The claimant, a Croatian shipyard, entered into a contract with the respondent, a German company, for the construction of four deck cranes to be installed on a ship to be built by the claimant for a Liberian shipping company, A. The ship was delivered to A. On the basis of subsequent documents, it appears that A sold the ship to another shipping company, B. After the ship was put into use, the shipowner notified the shipyard of defects in the cranes. The claimant passed these claims on to the respondent. The two parties agreed to appoint an expert to check the cranes, their design and installation on the ship, and to propose any measures necessary to correct the defects. The claimant refused to accept the findings of the expert commissioned by the respondent and reserved its right to engage another expert. Arbitration was commenced and an initial award was rendered on the validity and effect of the expert's report. The claimant subsequently requested that the shipowner be joined to the proceedings, which led to an award on third party notice.

La demanderesse, un constructeur naval croate, a conclu un contrat avec la défenderesse, une société allemande, pour la construction de quatre grues de bord devant être installées sur un navire que la demanderesse devait construire pour une compagnie de navigation libérienne, A. Le navire a été livré à A. D'après des documents ultérieurs, A aurait vendu le navire à une autre compagnie de navigation, B. Après la mise en service du navire, l'armateur a fait savoir au constructeur naval que les grues étaient défectueuses. La demanderesse a transmis cette réclamation à la défenderesse. Les deux parties se sont mises d'accord pour nommer un expert afin de vérifier les grues, leur conception et leur installation sur le navire, et de proposer toute mesure nécessaire pour remédier aux défectuosités. La demanderesse a rejeté les conclusions de l'expert nommé par la défenderesse et s'est réservé le droit de nommer un autre expert. Un arbitrage a été engagé et une sentence initiale a été rendue sur la validité et l'effet du rapport de l'expert. La demanderesse a ensuite formulé une demande en intervention forcée afin que l'armateur soit joint à la procédure, ce qui a conduit à une sentence sur la question.

La demandante, un astillero croata, concluyó un contrato con la demandada, una compañía alemana, para la construcción de cuatro grúas de cubierta que se debían instalar en un buque que construiría la demandante para una compañía naviera liberiana, A. El buque se entregó a A. De acuerdo con los documentos posteriores, parece que A vendió el buque a otra compañía naviera, B. Después de que el buque se usara, el armador notificó al astillero de que había defectos en las grúas. La demandante trasladó estas reclamaciones a la demandada. Las dos partes acordaron nombrar a un experto que comprobara las grúas, su diseño y la instalación en el buque, y para que propusiera cualesquiera medidas necesarias para corregir los defectos. La demandante se negó a aceptar las conclusiones del experto encargado por la demandada y se reservó su derecho a encargárselo a otro experto. Se inició el arbitraje y se dictó un laudo preliminar sobre la validez y el efecto del informe del experto. Posteriormente la demandante solicitó que el armador se incorporara al proceso, lo que condujo a un laudo sobre la notificación a terceros.

'5.2.1 Nature of Expert Agreement and applicable procedural rules

Before deciding on the finality of the findings in the Survey Report, the Arbitral Tribunal has to decide on the rules governing the disputed issue of the finality. Based on firm legal practice and doctrine, the agreement between the parties that Swiss law should govern the contract is limited to substantive issues and does, therefore, not cover issues of a procedural nature (Heinrich Honsell/Nedim Peter Vogt/Anton K. Schnyder, Basler Kommentar zum Schweizerischen Privatrecht, Internationales Privatrecht, 1995 Article 187, No. 93). [Respondent] argues in its Post Hearing Written Submission (p. 4) that in the Expert Agreement the Parties had not agreed to an appointment of an expert to be acting for both parties jointly but to an expert to be "employed" by [Respondent], [Claimant] obviously wanting to avoid the preliminary cost sharing for an expertise. According to [Respondent], the result of such employment by [Respondent] could only be a private expertise. [Respondent] continues that as a matter of substantive law both Parties had accepted to be bound by the findings of the expertise unless it could be proven that the expertise was either incomplete or obviously incorrect. In the opinion of [Respondent], this could only be proven if a new expert appointed by the Tribunal would be able to relate the gear box damages to any other causes than those indicated by [the party-appointed expert].

