Piotr A. Falileev, partner of FortisJuris law office
Ship Arrest in Russia
In 1999 Russian Federation acceded to the International Convention for the Unification of Certain Rules Relating to the Arrest of Sea-Going Ships 1952 (Ship Arrest Convention 1952). The accession to the Ship Arrest Convention 1952 was done at that time when the draft of the International Convention on Arrest of Ships, 1999 (Ship Arrest Convention 1999) was prepared.
In May 1999
The Russian Merchant Shipping Code is probably the first national maritime law reflecting the modern international tendencies in the field of the arrest of ships.
Under Russian Constitution
(article 15.4) rules of international treaties of
Rules of the Ship Arrest Convention 1952 shall be applied by Russian courts to the arrest of a vessel flying the flag of a Contracting State to the Ship Arrest Convention 1952 (paragraph 1 of the article 8 of the Convention).
In other cases the Russian courts shall apply the rules of the Russian Merchant Shipping Code to the arrest of ships.
Types of claim for which you can arrest.
Under Russian law arrest is permissible of any ship in respect of which a maritime claim is asserted and only if:
The list of maritime claims under Russian law is the same as it is stated in the article 1 of the Ship Arrest Convention 1999.
Notwithstanding that the rules regulating to the arrest of the ships are in force from 1999 it is well -known from the existing court practice that Russian judges are not familiar with the modern regulation and meet sufficient difficulties to apply the rules regarding the arrest of ships in the proper way. Thus in one case considered by the Arbitration Court of Moscow the judge refused to consider the application for the arrest of the ship with reference to the lack of the competence of the arbitration (commercial) courts to consider such applications. However such flagrant ruling was annulled by the cassation instance the claimant lost the time, which is fatal in such cases. In another case considered by the same court the judge refused to arrest the ship motivating such decision that the arrest will be not economic.
Thus sometimes in
A ship may be arrested for the purpose of obtaining security notwithstanding that by virtue of a jurisdiction clause or arbitration clause in any relevant contract, or otherwise, the maritime claim in respect of which the arrest is effected is to be adjudicated in a State other than the State where the arrest is effected, or is to be arbitrated, or is to be adjudicated subject to law of another State.
Arrest of the ship may be
granted by Russian local court, Russian local commercial court and the Maritime
Arbitration Commission if such ship is within the jurisdiction of
The ship must be within Russian territorial waters at the time the arrest is applied and granted. A person applying for the arrest of the ship shall produce to the competent local court a formal application stating its name and location, the nature of claim, providing limited evidences that a certain maritime claim exists, an applicant has it in his favor, the fact that it has not been satisfied, the amount of security sought. Thus an applicant may produce to the local court invoices, charter parties, mortgage contracts, survey reports. There is no need to prove a maritime claim for the purpose of the arrest. Also an applicant shall produce to the local court evidences that a ship in respect of which the arrest application is made is owned by a person liable for a maritime claim or such ship is a sister ship. Such evidences may be relevant extracts from the shipping registries of the ships.
An applicant shall substantiate
in the local court that failure to arrest a ship will be detrimental to the recovery of
the claim if the arrest were not effected. The good reasoning for this may be the argument
that the ship is the only asset available within Russian jurisdiction and, therefore, her
The application to arrest a ship shall be considered by the Court on the next day after the application is filed with the Court without notifications of the parties involved in the case (ex parte proceedings).
If a local Court makes a conclusion that the required arrest may be granted such Court issues the Arrest Ruling. In such Ruling the Court determines the time period which cannot be more than 15 days within which an applicant shall file claim of the merits with the competent Court. If a claimant fails to file a claim of the merits within 15 days the Arrest Ruling shall be annulled by the Court.
Copies of the Arrest Ruling are sent to the parties involved in the case and to the port authorities where a ship and to the state authorities responsible for the ship registration.
