On 2 February 2024, the vessel Flying Fish 1, owned by Safetrans Line Ltd and RS Shipping Ltd, grounded at the approach channel to the Bronka berth. The vessel blocked the entrance and exit from the berth. On 3 February 2024, the shipowner and FSBI Morspassluzhba (the applicant) entered into a salvage agreement. On the same day, the salvage operation was completed successfully. On 12 February 2024, the applicant claimed a salvage reward in the amount of RUB 800,000,000. The shipowner did not respond and did not pay the reward. The applicant submitted an application for the arrest of the ship.

The Courts of first and appellate instances dismissed the application. They found that the applicant had failed to prove the necessity for the arrest of the ship because it did not provide evidence that its claim was actually received by the shipowners. The applicant submitted a cassation appeal.

Held: The cassation appeal is dismissed.

Under art 90 of the Commercial Procedure Code of Russia (the CPC RF), security measures are granted to secure the claim and the applicant’s interests. Article 90(2) of the CPC RF provides that the commercial courts grant security measures if not granting them may make it difficult or impossible to enforce the judgment, including situations when the enforcement should be conducted outside Russia, and to prevent significant damage to the applicant.

Pursuant to art 91 of the CPC RF, the security measure must be proportionate to the claim secured. According to art 92(2)(5), the applicant must justify its application. The courts dismiss applications if the applicant fails to prove the grounds for the security measures listed in art 90 of the CPC RF (art 93(3) of the CPC RF). Security measures are granted if at least one of the grounds listed in art 90 of the CPC RF is met. This is also provided by s 40(2) of the Resolution of the Plenum of the Supreme Court of Russia No 15 dated 1 June 2023 (Resolution No 15). Under s 14 of Resolution No 15, courts considering applications for security measures, establish the grounds for granting the measures, and determine whether the measures applied for relate to the subject of the claim, are proportionate to it, and how it meets the security measures' purposes.

Thus, assessing the applicant's arguments, a court takes 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 significant damage to the interests of public and third parties if the measure were to be granted. To prevent significant damage to the applicant, the security measure may be aimed at ensuring the status quo in the parties' interests.

The applicant applied for the ship's arrest referencing arts 388 and 389 of the Merchant Shipping Code of Russia (the MSC RF). 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. Under s 17 of the Informational Letter No 81, the ship may be arrested only for a maritime claim (art 388(1) of the MSC RF). The list of maritime claims is contained in art 389 of the MSC RF. Article 390 of the MSC RF provides for the grounds for the arrest.

The respective provisions of the MSC RF regulate the substantive aspect of ships arrests by requiring the existence of a maritime claim. They do not set out the procedural grounds for the arrest which, in turn, are stated in the CPC RF. Moreover, art 6 of the Arrest Convention 1952 stipulates that

the rules of procedure relating to the arrest of a ship … and all matters of procedure which the arrest may entail, shall be governed by the law of the Contracting State in which the arrest was made or applied for.

Thus, the special rules of the MSC RF do not exclude the necessity of meeting the requirements for granting security measures provided by the CPC RF. If the application meets the requirements of the MSC RF, a court may order an arrest if it finds that the procedural grounds for an arrest are also met. The above provisions of the MSC RF do not imply that ship arrest is unconditional if the application meets the MSC RF requirements.

Article 7 of the Arrest Convention 1952 provides that

the Courts of the country in which the arrest was made shall have jurisdiction to determine the case upon its merits if the domestic law of the country in which the arrest is made gives jurisdiction to such Courts.

Under art 248.1 of the CPC RF, the Russian commercial courts have the exclusive jurisdiction to consider disputes involving persons against whom restrictive measures (sanctions) are applied. Such restrictive measures were enacted against the applicant. Therefore, the applicant could not protect its rights outside Russia, and the defendants did not have any property in Russia besides the ship. This was a sufficient ground for granting the interim measures sought. Thus, the Court of cassation revised the reasoning of the Courts of first and appellate instances that the applicant failed to prove the necessity for the security measure.

However, at the date of the proceedings in cassation, the ship had already left Russia. In the absence of the ship, it could not be detained, and therefore, a security measure in the form of a ship arrest could not be granted.