The expertise rendered by a party-appointed expert has to be distinguished in its nature from an expertise made by a court-designated expert. Only the latter expertise has an official nature, whereas a party-appointed expert can only produce a "private expertise". So far, [Respondent]'s line of argumentation is correct. However, other than what seems to be implied by [Respondent], it is irrelevant for the private nature of an expertise whether it was rendered by an expert that had been engaged by only one party or by both parties jointly. In both cases, the expertise is of a private, non-official, nature. If the parties agree that the report made by the expert shall have a binding effect between them, such expert is called an expert arbitrator (Theo Guhl/Alfred Koller/Anton K. Schnyder/Jean Nicolas Druey, Das Schweizerische Obligationenrecht, 9th ed., 2000; Richard Frank/Hans Sträuli/Georg Messmer, Kommentar zur zürcherischen Zivilprozessordnung, 3rd ed., 1997, § 258, No. 2).

The Swiss Federal Supreme Court and the main legal commentators qualify the agreement between private parties to appoint an expert arbitrator as a contract falling under substantive law (Guhl/Koller/Schnyder/Druey, op. cit., 9th ed., 2000; BGE 26 II 765; BGE 67 II 148; BGE 107 Ia 320). Although an expert arbitrator agreement is a contract belonging to substantive law, this does not exclude the application of procedural rules. The agreement to grant a binding effect to an expertise may have serious consequences for the party to whose disadvantage the expertise turns out. Hence, there should at least be some minimal procedural guarantees ensuring that the expert determination is made based on fair proceedings. Such minimal procedural guarantees exist as general principles of Swiss procedural law (Honsell/Vogt/Schnyder, Internationales Privatrecht, op. cit., Introduction to Chapter 12 PIL, No. 278). They were, for example, explicitly set forth by the legislator of the Canton of Zurich in § 258 of the Civil Procedure Code ("CPC ZH"). Apparently, the legislator did not want to let parties agreeing [sic] on a binding expertise without the protection of basic procedural rules. Thus, those rules have to apply to all expertises made by party-appointed expert arbitrators, despite the fact that the agreement to appoint an expert arbitrator falls under substantive law. The crucial factor for the application of minimal procedural standards is the binding effect of the expertise. If the parties agreed to such binding effect it is, in this context, irrelevant whether the expert arbitrator was employed by both parties jointly or only by one party.

In the case at hand, the Parties have agreed that the expert findings shall be "finally obligated for both parties" (C-13). It cannot, therefore, be doubted (and it is not disputed) that the Parties to the Expert Agreement wished the findings of the expert to be binding upon them. Therefore, it must be determined which procedural rules are applicable to the findings of [the party-appointed expert] and whether they were fulfilled.

As a general rule, the applicable procedural law has to be determined based on the ICC Rules, whose application was agreed on by the Parties in Article 15 of the Purchase Contract (C-2). Article 15 of the ICC Rules governs how to determine the procedural rules applicable to the arbitration procedure. However, said provisions cannot give an answer to the question which procedural rules shall apply with respect to the issue of the finality of the findings of the Survey Report since it does not concern the present arbitration procedure, but events that occurred beforehand and outside the proceedings before this Arbitral Tribunal.

Therefore, the applicable rules of law can only be determined in the light of Article 17 of the ICC Rules, which sets forth how to determine the rules of law to be applied to the merits of the dispute. It provides that the arbitral tribunal shall decide the dispute according to the law chosen by the parties or, in the absence of such choice, according to the rules of law it deems to be appropriate. Even if the parties made a choice of law, the choice may not be exhaustive. A regulation must then be found by the Arbitral Tribunal based on appropriate rules of law (Yves Derains/Eric A. Schwartz, A Guide to the New ICC Rules of Arbitration, 1998, p. 221). It was set out above that the Parties' choice of law only covers the substantive law of the chosen legal system. The determination of the applicable law to issues of a procedural nature such as the finality of the findings of an expert arbitrator lies thus with the Arbitral Tribunal which, pursuant to Article 17 of the ICC Rules, chooses the law it considers appropriate, unless the issues concern the arbitration procedure and thus fall within the scope of Article 15 of the ICC Rules.