The Arrest Ruling or the Ruling
refusing arrest of ship may be argued in the Appeal or
The enforcement of the Arrest Ruling shall be carried on the basis of the enforcement writ issued by the Court and passed to the local Enforcement Service at such district where the relevant port locates.
A ship which has been arrested must be released by the Court from the arrest: (a) where a ship had already been arrested in respect of the same maritime claim (b) where the owner has furnished security and (c) where the claimant has not file the statement of claim on merits as it was requested by the Court.
The Court shall release the ship from the arrest after sufficient security is provided by the owners.
Security may be in the forms of banking guarantee, guarantee of insurance company, Guarantee of P&I Clubs and a bail (payment into Court).
Security’s form and amount is subject to the agreement between the ship owners and the claimant. If the parties fail to reach such agreement the Court orders the security, which shall be provided by the owners.
In accordance with the article 393 of the Russian Merchant Shipping Code the Court may as a condition of the arrest of a ship or of permitting an arrest already effected to be maintained impose upon the claimant who seeks to arrest or who has procured the arrest of the ship the obligation to provide security of a kind and for an amount, and upon such terms as may be determined by that Court for any loss which may be incurred by the defendant as a result of the arrest including but not restricted to such loss or damage as may be incurred by the defendant in consequence of the arrest having been wrongful or unjustified or excessive security having been demanded and provided. However according to Russian procedural law (paragraph 4 of the article 99 of the Arbitration Procedural Code) an applicant applying for the preliminary security measures shall provide the counter security in an amount equal to the amount of claim I believe that this does not apply to the case connected with the arrest of the ship. The provisions stated in the Russian Merchant Shipping Code shall prevail over the provision contained in the procedural code due to the rule lex specialis derogat generali. However as far as I can judge from the known Russian Court practice the Courts often impose the obligation upon the claimant to provide security (see for example the Judgment of the Federal Arbitration Court of Moscow Region dated 11th of December 2001) where the Court ordered the arrest of three ships of the defendant obliging the claimants to provide banking guarantee in an amount of 1 000 000 USD to the certain date).
Can you arrest for security only.
Russian Court arrested the ship shall have jurisdiction to consider the case upon the merits in cases stated in the article 7 of the Arrest Convention 1952 in case if this Convention applies.
Also Russian procedural law
(article 402 of the Russian Civil Procedural Code, article 247 of the Russian Arbitration
Procedural Code) provides the jurisdiction to Russian Courts consider the case upon its
merits if the assets of the defendant locate within
Sister / associated ship arrests.
Under paragraph 2 of the article
390 of the Russian Merchant Shipping Code arrest is also permissible of any other ship or
ships which when the arrest is effected, is or are owned by the person who is liable for
the maritime claim and who was, when the claim arose: owner of the ship in respect of
which the maritime arose; or demise charterer, time charterer or voyage charterer of that
ship. This rule does not apply to claims in respect of ownership or possession of a ship.
These provisions correspond to the Arrest Convention 1999. Also
Recognizing liens (which law).
Under the article 424 of the
Under Russian law the following claims against the ship owner of the vessel shall be secured by maritime lien in respect of the ship if they relate to:
Priority of liens.
Claims secured by maritime lien in respect of the ship shall take priority over claims arising out of the obligations secured by a registered mortgage of the ship.
No claims shall take priority over maritime liens except the claims for the costs of the raising of the sunken ship.
Claims secured by maritime lien on a ship shall rank in order as it is listed above provided however that maritime liens securing claim for reward for the salvage of the ship shall take priority over all other maritime liens which have attached to the ship prior to the time when the operations giving rise to these liens were performed.
In Russia the claimant may be held liable for any loss which may be incurred by the defendant as a result of the arrest and for which the claimant may be found liable including but not restricted to such loss or damage as may be incurred by the defendant in consequence of the arrest having been wrongful or unjustified or excessive security having been demanded and obtained. This Russian law rule is fully based on the Arrest Convention 1999.