Newbuilding contractsTransfer of title
When does title in the ship pass from the shipbuilder to the shipowner? Can the parties agree to change when title will pass?
Yes, the parties can agree on the moment when the title to the ship in construction shall pass. Generally, if the parties agree that until completion the title remains with the builder, the title will pass upon delivery, which is normally witnessed by signing a bilateral protocol (act) of delivery.Refund guarantee
What formalities need to be complied with for the refund guarantee to be valid?
If a refund guarantee is issued in accordance with Russian law, it must be issued in written form by the guarantor as its unilateral obligation and contain the following requisites:
- date of issue;
- names of the principal, beneficiary and guarantor;
- reference to the principal obligation secured by the guarantee (an obligation of the builder to repay the amounts advanced by the customer);
- the amount payable under the guarantee or the order of its determination;
- term of validity of the guarantee; and
- conditions upon which the guarantee will become payable.
Are there any remedies available in local courts to compel delivery of the vessel when the yard refuses to do so?
The competent court can (upon application of the customer) order the builder to perform in kind its undertaking to deliver the vessel to the customer.Defects
Where the vessel is defective and damage results, would a claim lie in contract or under product liability against the shipbuilder at the suit of the shipowner; a purchaser from the original shipowner; or a third party that has sustained damage?
The builder’s liability for the vessel’s compliance with the requirements of the contract and of applicable regulations is enforced through the warranty (product liability) obligations. Claims under the warranty may be brought by the builder’s customer, whereas the original customer’s purchaser will need to receive assignment of the relevant rights to be able to claim from the builder directly. A third party that sustained damage will need to claim from the shipowner, who may, in turn, have the right of recourse against the builder.
Ship registration and mortgagesEligibility for registration
What vessels are eligible for registration under the flag of your country? Is it possible to register vessels under construction under the flag of your country?
Russian law (in article 7 of the Merchant Shipping Code) defines a ‘ship’ as a ‘floating structure used for the purposes of merchant shipping’. Based on this definition, most types of vessels may be eligible for registration under the Russian flag. Ships under construction may also be registered, but strictly speaking, they are not registered under a flag, as they are registered in a separate registry of ships under construction and they do not (yet) have the right to navigate under the flag.
Who may apply to register a ship in your jurisdiction?
Russian citizens, companies incorporated in the Russian Federation, as well as the Russian state and municipalities, are entitled to apply to register ships under the Russian flag. Foreign nationals and foreign companies can apply for registration of ships in the Russian Open Registry of Ships.Documentary requirements
What are the documentary requirements for registration?
Registration is effected upon an application filed to the registering authorities (harbour masters) by the shipowner, which must be accompanied by a confirmation of the vessel’s compliance issued by an authorised classification society, by documents confirming the applicant’s rights to the vessel (shipbuilding contract, sale-purchase contract, bareboat-charter (in the case of parallel registration)) and a confirmation of payment of the respective state fees.Dual registration
Is dual registration and flagging out possible and what is the procedure?
Dual registration is possible both to or from the Russian flag. A ship that is permanently registered under a foreign flag may be transferred under the Russian flag if it will be bareboat-chartered to a Russian national or legal entity, for the period not exceeding the term of the bareboat charter. The ship’s registered owner and holders of all registered encumbrances (if any) must consent to such change of flag and the maritime administration of principal registration must also confirm the possibility of reflagging and suspend the right of the ship to sail under the main flag for the duration of the period when the vessel will be sailing under the Russian flag.
If a ship that is permanently registered under a Russian flag is bareboat-chartered to a foreign national or legal entity, it must be transferred under a foreign flag, provided that the registered owners of all registered encumbrances (if any) consent to such reflagging. Permission for such a transfer must also be obtained from the Federal Service for Supervision in the field of transport. Permission for reflagging is issued for the term of not more than two years, but it can be extended within the term of the duration of the bareboat charter.Mortgage register
Who maintains the register of mortgages and what information does it contain?
A mortgage of a ship must be registered with the same authority that registered the vessel itself and the records in respect of a mortgage will show (in addition to the general information on the vessel) the name of the mortgagee, the amount secured by the mortgage and the term of the mortgage.
