LLC Onego Shipping Ltd (the claimant) sought to arrest the Arktur (formerly the Beluga Bremen) to secure its claim against JSC Beluga Projects Logistics (JSC/the defendant) for damage caused to the Nordic Giant during its towage. In addition to arresting the Arktur, the claimant sought to prohibit the Harbour Master of the Bolshoi Port of Saint Petersburg from changing the ownership in the register of ships of the Arktur, the Damen Riverstar 1, the Damen Riverstar 2, and the Damen Riverstar 6. This application was granted.

After the relevant incident, JSC sold the Arktur to LLC Alliance (the appellant), after which its name was changed from Beluga Bremen to Arktur. As the new shipowner, the appellant applied to release the ship. The appellant argued that the arrest of the Arktur violated its rights as a new shipowner; was disproportionate to the value of the claim; and that, because the ship was registered in the Russian register and flew the Russian flag, there was no risk that the asset would be dissipated, and become unavailable for enforcement.

This application was rejected. The appellant submitted an appeal that was also rejected. After that, the appellant submitted an alternative application to change the arrest of the ship to a prohibition on the part of the Border Service of the Federal Security Service to give the Arktur permission to leave the territorial waters of Russia. This application was granted. Nevertheless, the appellant appealed in cassation.

Held: The cassation appeal is dismissed.

Preliminary security measures are one form of legal guarantee that a judgment will be enforceable in the future. Under art 90 of the Commercial Procedure Code of Russia (the CPC RF), security measures may be granted at any stage of the proceedings if the lack of those measures may make it difficult or impossible to enforce a judgment, and to avoid significant damage to the applicant.

Under s 22 of the Resolution of the Plenum of the Supreme Court of Russia No 15 dated 1 June 2023 (Resolution No 15), if federal law so provides, property can be arrested even when its owner is not the party liable for the claim. One such case is the arrest of ships. Under art 3.4 of the Arrest Convention 1952, a ship can be arrested even if its charterer by demise, rather than its registered owner, is the party liable for the claim. The same is provided for in art 390(1)(4) of the Merchant Shipping Code of Russia (the MSC RF).

Under s 34 of Resolution No 15, a court may dismiss a security measure if, after it was granted, it finds that there is no longer any need to maintain it; it is disproportionate to the claim; or it violates the interests of the parties involved in the dispute (art 92(4) of the CPC RF). Therefore, when applying to dismiss the security measure, the applicant must prove that the circumstances justifying the measure no longer exist; the measure is not connected to the subject matter of the dispute; or there is no ground for granting the measure.

The grounds for imposing ship arrest are determined by a systematic interpretation of the Arrest Convention 1952, the MSC RF, and the CPC RF. Under art 388(1) of the MSC RF, an 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. A ship may only be arrested for a maritime claim. The maritime claim arises in relation to the ship, irrespective of who is liable for the claim (the owner, the charterer, the agent, the operators, or others).

The claimant submitted an application to arrest the Arktur, which was bareboat chartered to the person liable for the damage caused (the defendant). The damage was caused by the incident during the towage of the Nordic Giant. Therefore, the claimant proved that it has a maritime claim against the demise charterer of the Arktur.

The Court found that the security measures in place at the time of the application did not restrict the appellant’s and the defendant’s rights to use their ships. The Court dismissed the argument that the measure was disproportionate to the value of the claim as being outside the scope of the cassation proceedings.