The appropriate rules in the present case could either derive from German or Swiss procedural law. The Expert Arbitrator . . . whose expertise is subject to examination with respect to procedural defects, lives in Germany and has therefore the closest connection to German law. The Arbitral Tribunal has its seat in Zurich/Switzerland. As the procedural rules applicable to the courts of the canton of Zurich reflect generally recognized principles, the Arbitral Tribunal considers them to be appropriate to govern the procedural aspects of the dispute over the finality of the findings in the Survey Report.

§ 258 CPC ZH provides that it is possible to agree upon an expert determination for the finding of facts relevant to a legal relationship which can be freely disposed of by the parties. The expert determination is binding unless the expert arbitrator could have been excluded or challenged, or one party has been granted a more favourable position in the process of the determination, or the expert determination was not duly established, or the findings of the expert arbitrator were obviously incorrect.

The main commentators on the CPC ZH point out that the incorrectness of the expert determination from a factual point of view is not sufficient reason for its being non-binding, but that there must exist severe deficiencies in procedure or content. A favoured position of one party in the appointment procedure of the expert arbitrator is considered to be such severe procedural defect. Bias or partiality are given if from the point of view of the party concerned there are sufficient objective reasons that would make a reasonable person develop doubts regarding the expert arbitrator's impartiality (ZR 1994, p. 100). Furthermore, an expertise is not duly established in the sense of § 258 CPC ZH if the expert arbitrator has acted beyond his or her mandate or if the parties were not given the opportunity to present their view of the case and to comment on the statements of the other party (Frank/Sträuli/Messmer, op. cit., § 258, No. 6).

German law provides for similar principles. Although the German Civil Code does not contain a specific provision regarding the expert determination, legal practice and commentators rely on § 319 of the German Civil Code for deciding on the question of its binding effect. Said provision addresses cases in which the determination of the performance is left to the discretion of a third party. It states that the determination made by this party is not binding if it is obviously unjust. Based on firm legal practice, it derives from this rule that an expertise is not binding if it is obviously incorrect or if its argumentation has severe defects. According to one of the main commentators on the German Civil Code, a consistent application of said legal practice leads to the denial of the binding effect of an expertise if the latter is based on grave procedural defects (Helmut Heinrichs, Bürgerliches Gesetzbuch, 61st ed., 2002, § 319, No. 5). Hence, even if German law were applicable in the case at hand, the procedural rules would be very similar.

5.2.2 Procedural defects of the Survey Report

In the following sub-sections, it will be analyzed whether the Survey Report of [the party-appointed expert] meets the requirements set by the procedural rules determined above.

5.2.2.1 Validity of appointment

[Claimant] maintains that [the party-appointed expert] was solely engaged by [Respondent] and that [Claimant] was excluded from the procedure of the appointment of [the expert] (Post Hearing Written Submissions p. 7). In the light of the above-cited legal practice, a favoured position of one party with respect to the appointment of an arbitrator would in principle be inconsistent with the principles set forth in § 258 CPC ZH.

Between the Parties it was agreed that [Respondent] should submit the Crane problem "to an independent and qualified body/institution by [Respondent] under supervision and approval of [Claimant] and the Shipowner" (C-13). The exchange of letters between the Parties subsequent to this agreement shows that [Claimant] voluntarily limited its role in the appointment procedure to a passive one. With letter of 7 June 1999, [Respondent] had named three potential experts to [Claimant] based on suggestions made by [Engineering Federation] together with the invitation that [Claimant] should name two experts on its part (R-11). [Claimant] did not follow this invitation, but accepted by return letter the experts suggested by [Respondent], yet emphasized that they should be reminded not to act as private persons (R-12). When informed about [the expert] being entrusted with examining the Crane matter, [Claimant] invited [Respondent] to deliver proof that he was a member of an independent institution (R-14). There can be no doubt that [Claimant]'s insisting on the expert being connected to an independent institution prompted [Respondent] to have the Chamber of Commerce of . . . appoint . . . as an expert (R-16).

. . . . . . . . .

By having agreed to continue the proceedings eventually leading to the Survey Report, [Claimant] implicitly accepted . . . as expert arbitrator. [Claimant] is, therefore, estopped from contesting [the expert]'s appointment since such objection constitutes a case of contradictory behaviour ("venire contra factum proprium") and can thus, as being against good faith, not be protected.