Limitation of liabilityRegime
What limitation regime applies? What claims can be limited? Which parties can limit their liability?
The Russian Federation is a party to the 1976 Convention on Limitation of Liability for Maritime Claims, together with its 1996 Protocol. New limits, however, started to apply in the Russian Federation in June 2015 (being incorporated into the Merchant Shipping Code (MSC)) in July 2016).
Shipowners, salvors and liability insurers are entitled to use the limitations. Liability can be limited for the following claims:
- claims in respect of loss of life or personal injury or loss of or damage to property, occurring on board or in direct connection with the operation of the ship or with salvage operations;
- claims in respect of loss resulting from delay in the carriage by sea of cargo, passengers or their luggage;
- claims in respect of other loss resulting from infringement of rights other than contractual rights, occurring in direct connection with the operation of the ship or salvage operations; and
- claims of a person other than the person liable in respect of measures taken to avert or minimise loss for which the person liable may limit its liability and further loss caused by such measures.
What is the procedure for establishing limitation?
Limitation can technically be invoked by the parties entitled thereto without creating a limitation fund in the court or in the arbitration tribunal that considers the matter; however, management of the fund outside of the court or arbitration is likely to be more problematic. A limitation fund can be provided by cash deposit, or by way of providing a guarantee issued by a bank or insurance company. The amount of the fund is calculated on the basis of the limits as provided in the Convention (and Chapter XXI of the MSC, which implemented provisions of the Convention into Russian national legislation).Break of limitation
In what circumstances can the limit be broken? Has limitation been broken in your jurisdiction?
A party that is generally entitled to limit its liability will lose the right to a limitation if losses were incurred due to the party’s own acts (or omission) that have been committed with an intent or due to gross negligence.Passenger and luggage claims
What limitation regime applies in your jurisdiction in respect of passenger and luggage claims?
Limitation regime provided by the 1974 Athens Convention relating to the Carriage of Passengers and their Luggage by Sea would apply with the exception of cases where the passenger and the carrier are Russian nationals or legal entities, general provisions of Russian law on compensation of damages will apply, which provide that damages must be compensated in full (however, in practice, specific methods of calculation and limits of compensation still apply).
Port state controlAuthorities
Which body is the port state control agency? Under what authority does it operate?
Principal port state control functions are exercised by the harbour masters of the sea ports. Harbour masters form part of port administration and function under the federal agency for the sea and river transport.Sanctions
What sanctions may the port state control inspector impose?
The harbour master can order an inspection of the ship, can prohibit the vessel from entering or leaving the port and can also impose fines for certain types of administrative violations (eg, breaching the safety of navigation rules).Appeal
What is the appeal process against detention orders or fines?
Orders imposing restrictive measures or fines can be appealed to the superior executive authority or to the local court.
Classification societiesApproved classification societies
Which are the approved classification societies?
Seagoing vessels intended for registration under the Russian flag can have class issued by the Russian Maritime Register of Shipping, Bureau Veritas or RINA.Liability
In what circumstances can a classification society be held liable, if at all?
The classification society can be held liable if losses are incurred by a party due to the breach by the classification society of its contractual obligations.
Collision, salvage, wreck removal and pollutionWreck removal orders
Can the state or local authority order wreck removal?
Yes. This right is vested with the harbour masters or port administration of the seaport that is closest to the wreck or other sunken property.International conventions
Which international conventions or protocols are in force in relation to collision, wreck removal, salvage and pollution?
The 1910 Conventions for the Unification of Certain Rules of Law with respect to Collisions between Vessels and for the Unification of Certain Rules of Law respecting Assistance and Salvage at Sea are both still in force for the Russian Federation, as is the 1989 International Convention on Salvage and the 1972 Convention on the International Regulations for Preventing Collisions at Sea.
Russia is also a party to the International Convention on Civil Liability for Oil Pollution Damage and to the 2001 International Convention on Civil Liability for Bunker Oil Pollution Damage.
The 2007 Nairobi Convention is not in force.
