Facts of the case: LLC “Kamchatskenergo” (Charterer) and LLC “NIKO” (Carrier) concluded an agreement for the carriage of goods by sea – fuel oil in the amount of 6,711 tons (hereinafter, the amount of cargo is approximate for convenience), under which the Carrier had to transport fuel oil from the port of Nakhodka to the port of Petropavlosk-Kamchatsky. At the port of loading, the cargo was loaded on board the tanker from shore tanks. At the port of discharge, the cargo was unloaded from the tanker also into the shore tanks.

Upon completion of the discharge of the cargo and its measurements, it was established that the amount of the unloaded cargo was 6,674 tons, that is, with a difference of about 37 tons. The rest of the cargo on board the vessel was not found.

The Charterer alleged that the Carrier allowed the loss of cargo in the amount of 37 tons and filed a claim to recover the value of the lost oil product.

Ruling of the courts: the Commercial Court of the Kamchatka Territory found fully in favour of the Claimant, considering that the Carrier did not prove absence of its fault in the loss of cargo and the existence of circumstances precluding his responsibility. The fact, nature and moment of the situation that resulted in the loss of the disputed cargo were established by the court.

The 5th Commercial Court of Appeal agreed with the conclusions of the first instance court, noting the observance of the rules on the distribution of the burden of proof and emphasizing that the defendant as a carrier in this case is responsible for the loss of the cargo entrusted to it by the claimant.

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When considering the cassation appeal, the Сommercial Сourt of the Far Eastern Circuit confined itself to establishing a significant violation of the rules of commercial procedure law, which leads to the unconditional reversal of the judicial act.

Such a violation was the consideration of the dispute by the Commercial Court of the Kamchatka Territory, which, when accepting and considering the claim, was essentially guided by the clause of the contract, which set out the consideration of all disputes from the contract to its jurisdiction (jurisdiction clause).

The court of cassation overruled the judgments and remitted the case for revising at the location of the Carrier in connection with violation of the rules of exclusive jurisdiction provided for in part 3 of Article 38 of the Commercial Procedure Code of the Russian Federation. The latter establishes that a claim against the carrier arising from the contract for the carriage of goods, including the event that the carrier is one of the defendants, shall be brought to the commercial court at the location of the carrier.

Commentary: It should be noted that the jurisdiction agreement between the parties to a contract for the carriage of goods by sea (jurisdiction clause, Article 37 of the Commercial Procedure Code of the Russian Federation) is a common phenomenon. However, often the parties do not take into account that the legislator imperatively attributed disputes arising from the contract for the carriage of goods to the exclusive jurisdiction of the court at the location of the carrier, which makes such an agreement in fact meaningless and misleading of the parties to the contract. The competition between jurisdiction clause and exclusive jurisdiction ends in victory for the latter.

Nevertheless, in a situation where the clauses in regard to the competent court other than at the location of the carrier were included in the contract, then the unenforceability of such clauses is not always absolute. This is due to the fact that exclusive jurisdiction is one of the “guarantees” of the carrier’s rights and it “protects” only the interests of the carrier. It follows that the jurisdiction clause agreed by the parties should be ignored in case of the claim against the carrier, but it should be applied in relation to the claims of the carrier against the charterer. In other words, it should have force only unilaterally since both parties agreed to a certain court, which makes it wrong to completely ignore such an agreed jurisdiction.

Therefore, the parties to the carriage relationship should remember that it is impossible to rescind at their own discretion the jurisdiction of the court at the location of the carrier. The contractual clauses establishing such jurisdiction have no effect for the court, except for the situation when the carrier itself files a claim against the customer, the charterer.

The issues of jurisdiction over claims arising from the carriage of goods are of great importance for litigation in the field of carriage by sea since the revising of the case by another, competent court not only leads to an increase in legal costs and time costs, but also creates the risk of a judge making a judgment different from that which has been rendered previously.

However, the latter is not at all necessarily adverse for the party to the dispute that lost the case on the merits. And even though the competent court is not formally bound by the already rendered and reversed judgment, in practice, the judges very often take a position similar to that taken by the tribunal that improperly heard the dispute (especially in cases where the higher courts only establish a violation of the commercial procedure law, but not other violations in regard to the case).

