On 15 June 2023, TTS Denizcilik AS (the claimant) signed a management agreement with RCC Line DMCC (the defendant). The vessel in management was the Manisa Kristin, later renamed the Kristin. The defendant failed to pay under the contract, but did not complain about the services.

On 31 August 2023, the claimant applied to arrest the ship. On 7 September 2023, the Manisa Kristin was arrested. On 13 September 2023, a third party, JSC RKK (the shipowner), applied to set aside the arrest.

The shipowner argued that the defendant was not the ship's registered owner and provided the extract from the register, indicating that the shipowner became the registered owner on 25 August 2023, and the ship was renamed the RKK Stargayzer. The claimant provided another document, a response from the harbour master of the Great Port of St Petersburg, stating that the registration procedure ended on 12 September 2023, and the certificate of ownership was issued on the same date. The harbour master added that the register was public and anyone could find the relevant information there.

The shipowner relied on the Order of Mintrans No 181 dated 19 March 2017 (the Rules of Registration) which stated that the certificate of ownership is given to the new owner three days after checking all the necessary documents. The shipowner argued that it became the owner when this certificate was issued to them on 25 August 2023. Therefore, the defendant was not the owner when the arrest application was brought. Other arguments were that the claim was not a maritime claim and that the security measure was disproportionate to the claim value.

Held: The arrest is set aside.

Under art 8.1 of the Civil Code of Russia, the rights that must be registered arise only when entered in the relevant register (title by registration). The ownership of the ship should be entered in the port's register.

According to art 3.1 of the Arrest Convention 1952, a maritime claimant may arrest either the particular ship in respect of which the maritime claim arose, or any other ship which is owned by the person who was, at the time when the maritime claim arose, the owner of the particular ship. The parties did not contend that the owner of the ship at the time when the maritime claim arose was the defendant. The same rule is provided by art 390 of the Merchant Shipping Code of Russia (the MSC RF). The Court accepted the argument that the shipowner, and not the defendant, was the registered owner of the ship when the arrest application was brought. Therefore, the ship could not be arrested to secure the claim against the defendant.

The Court declined the shipowner’s argument that the claim was not a maritime claim. As for the argument regarding the disproportionality of the measure to the value of the claim, the Court stated that the proportionality requirement does not apply to ship arrest, as this is not stipulated by the Arrest Convention 1952 and the MSC RF.

The shipowner also made an alternative case for counter-security from the claimant if the ship remained under arrest. As the ship was released, this application was dismissed.