Provisions of the 1996 International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, although not yet entered into force, have been enacted as Chapter XIX of the Merchant Shipping Code), and currently these requirements apply as the national regime.Salvage
Is there a mandatory local form of salvage agreement or is Lloyd’s standard form of salvage agreement acceptable? Who may carry out salvage operations?
There is no mandatory form for a salvage contract and Lloyd’s standard form is used rather often. Salvage operations generally can be carried out by any party. However, there also exists a specialised state institution Marine Rescue Service, which ran by the Ministry of Transport and by the Federal Agency for the sea and river transport.
Ship arrestInternational conventions
Which international convention regarding the arrest of ships is in force in your jurisdiction?
Russia is a party to the 1952 International Convention Relating to the Arrest of Sea-Going Ships, but at the same time, Chapter XXIII of the Merchant Shipping Code (MSC), which regulates issues of ship arrest, also incorporates certain features of the 1999 Convention.Claims
In respect of what claims can a vessel be arrested? In what circumstances may associated ships be arrested? Can a bareboat (demise) chartered vessel be arrested for a claim against the bareboat charterer? Can a time-chartered vessel be arrested for a claim against a time-charterer?
Article 388 of the MSC provides that the vessel may be arrested only on the basis of a maritime claim. The list of maritime claims is provided in article 389 of the MSC and it includes:
- loss or damage caused by the operation of the ship;
- loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the ship;
- salvage operations or any salvage agreement;
- measures taken by any person to prevent or to minimise damage, including damage caused to the environment, if such a claim is arising out of an international agreement to which Russia is a party, or out of the law or out of any agreement, as well as the damage that was caused or could be caused by such measures;
- expenses relating to the raising, removal or destruction of a ship that is sunk or its cargo;
- any agreement relating to the use of the ship;
- any agreement relating to the carriage of goods or passengers on board the ship;
- loss of or damage to the cargo (including luggage) carried on board the ship;
- general average;
- supply of provisions, materials, bunkers, stores and equipment, including containers, for operation or maintenance of the ship;
- construction, repair, modernisation or re-equipment of the ship;
- port and canal dues and charges and other waterway dues and charges;
- wages and other sums due to the master and other members of the ship’s crew with respect to their employment on board the ship, including costs of repatriation and social insurance contributions payable on their behalf;
- disbursements incurred on behalf of the ship;
- insurance premiums, including mutual insurance calls with respect to the ship, payable by the shipowner or bareboat-charterer or on their behalf;
- commissions or broker’s or agent’s fees payable by the shipowner or bareboat-charterer or on their behalf;
- any dispute as to ownership or possession of the ship;
- any dispute between two or more owners of the ship with respect to its employment and distribution of profits;
- a registered mortgage (hypothèque) of the vessel or a charge of the same nature on the ship; and
- any dispute arising out of a contract for the sale and purchase of the ship.
Associated ships can be arrested if they are owned by a party responsible for a maritime claim. Bareboat-chartered vessels can be arrested only if the same party that is their bareboat charterer at the commencement of arrest procedures was also their bareboat charterer when the claim arose. Time-chartered ships normally cannot be arrested to secure a claim against the time charterer.Maritime liens
Does your country recognise the concept of maritime liens and, if so, what claims give rise to maritime liens?
Yes. Russia is a party to the 1993 International Convention on maritime liens and mortgages and in accordance with this Convention and with article 367 of the MSC, the following claims against a shipowner are secured by a maritime lien:
- for amounts due to the master and the crew;
- for compensation of damage to life and health of an individual in direct connection with operations of the vessel;
- for salvage;
- for payment of port, canal and similar dues; and
- for compensation of actual damage caused in the course of vessel’s operations as a result of loss or damage of property other than cargo, containers or passengers’ property, unless the claims arose in connection with pollutions caused or in connection with the carriage of oil, of hazardous and noxious or radioactive substances.
What is the test for wrongful arrest?
Under Russian law, an arrest that is unlawful, unjustified or one where security obtained by arrest of the vessel is excessive could be considered wrongful. There is no uniform court practice in respect of the test for wrongfulness, but on the basis of provisions of law, an arrest where an application was knowingly brought in absence of a maritime claim (but not where the claim ultimately fails) would likely be considered a wrongful arrest.Bunker suppliers
Can a bunker supplier arrest a vessel in connection with a claim for the price of bunkers supplied to that vessel pursuant to a contract with the charterer, rather than with the owner, of that vessel?