5.2.2.2 Impartiality and independence

[Claimant] argues in its Post Hearing Written Submissions that [the expert] acted only for [Respondent] and felt as being their expert only (p. 8 et seq.). Some statements made by [the expert] during the Witness Hearing give indeed reason to doubts that he was aware of his role and function as an independent and impartial expert entrusted with making the expertise both for [Claimant] and [Respondent] (Minutes p. 130 et seq.). Questioned by the Chairperson in the Witness Hearing whether he was familiar with procedural rules of an expert arbitrator and whether he had been in the situation once before that two parties were involved, but that he was only appointed or instructed by one party, [the expert] explained that he had had discussions with [Respondent] about the procedure and what could be done to find out what was the problem. He had told [Respondent] that they had "to clear" before he went on board of the [ship]. He could solve the problems and see what may be the reason for all these problems and then [Claimant] had to accept his report, otherwise it would be "for nothing". [The expert] then stated that it was "typical for a non-court report" only to speak to one party at the beginning. "We have only one party, otherwise you make your report and the other side says that is only for [Respondent]. I am very close to [Respondent], that was my opinion. I warned the other party we have to talk together and that was the reason please talk before to [Claimant]" (p. 130 et seq.) From the context it becomes clear that by "other party" [the expert] meant [Respondent].

Those statements give the impression that [the expert] was misled about his real task by the fact that he had been approached and briefed by [Respondent]. Consequently, he felt more close to [Respondent]. Whether this in fact influenced the results of his expertise cannot be established. However, as stated above under Section 5.2.2, partiality of the expert arbitrator is given if from the perspective of one party there is legitimate reason for doubts on his impartiality or independence.

The circumstances referred to above indicate that [the expert] was not impartial. However, the Arbitral Tribunal does not have to finally decide whether his acting and his attitude as expressed in the Witness Hearing gives rise to justifiable doubts as to his impartiality or independence, since as outlined in Sections 5.2.2.3 and 5.2.2.4 below there are other procedural defects connected to the work of [the party-appointed expert].

5.2.2.3 Equal treatment and right to be heard

As fundamental constitutional principles, the right to be heard and the equal treatment of the parties form part of the minimal procedural standard guaranteed by § 258 CPC ZH und thus have to be observed during the procedure leading to the expert determination (see also Jean-François Poudret, Expertise et droit d'être entendue dans l'arbitrage international in Etudes de Droit International en l'Honneur de Pierre Lalive, 1993, p. 607 et seq.).

[Claimant] is of the opinion that they were not equally treated by [the expert]. In its Post Hearing Written Submissions, [Claimant] argues that they were totally kept aside and could therefore not exercise their supervision and their right to be heard (p. 10).

It is undisputed that [the expert] was at no time escorted by a person from [Claimant] when paying his two visits to the [ship], but that the second time he was accompanied by a service engineer ordered by [Respondent] (Minutes p. 153). However, one has to bear in mind that [Claimant] was fully informed about the visits of [the expert] and even assisted him in organizing his embarking. . . .

Since [Claimant] was informed about [the expert]'s inspections on the [ship], yet did not feel the need to send one of its own people, it has waived its right to claim that, based on this fact, it was not equally treated. In view of the general duty of "acting in good faith", there is a firm principle in international arbitration that procedural defects must be objected to immediately. Said principle is also subject to constant practice of the Swiss Federal Supreme Court, which holds that a party who did not communicate the procedural defect to the Arbitral Tribunal and the other party immediately after having learned about such defect is precluded from challenging the rendered award based on the procedural defect (BGE 113 la 67; Decision of the Federal Supreme Court Chrome Resources of 8 February 1978, published in La Semaine judiciaire, Genève 1980, p. 75; BGE 111 la 75). This opinion is shared by the main commentators on Swiss and international arbitration (see for example Pierre Lalive/Jean-François Poudret/Claude Reymond, Le Droit de l'Arbitrage Interne et International en Suisse, 1989, p. 144; Frank/Sträuli/Messmer, op. cit., prior to § 238-258, No. 69). The ratio behind the principle that procedural defects have to be communicated immediately is to ensure fair and efficient proceedings.