This is how the commented case most likely will terminate when it is heard after it has been transferred in accordance with prescribed jurisdiction to the Commercial Court of the Primorsky Territory. In this regard, we will not give here a detailed commentary on the merits of the dispute, confining ourselves to only some commercial procedure issues, and we will wait for the judgments by the court, whose jurisdiction over this case is established. Of course, the case is not only of theoretical interest, but also of a practical one, and it will certainly be expanded on in the next commentary, based on the judgments to be rendered.

Finally, a particular interest in of the sphere of exclusive jurisdiction over claims against carriers is the claims arising from non-contractual damage (in tort claims). Even though the considered case does not refer to such a dispute, in our opinion, it would be appropriate to make a reservation in regard to such tort claims.

Most of the disputes arising from the carriage relationship are indeed related to contractual claims, and in such cases, as a rule, there are no problems with the application of the rules of exclusive jurisdiction.

However, what if the court cannot unambiguously determine at the stage of accepting the claim for consideration or during the preliminary court hearing – whether the claim is nevertheless contractual or a tort one? The problem is aggravated by the fact that the claimant formulates its claims independently and in non-obvious cases, i.g. with a large number of documents, including those submitted at a certain stage in a foreign language without due translation, may (erroneously or purposefully) refer to the rules of tort law. In such case, there may be a risk of the case heard in lack of the jurisdiction (reservation – except for situations where the carrier is the only defendant in the case, since in this situation the claim is brought at the court if the respondent’s location, which actually coincides with the rules on exclusive jurisdiction; in such situation the rationale should be exactly the same as in the situations with jurisdiction clauses described above).

So, for example, in case No. А40-174613/2019 in regard to claims against two defendants (contractual and actual carrier), the claimant recovered the value of the damaged cargo on the vessel, referring simultaneously to the contract and tort law. In the appellate proceedings the judgment of the court of first instance concerning the dismissal to transfer the case to the competent court, the courts of all higher instances held that there were no violations of exclusive jurisdiction since the claim was filed on the basis of the contractual terms, and the court was not obliged to explore all the circumstances of the case when accepting the claim for consideration to establish the correct jurisdiction (of course, it is difficult to agree with this position since such an approach significantly burdens the judicial system, when the court nevertheless comes to the conclusion that the rules of the carriage by sea are to be applied).

In such cases, the challenge is the literal wording of part 3 of Article 38 of the Commercial Procedure Code of the Russian Federation, dealing with claims arising from the contract (based on the contract).

However, in practice courts sometimes finds that the rules concerning carriage shall be applied even to the tort claims against carriers. So, for example, the courts sometimes finds that the mandatory complaints procedure for claims against carriers shall be obeyed (for tort claims, such a procedure is not stipulated). The courts also apply the rules of the carriage by sea to such tort claims, arguing that the claims, although they do not arise from the contract of carriage, are brought in connection with the carriage of goods (for example, in the cases No. А51- 7384/2011, А63-10184/2015, А40-174613/2019). Hence, it can be concluded that the rules regarding exclusive jurisdiction can be applied to the tort claims against carriers in a similar way.

The issue of determining the actual nature of the claim and often accordingly the correct jurisdiction can be very pressing since often the parties bring their claims at the end of the prescriptive period. It all depends on the stage at which the court establishes a violation of jurisdiction rules. If a violation is found during the consideration of the case, then it will be transferred according to the jurisdiction rules (Article 33 of the Commercial Procedure Code of the Russian Federation), as well as if the judgment was reversed by a higher court as in the case under consideration. However, if a violation of jurisdiction rules is established by the court before the claim is accepted for consideration, the claim will be returned to the claimant (Article 129 of the Commercial Procedure Code of the Russian Federation), which, under certain circumstances, may pose a serious risk of the prescriptive period to be time-barred, as, for example, in the case No. А41- 34703/2021. Such a risk, for example, is possible if a claim was erroneously qualified as a tort claim by the claimant, and it is filed in the last days of the special prescriptive period, which can significantly complicate the timely re-bringing the claim to the competent court. ■