This would not be likely, except in the case of a sister-ship arrest (where the vessel is owned by a party liable under a bunker supply claim incurred in capacity of a charterer of another vessel) or in the case where the same party is liable under such claim as a bareboat-charterer and is still the bareboat-charterer at the commencement of arrest proceedings.Security
Will the arresting party have to provide security and in what form and amount?
Provision of security is not a necessary condition for granting the arrest, but it can be ordered to be made by the court as a pre-condition for both arrest or extension of arrest.
How is the amount of security the court will order the arrested party to provide calculated and can this amount be reviewed subsequently? In what form must the security be provided? Can the amount of security exceed the value of the ship?
This issue is fully at a court’s discretion, although opinions of the parties can be considered. The amount of the underlying claim, costs of maintenance, as well as the vessel’s own value can all be taken into account when determining the amount of security.Formalities
What formalities are required for the appointment of a lawyer to make the arrest application? Must a power of attorney or other documents be provided to the court? If so, what formalities must be followed with regard to these documents?
Generally, the approach of Russian courts is still rather formal with regard to documents. A power of attorney (POA) needs to be provided unless the applicant is represented by an attorney at law, in which case it is possible to have authority to represent confirmed by a specific document called ‘advocate’s order’, issued by the proxy’s firm on the basis of a legal services contract. The POA and supporting documents (those confirming identity of the client or applicant and confirming the existence of a maritime claim) will need to be provided with sworn translations into Russian and all official (ie, non-commercial) foreign documents will need to be legalised or apostilled (Russia is a party to the 1961 Hague Convention). However, the application can be filed together with copies or scans of supporting documentation – though originals may be required to be produced later.Ship maintenance
Who is responsible for the maintenance of the vessel while under arrest?
Normally, upon arrest being imposed, the vessel is ‘entrusted’ to its master or a chief executive of the operator company for safekeeping.Proceedings on the merits
Must the arresting party pursue the claim on its merits in the courts of your country or is it possible to arrest simply to obtain security and then pursue proceedings on the merits elsewhere?
It is generally possible to seek arrest in Russia when pursuing the claim on the merits elsewhere.Injunctions and other forms of attachment
Apart from ship arrest, are there other forms of attachment order or injunctions available to obtain security?
Depending on the type of a claim, various security measures can be applied for, such as arrest or freezing of other types of property (money on bank accounts, securities, immovables), restriction for alienation of property or for other actions, etc. However, Russian courts are generally not very generous in granting security measures.Delivery up and preservation orders
Are orders for delivery up or preservation of evidence or property available?
It is possible to plea the court to order a particular party to produce a particular type of evidence, but the applicant needs to be rather specific about the item of evidence and the circumstances that it will be proving. It is also possible to apply for restrictive (security) measures in the form of prohibition to dispose of a particular property.Bunker arrest and attachment
Is it possible to arrest bunkers in your jurisdiction or to obtain an attachment order or injunction in respect of bunkers?
Theoretically, the arrest of bunkers is possible, as is the arrest of most other types of property. However, the applicant will need to provide documents confirming that the party responsible under a claim is also the owner of bunkers (which can be a practical problem in many cases).
Judicial sale of vesselsEligible applicants
Who can apply for judicial sale of an arrested vessel?
Sale can normally be applied for only by a party that has a claim recognised by an enforceable judgment or arbitration award, but even in such case, unless the claim concerns specific issues relating to the possession of the vessel (eg, claims of a mortgagee), sale of a particular vessel cannot be directly applied for. In other cases, the sale of ships will take place in the course of regular enforcement proceedings on par with other property of the respondent.Procedure
What is the procedure for initiating and conducting judicial sale of a vessel? How long on average does it take for the judicial sale to be concluded following an application for sale? What are the court costs associated with the judicial sale? How are these costs calculated?
