property rights before the submission of the claim. Security measures should be proportionate to the claims they are aimed to secure (art 99(2) of the CPC RF).

Pursuant to s 10 of the Resolution of the Supreme Commercial Court of Russia No 55 dated 12 October 2006, assessing the claimant's arguments, the Court takes into account the reasonableness and feasibility of the claim, probability of causing significant damages to the claimant if the security measure is not granted, the balance of the parties' interests, preventing the violation of rights and interests of the public and third parties. The burden of proof is upon the party applying for the security measure (art 65 of the CPC RF).

The special provisions on the arrest of ships are contained in Ch 12 of the Merchant Shipping Code of Russia (the MSC RF). Under art 388 of the MSC RF, the 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 the execution of a judgment. According to art 390 of the MSC RF, the ship may be arrested if, at the commencement of the arrest procedure, it is owned or chartered by demise by the person liable for the claim.

The Court of Appeal supported the position of the Court of first instance that the claim arose out of a contract relating to the use of a ship and, therefore, was a maritime claim according to art 389 of the MSC RF. The Court confirmed that the measure is aimed at ensuring the balance of the parties' interests and is needed to execute a future judgment. Non-imposition of the measure may result in the necessity to bring new claims arising out of the same incident. The argument that the arrest cannot entitle the claimant or third parties to use the ship was rejected by the Court as it was based on an incorrect interpretation of the law. The defendant's other arguments were rejected, with reference to the position that the security measure is an expedited and pre-judgment remedy. Thus, there was no requirement to provide evidence required for proceedings on the merits.

[Ruling confirmed on cassation appeal: see the Ruling of the Commercial Court of the North-Western District in Case No A42-3901/2022 dated 24/11/2022]