TransFin-M PJSC (the claimant) sued Marine Trans Shipping LLC (the defendant) for the reclamation of the vessel Polar Rock from the latter's adverse possession. The claimant and the defendant concluded a ship sale and purchase agreement. The defendant failed to pay the purchase price. The claimant unilaterally terminated the contract and reclaimed the vessel. The vessel's title was registered in the Russian ship register.

The claimant applied for preliminary security measures. The first was a prohibition on the competent State body from making entries on the register regarding the vessel. The second was the arrest of the vessel. The claimant argued that there was the risk of the defendant disposing of the vessel. Also, it argued that if the vessel left Russia, it would be impossible to enforce the potential judgment in favour of the claimant as the defendant had no other property in Russia.

Held: The prohibition to make entries to the ship register is granted. The arrest application is dismissed.

According to art 2 of the Commercial Procedure Code of Russia (the CPC RF), the main purpose of commercial proceedings is to protect the violated and disputed rights and interests of people involved in commercial activities. This implies not only the interested party's entitlement to apply to a court for this protection but also the actual possibility of the judgment's enforcement.

Under art 90(2) of the CPC RF, a commercial court may grant a security measure at any stage of the proceedings if not granting these measures would make it difficult or impossible to enforce the judgment and prevent significant damage to the applicant.

Pursuant to s 14 of Resolution of the Supreme Court of Russia No 15 dated 1 June 2023 (Resolution No 15), a commercial court considering the application for a security measure shall establish the grounds for granting this measure, how this particular measure is connected with the subject of the claim and proportionate to it, and whether this measure ensures the purposes of security measures. Thus, a commercial court considers the measure's reasonableness, the probability of causing significant damage to the applicant if the measure is not granted, and the balancing of the parties' interests, and the prevention of violation of third parties' rights. To prevent significant damage to the applicant, security measures may be aimed at ensuring the status quo in the parties' dealings.

One basis for security measures is their reasonableness, and the commercial court applies them considering evidence proving at least one of the grounds stipulated by art 90(2) of the CPC RF. According to s 15 of Resolution No 15, the security measures are preliminary remedies, and therefore, there is no need to provide evidence to the standard necessary to prove the claim on the merits.

Based on the above, the Court of first instance decided that the application for the security measure in the form of a prohibition on the competent state body from making entries to the register regarding the vessel is reasonable and should be granted.

As for the arrest of the ship, the Court of first instance found that according to art 388(1) of the Merchant Shipping Code of Russia (the MSC RF) and art 1.2 of the Arrest Convention 1952, a ship may be arrested to secure a maritime claim. Under s 16 of Informational Letter No 81 (CMI2348), if the MSC RF provides for rules different from the CPC RF, the provisions of the CPC RF are applied in accordance with the MSC RF provisions. Pursuant to art 389 of the MSC RF, the claims arising out of the ship sale agreement are maritime claims.

Therefore, ship arrest shall be granted if the security measures grounds stipulated by art 90(2) of the CPC RF are met, considering the special provisions of the MSC RF. The claimant failed to prove that there was a risk of loss or damage if the vessel left Russia. The claimant's arguments are merely assumptions. There is no need for increased security measures as provided by the MSC RF. The application for ship arrest is dismissed.