Andrey V. Lopatin,

In practice, there are many situations a ship is seized within the jurisdiction of the Russian Federation for claims that are not maritime. For the majority of ship owners, especially foreign ones, the availability of such an option for the arrest initiator in the context of international laws is still absurd.

The Merchant Shipping Code of the Russian Federation clearly states that a vessel can be arrested only for maritime claim. At the same time, Article 388 of the Merchant Shipping Code of the Russian Federation, which establishes the authority for such an arrest, makes several reservations and significantly expands the list of cases in which a ship can be arrested or detained. It is worth immediately making a reservation that although the author does not consider arrest and detention as the same measure of restrictions on a vessel, this article will touch upon both institutions of encumbrances.

The first exception is the right of harbor master to refuse to issue a permission for the vessel to leave the seaport due to the ship’s unsuitability for navigation, violation of the requirements for loading, supplying the ship, manning the ship’s crew or the presence of other defects of the ship that endanger the safety of its navigation and life or health of people on board or the threat of causing damage to the marine environment, as well as non-compliance with the requirements in the field of labor relations in maritime navigation, violation of the requirements for ship documents, instructions of the sanitary-quarantine and migration services, customs, border authorities of the federal security service and others authorized state bodies, non-payment of the established port dues. All of the above cases may be grounds for refusal to issue a permission for the vessel to leave the seaport. In the event that the vessel is unfit for sailing, deficiencies or violation of labor law requirements (for example, non-payment of wages), there is also an additional ground for detention (code 30 – detention) of the vessel by the port state control of the port of location within the framework of, for example, Paris Memorandum of Understanding on Port State Control. In most cases, it is possible to remove such a restriction only after eliminating the identified reasons of detention. In case of disagreement with the results of the inspection and detention, the ship owner has the right to challenge the actions of the harbor master using administrative or judicial procedure. However, the number of complaints filed and the percentage of satisfaction of such complaints are very low, since in most cases the violations are indeed confirmed (see, for example, case No. A42- 10501/2017).

The second exception is the possibility of using the seizure of a vessel for the purpose of enforcement of a court arbitration that has entered into legal force. This exception can be formally divided into two types – an arrest imposed by a court and an arrest imposed by a bailiff officer.

The current procedural legislation provides the court with the right to take any interim measures not prohibited by law against vessels for the purpose of ensuring the enforcement of court decision or arbitral award. The Arbitration Procedure Code of the Russian Federation both (Article 100) and the Civil Procedure Code (Article 213) have a brief description of the rights granted to the courts, but this is explained by the similarity of the procedure with the adoption of interim measures. Also, rules of the current procedural legislation of the Russian Federation do not contain a direct prohibition on arrest of a vessel for the possibility of enforcement of a court decision on recovery of amounts that are not a maritime claim. In the framework of the case No. 2-981/2017 (Zheleznodorozhny District Court of Rostov-on-Don), a compensation (damage) was recovered from a foreign company for unpaid wages to crew members who were not employees of this company, but within the framework of enforcement proceedings it was stated that defendant had owned several vessels. An application was submitted to the court for the seizure of the vessel entered the seaport in accordance with Article 213 of the Civil Procedure Code of the Russian Federation, but the application was refused due to the applicants’ failure to prove the proportionality of the requirements for the value of the vessel. At the same time, in its ruling, the court directly confirmed the possibility of using an arrest in relation to the vessel under this article of the Civil Procedure Code of the Russian Federation.

Arrest for the purpose of enforcement a court decision can also be imposed by bailiffs. In order to enforce the judgment of Zheleznodorozhny District Court of Rostov-on-Don No. 2-2647 / 2017 a vessel was seized by the bailiff officer as a property of the debtor in accordance with Article 80 of the Federal Law of 02.10.2007 No. 229-FZ “On Enforcement Proceedings”.

A precedent case is also the arrest by bailiffs of the city of Astrakhan of tug of a foreign company in the framework of enforcement proceedings to recover debt for the laid-up of the tug. The foreign shipowner challenged (case No. A06-2754/2017) the actions of the bailiffs on tug seizure before the court, however, having received a negative court decision the actions of bailiffs were recognized as legal. The court noted that in this case the bailiff had seized the debtor’s property in order to ensure the enforcement of the court decision containing claims for tug as property. The possibility of such actions, as well as the possibility of demanding the necessary information is directly provided for by law (part 1 of Article 64 of the Law on Enforcement Proceedings, part 2 of Article 12 of the Law on Bailiffs).

Another one exception to the rule is the right of state bodies to arrest a vessel and cargo provided by legislation of the Russian Federation. Arrests of this kind occur with a certain frequency in the South of Russia and are used mainly by customs and border control services, in rare cases and by enforcement authorities. The main feature of arrests imposed on vessels by customs authorities in the framework of cases of administrative offenses is the impossibility of replacing the arrest with another security measure, for example, a bail. This circumstance significantly worsens the position of the shipowner in connection with long periods of staying of vessel and incurring costs for its storage or anchorage on the road of seaport. Arrests of this kind are especially painful for vessels flying a foreign flag, since given the special border and customs regime, a foreign ship can stay in limited berthing areas – roads and berths with open customs and border regime. As in case with the possibility of arresting a vessel for maritime claim against a bareboat charter charterer, the legislation of the Russian Federation on administrative offenses and customs law of the Eurasian Economic Union allows arrest of a vessel regardless if the offender is the owner of the vessel or not.

