Agrogroup LLC (the claimant) concluded an agreement to sell 2,850.95 mt of sunflowers to VTC Tarim Unrunleri Gida San Ve TTC Ltd. The claimant was obligated to deliver the goods to Samsun, Türkiye.

To fulfil its obligations under the sale contract, the claimant entered into a carriage of goods contract with MGA Shipping Co and AGM Express Co (the defendants). The carrier accepted the cargo on board the GAM Express and issued bills of lading.

The carrier failed to deliver the goods to the port of destination. Instead, the cargo was discharged in Alexandria, Egypt, not against the original bill of lading. The claimant submitted that this constituted a misdelivery. Moreover, the claimant argued that the cargo was sold to another third party without permission from the claimant or the proper consignee. The claimant submitted a pretrial claim for damages for USD 1,126,125.25. To secure the claim it applied for the arrest of the GAM Express, moored in Kavkaz, Russia.

Held: The arrest was granted.

According to s 1 of the Resolution of the Plenum of the Supreme Court of Russia No 15 dated 1 June 2023 (Resolution No 15), security measures are granted to prevent the violation of the rights, freedoms, and legitimate interests of the applicant or the public, and to create conditions for proper judgment enforcement. Pursuant to s 14 of Resolution No 15, courts considering the application for security measure establish the grounds for granting the measure and determine whether the measure applied for relates to the subject of the claim, is proportionate to it, and how it meets the security measure's purposes.

Thus, assessing the applicant’s arguments, courts take into account the reasonableness of the security measure applied for, the connection between the relevant measure and the subject of the claim, the probability of causing significant damage to the applicant if the measure is not granted, ensuring the balancing of the parties' interests, and preventing any significant damage caused to the interests of public and third parties if the measure is granted. To prevent significant damage to the applicant, the security measure may be aimed at ensuring the status quo in the parties' interests.

Under s 40 of Resolution No 15, preliminary security measures are granted before the claim submission according to art 99 of the Commercial Procedure Code of Russia (the CPC RF). In commercial proceedings, an application for preliminary security measures is considered in accordance with the general rules of the CPC RF on security measures (art 90(2) of the CPC RF). After the claim is submitted, preliminary security measures remain in place as non-preliminary ones. There is no need to issue another ruling.

Under s 16 of the Informational Letter No 81 (CMI2348), if the Merchant Shipping Code of Russia (the MSC RF) contains provisions different from those in the CPC RF, the CPC RF’s provisions apply considering the MSC RF. The claims arising out of any agreement relating to the use or hire of a ship is a maritime claim according to art 389 of the MSC RF and art 1.1.d of the Arrest Convention 1952.

According to art 388 and art 3.1 of the Arrest Convention 1952, to secure a maritime claim, the commercial court may arrest the ship for a maritime claim. The arrest of the ship is not dependent on the proportionality of the claim to the value of the ship. Pursuant to 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.

Granting the arrest, the Court emphasised that the claimant does not have any information on other defendants’ property in Russia; the ship may leave Russia; the ship may reach a place where it will be difficult or impossible to enforce the judgment from its value; the ship may be sold to another person. Since the claim is not secured by a maritime lien, the sale may make it impossible to enforce a judgment.

Therefore, not granting the security measure applied may result in difficulty or even impossibility in enforcing a judgment. On the basis of the above, the arrest was granted.

[Ruling confirmed on appeal: see the Ruling of the Commercial Court of the Fifteenth Commercial Court of Appeal in Case No A32-35114/2024 dated 05/11/2024.]