In the light of the fact that the fundamental procedural rules of equal treatment and the right of the parties to be heard both apply to arbitration and expert arbitrators, certain procedural rules in relation to arbitration proceedings are also applied to the expert arbitration procedure per analogiam (Heinrich Honsell/Nedim Peter Vogt/Anton K. Schnyder, Internationales Privatrecht, op.cit., Article 176, No. 13; BGE 31 II 688; Walter J. Habscheid, L'expertise-arbitrage, Etude de droit comparé, in: Festschrift Domke, 1967, p. 115). It is thus appropriate that the principle of immediate objection in arbitration also applies with respect to the expert arbitrator. Since [Claimant] never objected to [the expert]'s visit on the [ship] without the escort of a person from [Claimant], it is therefore estopped from claiming that it was not treated equally.

However, the principle that procedural defects have to be opposed to immediately cannot apply to the fact that [the expert] had ex parte communications with [Respondent] and at no time contacted the offices of [Claimant] in Croatia to obtain documents from their part. As regards the ex parte communications, it is not denied by [Respondent] that two meetings between [Respondent] and [the expert] took place before his appointment as expert arbitrator and shortly after his appointment. According to the witness statements of both [Respondent's sales manager] and [the expert], they had the purpose to provide [the expert] with the technical documents he needed to fulfil his task (Minutes p. 44 et seq., R-25 p. 2 et seq.). The Survey Report refers to a third meeting having taken place on 3 August 1999 "with various departmental heads" in order to discuss "the further plan of action for investigation of damage" (R-22 p. 5). It is undisputed that [the expert] visited [Respondent] for the fourth time after he had returned from his visit to the [ship] in Nantong. According to [the expert], this happened with the purpose to obtain additional information about new damage to the Cranes and to discuss the further proceedings (R-22 p. 8). It is not established that [Claimant] knew of those visits. Consequently, they could not oppose to them. In order to observe the equal treatment of the Parties, [the expert] should at least have offered to have a meeting with [Claimant] too, yet such offer was never made. In the Witness Hearing, [the expert] testified that he had also wanted to visit [Claimant] but that [Respondent' sales manager] had told him "at the moment no" (Minutes p. 173). Therefore, the equal treatment of the Parties was violated by [the expert]'s ex parte communications with [Respondent].

A second point violating the principle of equal treatment and the right to be heard lies in the fact that [the expert] did not ask [Claimant] to supply him with documents, whereas he had received and accepted documents from [Respondent]. [A witness called by Claimant] stated in the Witness Hearing that [Claimant] had a lot of correspondence they had thought should have been interesting for [the expert] in order to make a proper investigation, yet [the expert] had never asked for those documents (Minutes p. 103 et seq.). Although one could argue that [Claimant] could have approached [the expert] itself in order to supply him with documents and information, this would be contrary to the procedural rule that the expert arbitrator is determining the timetable of the proceedings leading to the expert determination. It is thus his duty to indicate to the parties the right point of time when they have to supply him with documents and information. [Claimant]'s assumption that [the expert] would contact them before rendering his Survey Report is therefore justified, whereas the acting of the expert arbitrator has to be considered a violation of the principle of the equal treatment of the parties.

5.2.2.4 Change of scope of expertise

In the opinion of [Claimant], [the expert] unilaterally changed the scope of the expertise as agreed upon in the Expert Agreement (Post Hearing Written Submissions p. 13).

According to [Respondent's sales manager]'s statement in the Witness Hearing, [Respondent] had handed over [to the expert] a copy of the Expert Agreement as a description of the task he had to fulfil, not pointing out the specific tasks since the content of the expertise was clearly described in the Agreement (Minutes p. 45). On 12 July 1999, [the expert] sent [Respondent] an offer in German describing goal and content of the expertise to be compiled (R-24a p. 2). The description made therein corresponds to the scope of the assignment as set forth in the Survey Report (R-22 p. 2). If said scope is compared to the one agreed upon between the Parties in the Expert Agreement, one notes that the item a) of the Expert Agreement, addressing the "checking of the crane design project and the relevant documentation of [Respondent]", is not included in the scope of assignment described in the Survey Report.

Questioned by the Chairperson in the Witness Hearing which of the items in the Survey Report covered the item a) in the Agreement, [the expert] stated that if one compared the Expert Agreement with his report or offer, not all points would be covered. . . .

