PortService LLC (the claimant) applied to arrest the vessel Tornado, owned by Alkor LLC (the defendant). The ship was mortgaged to the claimant under an agreement dated 10 June 2022.

The claimant argued that the ship left the port of Vladivostok on 11 November 2022 and stopped signalling its location. The claimant concluded that this might be a sign that the vessel was sold as scrap secretly without providing the relevant information to the registration authority. Also, the claimant stated that in parallel proceedings, Dalnevostochniye Technologii Biznesa LLC, the company affiliated with the defendant with the same governing bodies, made an attempt to hide the ship Korenovsk that caused the impossibility of enforcing a judgment. The claimant emphasised the defendant’s financial difficulties, which were followed by non-enforced judgments against the defendant and insolvency proceedings instituted upon the application of the Russian Tax Authorities.  

The Court of first instance dismissed the application. It stated that the mere fact that the claimant has a maritime claim against the defendant, as stipulated by art 389 of the Merchant Shipping Code of Russia, does not justify arrest if the procedural grounds for the arrest are not met. The claimant appealed.

Held: The appeal is dismissed.

According to art 90 of the Commercial Procedure Court of Russia (the CPC RF), a commercial court grants a security measure if its absence may make it difficult or impossible to enforce the judgment and to prevent significant damage to the applicant. Under s 9 of the Resolution of the Plenum of the Supreme Commercial Court of Russia No 55 dated 12/10/2006 (Resolution No 55), a security measure is granted if one of the mentioned grounds is met. Difficulty or impossibility of judgment enforcement may relate to the lack of property or an attempt to hide it.

Pursuant to s 10 of Resolution No 55, the courts consider the reasonableness of a security measure applied for, the probability of causing significant damage to the applicant if a security measure is not granted, the balance of the parties’ interests, and preventing violation of public or third parties' interests.

Under s 13 of the Resolution of the Plenum of the Supreme Commercial Court of Russia No 11 dated 09/12/2002, the commercial courts do not grant security measures if the applicant fails to justify the particular circumstances on which its application is based. Therefore, security measures are granted only when they are actually needed.

The Court of Appeal stated that the claimant referred to public data from the website MarineTraffic to prove that the vessel was not signalling its location. However, the Court found using the same website that the vessel was located in the Sea of Okhotsk, going from Magadan to Vladivostok, when the appeal was heard.

The defendant's and its affiliated companies' other debts do not affect the current proceedings. The claimant did not provide proof to justify the arrest's necessity.