In most cases, the claimant needs to obtain a judgment or arbitral award enforceable in Russia and apply to the competent court for the issue of and ‘enforcement order’. On the basis of this document, the bailiff service will commence enforcement proceedings, arrest the vessel and appoint the organiser of the auction. The organiser will set the date and time of the auction and publish the relevant notices, such publication needs to be made at least 30 days before the date of the auction. Taking this term into account, it will most likely take at least around eight weeks from the date of applying for the enforcement order until the date of the auction.
In recent years, new provisions in Russian law concerning enforcement against ships without application to a court (in particular, regarding ship mortgage matters) have been introduced and clarified. Although these provisions are yet to be tested in practice, they may make enforcement in respect of ships easier in the future.
Costs connected with the arrest of the vessel and organisation of the auction, as well as the costs of maintenance of the vessel until the moment of the sale (including support of the crew and crew salaries) are subject to compensation in priority over other claims from the proceeds of the sale.Claim priority
What is the order of priority of claims against the proceeds of sale?
Priority of claims may vary depending on whether the vessel is sold to enforce a registered mortgage, or in an order of general enforcement against the debtor as part of its overall estate, or in an order of bankruptcy.
In a (relatively) most common case of enforcement of a mortgage:
- costs associated with arrest and sales will be covered from the proceeds first, then – if there are any;
- claims connected with removal of a wreck;
- claims secured by a maritime lien;
- claims of a shipbuilder or repairer secured by a lien;
- claims of holders of registered mortgagee’s (in an order of priority); and
- claims of other creditors.
What are the legal effects or consequences of judicial sale of a vessel?
A properly conducted judicial sale will extinguish registered mortgages (except those that the buyer agreed to accept) and encumbrances of any other type and the buyer will obtain clean title to a vessel.Foreign sales
Will judicial sale of a vessel in a foreign jurisdiction be recognised?
Generally, yes, provided procedures such as notification of the registered owner have been duly complied with.International conventions
Is your country a signatory to the International Convention on Maritime Liens and Mortgages 1993?
Carriage of goods by sea and bills of ladingInternational conventions
Are the Hague Rules, Hague-Visby Rules, Hamburg Rules or some variation in force and have they been ratified or implemented without ratification? Has your state ratified, accepted, approved or acceded to the UN Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea? When does carriage at sea begin and end for the purpose of application of such rules?
Russia is a party to the Hague-Visby rules. The Rotterdam Rules have neither been signed nor ratified. The carrier is liable for the cargo from the moment of its acceptance for carriage and until the moment of its issue to the consignee.Multimodal carriage
Are there conventions or domestic laws in force in respect of road, rail or air transport that apply to stages of the transport other than by sea under a combined transport or multimodal bill of lading?
Certain provisions of the Civil Code of Russia, of the Code of Internal waterways transport, of the Rail Transport Charter and of the Rules of carriage of cargoes in direct combined communications (the first version of which was approved by the transport agencies of the USSR in 1956) apply to certain aspects and cases of direct carriage by combined means of transport.Title to sue
Who has title to sue on a bill of lading?
A lawful holder of the bill of lading is entitled to sue on it.Charter parties
To what extent can the terms in a charter party be incorporated into the bill of lading? Is a jurisdiction or arbitration clause in a charter party, the terms of which are incorporated in the bill, binding on a third-party holder or endorsee of the bill?
Terms of a charter can be included in a bill of lading by making a reference to them. However, in practice, as in many other jurisdictions, the exact wording of the reference will be important to evaluate the validity and extent of such incorporation. In particular, the inclusion of an arbitration clause would need to be rather concrete and explicit.Demise and identity of carrier clauses
Is the ‘demise’ clause or identity of carrier clause recognised and binding?
No. A demise clause is unlikely to be recognised if the charterer issues the bill of lading. Agency relations between the charterer and the owner or demise charterer will not be implied by such a clause.Shipowner liability and defences
Are shipowners liable for cargo damage where they are not the contractual carrier and what defences can they raise against such liability? In particular, can they rely on the terms of the bill of lading even though they are not contractual carriers?