The classic examples of the arrests of ships by the customs authorities in recent years have been cases of administrative offenses related to the mv “Veres” (flag of Saint Vincent and the Grenadines), mv Magellan (flag of Saint Vincent and the Grenadines), the fleet of Crystal Marine LLC.

At the same time, in practice, there are also positive examples of release of vessels from arrests. In the framework of the case No. А06-11436/2019 commercial courts found illegal the actions of the customs authority on seizure of auxiliary fleet vessels “Marinus”, “Tethys”, “Capella”, “Surveyor” in terms of a ban on their use for their intended purpose. The courts of three degrees found that the customs did not prove the fact of uncontrolled movement of ships across the Caspian Sea and that further authority to use and dispose of vessels could lead to the loss of items of administrative offenses. This and so far the only example at the moment testifies a slight change in approach of Russian courts to cases of this kind. Within the framework of the given example, the courts not only supported the ship owner, giving him a chance to keep the company and continue to carry out commercial activity, but also slightly changed the negative trend of recent years in cases of administrative offenses related to such a complex object as a sea vessel.

Another innovation of recent years is the possibility of seizure by customs authorities of vessels as goods for which customs payments have not been paid. A sad example here is also mv Magellan (the flag of Saint Vincent and the Grenadines), whose confiscation and arrest were canceled on June 28, 2019, but three weeks later it was again arrested by the customs as a goods under Article 78 of the Federal Law “On Customs Regulation in the Russian Federation and on amendments to certain legislative acts of the Russian Federation” dated 03.08.2018 No. 289-FZ. This provision has never been applied to sea-going ships before, it is actually an interim measure aimed at the possibility of the state levying a claim on a ship as a goods for which customs payments have not been paid. The litigation on recognizing the arrest of mv Magellan as goods No. А53-27078/2019 ended in the first instance without being challenged by the higher courts, however, the events under the main case No. А53-27770/2019 concerning the foreclosure on the vessel developed extremely unpredictably. The first instance supported the customs and issued, in our opinion, an unenforceable decision which was revised by the court of appeal, but the court of cassation did not agree with the conclusions of the court of second instance and the conclusions of the Commercial Court of Rostov Region were upheld.

The most absurd are the arrests imposed on vessels and floating objects by law enforcement authorities and magistrate courts in the framework of criminal cases initiated against individuals. In 2019, in the seaport of Rostov-on-Don, within the framework of commenced a criminal case an arrest was imposed on a sea barge that had been floated from the Caspian Sea to the Black Sea. Investigating authorities motivated their request for imposition of an arrest by the need for such an extreme measure in connection with the possibility of confiscation (turning into state revenue) of the barge as a remedy of committing a crime, the possibility of executing a civil claim in terms of collecting customs payments which were not paid by a Russian legal entity for the temporary import of this barge. At the same time, a key feature of Article 104.1 of the Criminal Code of the Russian Federation is the ownership of property by the convicted – an individual. In this case, the barge was owned by a foreign company that had no connection to the criminal case. The decision of the court of first instance to seize the foreign barge as a remedy of committing a crime was canceled by the court of appeal as unsubstantiated and unlawful.

Also, Russian law enforcement authorities in rare cases apply another restrictive measure in relation to motor vessels and floating objects – “arrest” as an evidence. Such a mechanism is more accurately called the recognition of an object as material evidence and its attachment to the case file. At the same time, the application of such an exotic measure is indeed logical in the framework of cases of collisions or accidents on vessels for the pursuit of the sole purpose – to preserve traces of an incident or crime, but clearly not in the framework of criminal cases on the collection of unpaid customs payments or taxes initiated against individuals. In any case, the recognition (in fact, arrest) of the vessel as evidence should be a temporary measure since the traces of any crime or incident tend to disappear, although Russian law enforcement authorities think otherwise and such arrests can burden the vessel for years until the criminal case is completed. A similar absurd practice is also present in other countries, for example in Ukraine (arrest of mv “Nika Spirit” as evidence for blocking the Kerch Strait in 2019).

The practice of arresting vessels by state continues and nowadays. Not so long ago, Rostov customs seized the tanker “Alexander Shemagin”. The owner of the vessel appealed against the customs actions in court, however, within the framework of case No. А53-494/21 the proceedings were terminated at the request of the shipowner.

The above examples of arrests of ships indicate that shipowners and especially foreign ones, need to take into account the fact that vessel can be arrested in Russia not only on a maritime claim as an interim (or preliminary interim) measure, but also in order to fulfill the imposed against the owner of the vessel by a court decision as well as by various state bodies within the framework of the current norms of public law. ■