The third issue of the journal “Maritime Law” in 2022 covers the calendar period from July to September. We summarise the quarterly statistics on “maritime” disputes heard by commercial courts. As before, the most significant cases have been reviewed and commented on in the journal.

The Cases Heard by the Commercial District Courts (Cassation Instance)

Between July and September 2022, only 9 cases mentioning the Merchant Shipping Code of the Russian Federation (hereinafter – the MSC RF) were heard by the commercial court of the district. Two cases of these dealt with tax law issues unrelated to merchant shipping. Therefore, these two cases have not been taken into account in the table of case categorisation above.

As in the previous periods, the courts mainly consider cases in connection with recovery under various types of contracts. Such cases are of little interest because they deal with a trivial issue like the contract has been performed and payment for such performance has not been received.

At the same time, there have also been a number of unique cases before the commercial courts of cassation instance. For example, case No. A40-215440/2021, heard by the Commercial Court of the Moscow District, deals with the issue of challenging an order of the Federal Service for Supervision of Natural Resources (hereinafter – Rosprirodnadzor) to eliminate environmental violations. The case was interesting particularly since disputes over Rosprirodnadzor’s orders are seldom, and in this case, the claimant had even managed to challenge the part of the order. Challenging Rosprirodnadzor order is also the subject of case No. A40-83615/2022. So far, this case has only been heard by the court of the first instance, and the claimants have not achieved similar success yet.

A case heard by the Commercial Court of the Northwestern District No. A56-96958/2021 also deserves special attention. It raised the question of whether the injury suffered by a barmaid in a fall from a gangway constituted an injury sustained by a crew member in the performance of her employment function. In this case, the Court judged the case in line with the Russian and international trends. Firstly, the court has recognised that all people who are on the vessel while it is in service are crew members. Secondly, the time of crew members’ employment was acknowledged the entire time the vessel is in service regardless of the actual performance or nonperformance of the employment functions by the crew members.

Therefore, only 7 cases referring to the MSC RF and concerning merchant shipping were heard by the commercial courts of cassation instance. Six of these cases dealt with private law issues, mainly the recovery under various types of contracts. Only one case dealt with public law matters.

The Cases Heard by the Commercial Courts of Appeal

The courts of appeal heard only 30 cases during the period under review referring to the MSC RF, which were at the same time maritime in nature. Only 6 of these 30 cases concern the public law matters.

In the private law field, the parties are mainly in dispute over recovery for non-performance of a contract. Usually, the essence of the case is that one party provides evidence of services or works that have been performed and the other party disputes the quality of those services or works. In addition, interim measures in the form of arrests of vessels are also disputed relatively frequently, as are demurrage and environmental damage disputes. In general, the distribution of cases by category differs only slightly from previous statistical periods. We also observe a few interesting cases.

Such an interesting case is Case No. A51-19431/2021 heard by the Fifth Commercial Court of Appeal. In the proceedings in question, the insolvency administrator sued to recover lost profits from the freight forwarder for non-performance of the contract. The court rejected the claim. This judgement is also interesting that in rejecting the claim the court did not refer to Art. 7 of the Federal Law “On Freight Forwarding Activities” which expressly limits the freight forwarder’s liability which can, with some assumption, be attributed to actually incurred damages. At the same time, the reasonable nature of the limitation of the freight forwarder’s liability in the said laws is rather questionable. It may be that the absence of a reference to that provision in the present case is justified.

In the sphere of public law, appellate courts deal with mainly administrative liability for illegal border crossing or customs violations.

Therefore, in the period under review, only 30 maritime cases were heard by the commercial courts of appeal. Most of these cases are not of particular interest and relate to simple disputes over the imposition of fines or the recovery under an agreement. However, interesting cases might also be found. These cases may demonstrate the attitude of Russian judicial practice towards certain legal problems to a greater extent.