A contractual carrier would normally be liable for cargo damage in the first instance, even if the contract of carriage directly provided that carriage would be effected by the ‘factual carrier’. Any extensions of liability or waivers of rights agreed to by the contractual carrier will only apply to the factual carrier if it explicitly consented to them. However, this does not limit the rights of recourse of the contractual carrier against the factual carrier.Deviation from route
What is the effect of deviation from a vessel’s route on contractual defences?
A deviation may provide the grounds for exemption of the carrier from liability (eg, a deviation connected with saving lives or a deviation intended to avoid bad weather).Liens
What liens can be exercised?
With exception of a maritime lien, Russian law operates with a concept of ‘withholding’, where a creditor can be entitled to refrain from transfer to the debtor of an item in the case of the latter’s failure to pay for this item or compensate costs connected with it. Legislation applicable to various modes of transport generally entitles the carriers to withhold the cargo until payment of freight.Delivery without bill of lading
What liability do carriers incur for delivery of cargo without production of the bill of lading and can they limit such liability?
If cargo is carried under a bill of lading the carrier shall remain liable to the lawful holder of the bill of lading and general exemptions and limitations will apply to its liability. An agreement to limit liability can be made only in respect of the period between the discharge of the cargo and its delivery.Shipper responsibilities and liabilities
What are the responsibilities and liabilities of the shipper?
The principal obligations of the shipper are to provide the cargo for carriage duly packed and marked if necessary, to provide the carrier with the correct information on the cargo and its properties and to pay the amounts due to the carrier. The shipper is generally liable for breach of these obligations and for other damage caused to the carrier unless it will prove that the damage was not to its fault or the fault of parties for which the shipper is responsible.
Shipping emissionsEmission control areas
Is there an emission control area (ECA) in force in your domestic territorial waters?
The Baltic Sea, including Russia’s territorial waters, is one of the designated emission control areas for sulphur.Sulphur cap
What is the cap on the sulphur content of fuel oil used in your domestic territorial waters? How do the authorities enforce the regulatory requirements relating to low-sulphur fuel? What sanctions are available for non-compliance?
The limits set by Annex VI to the 1997 Protocol to MARPOL apply – 0.10 per cent within the Baltic SECA and 0.50 per cent in other areas. Agencies responsible for the protection of the environment can apply a number of sanctions for breaching these limits. In particular, both breaches of regulations in respect of atmosphere and permitting operation of a means of transport with emissions exceeding the set norms are administrative offences. However, the biggest practical issue is a reliable measurement of emissions, which is not always possible.
Ship recyclingRegulation and facilities
What domestic or international ship recycling regulations apply in your jurisdiction? Are there any ship recycling facilities in your jurisdiction?
The principal regulation applicable to the recycling of ships is the Regulation on safety of means of sea transport, which was introduced by the Decree of the Russian federal government in 2012. This Regulation also refers to the federal laws in respect of industrial safety and protection of the environment, provisions of which must be observed in the course of utilisation of ships. Some ship recycling facilities exist in the Russian Federation, but it is not a major industry.
Jurisdiction and dispute resolutionCompetent courts
Which courts exercise jurisdiction over maritime disputes?
There are no special maritime courts in Russia and maritime disputes are considered by regular courts. Commercial courts (historically called ‘arbitration courts’ in Russia) hear commercial claims and most types of disputes with state authorities and courts of general jurisdiction for cases such as employment matters.Service of proceedings
In brief, what rules govern service of court proceedings on a defendant located out of the jurisdiction?
Service of documents abroad in civil or commercial matters is governed principally by the national procedural codes: the Code of Civil Procedure and Arbitration Procedure Code. Russia is also a party to the 1965 Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters.Arbitration
Is there a domestic arbitral institution with a panel of maritime arbitrators specialising in maritime arbitration?
Yes – there is a specialist maritime arbitration institution existing in Moscow, called the Maritime Arbitration Commission at the Chamber of Commerce and Industry of the Russian Federation.Foreign judgments and arbitral awards
What rules govern recognition and enforcement of foreign judgments and arbitral awards?
