Russian marine insurance market is “thin”

The Russian marine insurance market has few players and can involve manoeuvres that leave little possibility for judicial dispute resolution, according to Maksim Shimchenko, speaking at the First Seminar on Sea Law and Insurance, held in St Petersburg.

Shimchenko, founder and director-general of Max Marine, said the official list of 30 companies consisted of 20 “real” players and only six large and established companies. He referred to “instability”, with companies appearing suddenly and disappearing equally suddenly, often without paying claims.

Several participants in the seminar noted the problems with legal enforcement. Lex NavicusConcordia founder Konstantin Krasnokutsky said that setting out an agreement under the exclusive jurisdiction of an English court could be disastrous in attempting to obtain cash, not least because of difficulties in enforcing the judgement of an English court in Russia. He said that an alternative was maritime law arbitration or a Russian arbitration court. The former has the advantage of an expert judge and reduced need for translation, but can also be more time-consuming. A Russian court of arbitration tends to have the advantage that judges are often favourably inclined towards the insured and the trial process is often quick. On the downside is the frequent need for translation into Russian and the supplying of original documents.

Ektarina Bykovskaya, representative of law bureau Flagman, observed that defendants occasionally tried a tactic of delay. Courts in Russia had begun to battle this with rulings of procedural unconscionability.