CJSC 'Kanonerskyi Sudoremontnyi Zavod' (the claimant) initiated legal action against JSC 'Polyarnaya Morskaya Geologorazvedochnaya Expeditsiya' (the defendant) for a debt of RUB 93,375,646.80 under a contract for repairing the Professor Logachev. The claimant amended its claim and increased its amount to RUB 276,642,847.94. The defendant accepted the claim for the initial amount stated.

The Court of first instance ruled in favour of the claimant. The defendant appealed part of the decision concerning the allocation of court expenses. The claimant submitted an application to arrest the ship.

The claimant argued that the defendant refused to execute the judgment of the Court of first instance, and therefore, the defendant avoided satisfying the claim. Moreover, the defendant could sell the ship. In this case, the defendant might have insufficient property to satisfy the claim, as the claims arising out of a contract for ship repairs are not secured by a maritime lien (art 367 of the Merchant Shipping Code of Russia, the MSC RF).

Held: The arrest application is dismissed.

The Commercial Court may impose security measures at any stage of commercial proceedings if their absence could hinder or prevent the enforcement of the judgment (art 90(2) of the Commercial Procedure Code of Russia, the CPC RF).

The Court found that claims arising from a ship repair contract are maritime claims under art 389 of the MSC RF. So, the ship can be arrested. However, the fact that the claim is a maritime claim does not mean that the general requirements for imposing security measures need not be met.

Under s 15 of the Resolution of the Plenum of the Supreme Court of Russia No 15 dated 01/06/2023, the Commercial Court considering an application for security measures must assess how this specific measure relates to the claim, whether it is proportionate, and how it will secure enforcement of the judgment (art 91(2) of the CPC RF). It is the applicant's burden to justify its reasons for applying for security measures (art 92(2)(5) of the CPC RF). The Commercial Court must not impose security measures if the applicant has not justified the reasons for applying for these measures through specific circumstances of the case that prove these reasons and are supported by sufficient evidence (s 13 of the Resolution of the Plenum of the Supreme Commercial Court of Russia No 11 dated 09/12/2002).

Considering the arrest application, the Court must examine the reasonableness and justifiability of the application, the connection between the security measure and the subject matter of the claim, the likelihood of causing significant damage due to the absence of the security measure, the balance of parties' interests, and the potential breach of third parties' interests.

The defendant appealed only part of the Court's decision regarding allocation of expenses. There was no reason to believe that the defendant aimed to impede the enforcement of the judgment. The judgment was not yet in force; it would come into force after the appeal. Therefore, the arrest application was not granted.