From a procedural standpoint, enforcement of foreign judgments and arbitration awards is regulated by the Code of Civil Procedure and the Procedure Code. Enforcement of judgments is generally provided for in bilateral treaties on legal assistance (and some multilateral ones, such as the one between the states of the former Soviet Union). As far as arbitration awards are concerned, Russia is a party to the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards.Asymmetric agreements
Are asymmetric jurisdiction and arbitration agreements valid and enforceable in your jurisdiction?
Russian court practice is generally not favourable towards asymmetric jurisdiction and arbitration clauses.Breach of jurisdiction clause
What remedies are available if the claimants, in breach of a jurisdiction clause, issue proceedings elsewhere?
Remedies would depend on a particular situation: Russian courts can leave the claim without motion if the claimants will bring a claim in breach of an arbitration agreement. A foreign judgment on matters that fall into the exclusive jurisdiction of the Russian courts will be unenforceable.
What remedies are there for the defendant to stop domestic proceedings that breach a clause providing for a foreign court or arbitral tribunal to have jurisdiction?
If one party brings a claim in the Russian court in breach of an arbitration agreement, a counterparty is entitled to state (but no later than on the day of making its first statement on the merits of the case) that it objects to the consideration of the case by the court. The court should, in such a case, leave a claim without consideration.
The same can be done if the parties agreed to subject disputes to consideration by foreign courts and where such agreement is not in breach of exclusive jurisdiction of Russian courts. However, when disputes were agreed to be referred to a (foreign) court rather than to arbitration, a Russian court can, but has no obligation to leave a claim without consideration.
Limitation periods for liabilityTime limits
What time limits apply to claims? Is it possible to extend the time limit by agreement?
A general time limit is three years, but a reduced time limit will apply for certain types of claims, in particular, claims arising from the carriage of cargo and from freight forwarding the limit is one year and for some insurance claims it is two years. Under Russian law, time limits cannot be extended or reduced by an agreement between the parties.Court-ordered extension
May courts or arbitral tribunals extend the time limits?
In exceptional cases, courts can extend the time limits, but this mainly extends to claims brought by individuals.
MiscellaneousMaritime Labour Convention
How does the Maritime Labour Convention apply in your jurisdiction and to vessels flying the flag of your jurisdiction?
The Maritime Labour Convention was ratified by Russia and applies to vessels flying the Russian flag.Relief from contractual obligations
Is it possible to seek relief from the strict enforcement of the legal rights and liabilities of the parties to a shipping contract where economic conditions have made contractual obligations more onerous to perform?
Generally, ‘substantial change of circumstances’ is considered one of the grounds upon which a party can apply to the court to have the contract amended or terminated due to such change. However, for the court to order such an amendment or termination, the following conditions must all be fulfilled:
- at the time of entry into the contract the parties should have assumed that no such change will take place;
- change of circumstances was due to causes that the interested party did not manage to overcome after their occurrence, having applied the standard of care and diligence that should have been expected from it;
- performance of the contract in accordance with its original terms would lead to such losses for the interested party that it would have substantially lost the benefits to which it would normally be entitled at the time of entering into the contract; and
- terms of business or the nature of the contract do not imply that the risk of such change should be borne by the interested party.
Other noteworthy points
Are there any other noteworthy points relating to shipping in your jurisdiction not covered by any of the above?
Update and trendsKey developments of the past year
Are there any emerging trends or hot topics that may affect shipping law and regulation in your jurisdiction in the foreseeable future?
Russian maritime law and related areas of law are undergoing substantial changes due to developments in the Arctic sector, in particular with the construction of new liquefied natural gas terminals in the North of Russia, implementation of further regulations concerning navigation in the Northern Sea route area, development of floating nuclear power stations and other projects under way in this area.Coronavirus
What emergency legislation, relief programmes and other initiatives specific to your practice area has your state implemented to address the pandemic? Have any existing government programmes, laws or regulations been amended to address these concerns? What best practices are advisable for clients?
The shipping industry has not been enjoying the level of state assistance that some other Russian industries (primarily those working with consumers) have been given, but certain measures aimed at temporary relaxation of state control apply, as do measures concerning the simplification of the movement of transport employees during the pandemic.
Law stated dateCorrect on
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