The Cases Heard by the Commercial Courts of First Instance

There were found 108 maritime cases in the Archive of commercial court judgement (ras.arbitr.ru) in the courts of first instance. 63 of these cases were related to private law issues and 45 were related to public law matters. Tax disputes, disputes on land rights and seaport constructions, as well as supply disputes were not included in the statistics, as these cases do not have a maritime specific and are not related to merchant shipping. However, several of the cases heard in the first instance and included in the statistics were passenger transport disputes, in particular, disputes over passenger service in the port.

In the private law field, the parties are, as before, mainly in dispute over the recovery of payments under various contracts. Such cases are of interest only in rare cases. For example, in Case No. A56-13839/2022 the Commercial Court of Saint Petersburg and Leningradskaya Oblast examined the issue of recovery of fees for a maritime broker’s services. In that case, the court had established the criteria for the effectiveness of brokerage activities.

Case No. A24-2335/2021 heard by the Commercial Court of Kamchatskiy Krai is also interesting. In this case, a commercial legal entity was able to recover damages caused by unlawful administrative harassment by the Federal Security Services. In the case in question, the concept of state tort was implemented.

Case No. A40-190101/2017 heard by the Commercial Court of Moscow is also noteworthy. In this case, a vessel (flag – Togo) collided with the Russian Navy intelligence vessel “Liman”. As a result of the collision, the “Liman” wrecked. The Russian Defence Ministry filed a claim against the foreign company in the Commercial Court of Moscow. The court had to establish the law applicable to the relations in question. It is indicative that, in establishing the applicable law, the court referred to Art. 1211 of the Civil Code of the Russian Federation, which governs the applicable law to contracts, although there was a tort in this case. Perhaps, the court wished to justify applying Russian law to the relations arisen and, in lack of other means, used this Article. Although in this case, the application of Russian law was unlikely to be challenged, given the existence of a tort on the high seas and in respect of Russian immovable property. Another significant factor, in this case, is the enforceability of the judgment. The vessel is not connected in any way to Russia, the shipowner has no relations with Russia. Apparently, enforcement will have to take place in Lebanon (the place shipowner’s incorporation) or Togo (the flag country of the vessel) or try to arrest the vessel in a third jurisdiction. It is questionable whether the Ministry of Defence will take all or some of the above actions.

Another dispute involving the specific nature of public legal entities is Case No. A32-34450/2021 heard by the Commercial Court of Krasnodarskiy Krai. In this claim, the Azov-Black Sea Branch of FSUE “Rosmorport” filed a claim against individual entrepreneur Soldatov V.F. to recover RUB 339,90 of port duties. Such cases for the recovery of almost RUB 340 look rather ironic in the area of constant debate on the need to ensure the normal functioning of the judicial system and avoid courts excessive workload. Perhaps, it should be started by changing the approach of state companies and agencies, whereby every unpaid debt must be sued, even if it is almost seven times less than the minimum state duty. In this case, it is also indicative that FSUE “Rosmorport” lost the case and instead of losing RUB 340 it lost RUB 2340 including the state duty. The claimant fought vigorously and lodged an appeal, but this was also rejected. The deadline for filing a cassation appeal has not yet expired.

In the area of public law, the vast majority of cases in the commercial courts of first instance were related to the illegal border crossings. Some cases deal with challenging a harbour master’s orders to remove a vessel from the register, a claim to include a vessel in the ship schedule, as well as antitrust and customs violations.

There are also some interesting cases related to public law issues. For example, the Commercial Court of Saint Petersburg and Leningradskaya Oblast heard case No. A56-13839/2022 to challenge an order to refuse to declare a vessel missing. In case No. A51-2094/2022, the FSBI “Administration of the Amur Basin of Inland Waterways” and the Federal Service for Supervision of Transport litigated to determine which state authority has to register the transport accident in its books.

Conclusion

Therefore, between July and September 2022, 144 cases were heard by the commercial courts of first, appellate, and cassation instances. 93 of these cases dealt with private law matters and 51 with public law ones. The majority of the cases, as in previous periods, dealt with recovery under various contracts. However, there were several unique cases, some of which are highlighted in this statistical overview. ■

The review was prepared by Bulat Karimov