It derives from these statements that [the expert] did not check the Crane design project although this had been agreed between the Parties in Section 1 of the Expert Agreement. [The expert] was not capable to indicate [sic] where in the Survey Report said item was addressed and he also admitted that he would not have been able to fulfil this task since he was not qualified for it. It is thus established that [the expert] unilaterally changed the scope of his assignment and that [Respondent] did not prevent him from doing so. The change of the scope was not known to [Claimant] and they could therefore not contest this before receipt of the Survey Report. Thus, [Claimant] did not violate the principle that procedural defects must be objected to immediately.

The question arises whether said change of scope should lead to the invalidity of the whole expertise or whether parts of the Survey Report could still be maintained. The latter, however, cannot lead to a reasonable result. If [the expert] had examined the design of the cranes and had been qualified to do so, his findings could have been totally different. Whereas now he sees the main reasons for the problems with the Cranes in operating errors, such errors, if any, could be of no or lesser relevance if the Cranes were already incorrectly designed. The Arbitral Tribunal is therefore of the opinion that it is impossible to decide which parts of the Survey Report can be maintained after knowing that the Crane design was not subject to examination.

In sum, in addition to the violation of the principle of equal treatment of the parties and the right to be heard, the fact that the scope of the expertise was limited constitutes also a fundamental procedural defect of the Survey Report.

5.2.3 Substantive defects

For the sake of completeness, it shall further be analyzed whether apart from the procedural defects there are any substantive defects leading to the findings in the Survey Report being non-binding between the Parties. According to firm legal practice, only an incorrectness in the content of the expert determination that is obvious to every other expert in a thorough examination is sufficient to lead to a non-binding effect of the expertise (BGE 67 II 146; ZR 1993 p. 94).

In the opinion of the Arbitral Tribunal, there are sufficient indications to conclude from the documents submitted and from the witness interrogation that the Survey Report is "obviously wrong" in the sense of § 258 CPC ZH. Therefore, it is not necessary to have another expert report made in order to determine whether [the expert]'s findings were obviously incorrect, as requested by [Respondent] in its Post Hearing Written Submission (p. 4).

The reasons which led the Arbitral Tribunal to this conclusion are the following:

a) The main conclusion of the Survey Report consists in [the expert] having obtained the impression that the Crane problems were primarily caused by operating errors of the external Chinese companies in Taiwan. Due to these errors, the steel ingots were hooked under the hatch sides, which led to overloading of the winch gear (R-22 p. 15). [The expert] specified during the Witness Hearing that this could only happen during unloading (Minutes p. 197). However, both the Survey Report and the statements of [the expert] in the Witness Hearing made it clear that [the expert] never had the opportunity to observe the unloading of the [ship], since during his first visit in Nantong, China, the ship was loading and during his second visit in Japan the Cranes were neither involved in loading nor in unloading (R-22 p. 7 and p. 13, Minutes p. 163 et seq.). Hence, his reference to operating errors made during unloading is not based on personal observation of the procedure.

However, he did observe surface damages under the hatch sides belonging to holds no. 3, 4 and 5. It is not established though that those damages were caused by hooked steel ingots. It is at least possible that they occurred due to cargo moving to and fro when lifted in the air. [The expert] himself mentions in the Survey Report that the [ship]'s sides were rammed by the steel ingots due to false manoeuvring of the Cranes (R-22 p. 6). The fact remains that [the expert]'s findings are heavily based on his own observations made of the Chinese workers in Nantong during loading. . . . If the Crane problem was indeed a problem specifically connected to the Chinese workers, no problems should have occurred in other harbours around the world. Yet the [ship] had anchored in other places in the Far East, in Central America, in Norway and in Africa before reaching the Chinese Sea again (C-16 p. 3). A list of all Crane defects transmitted to [Claimant] by the ship-owner (C-25) as well as the guarantee claim forms issued by the ship-owner (C-27) show that defects already occurred at the end of 1996 and thenceforth appeared on a regular basis. Hence, Chinese mentality resulting in operating errors cannot be sufficient explanation for the Crane problems.

b) Part of the assignment of [the expert] was to give recommendations how to solve the Crane problems. His first suggestion regarding technical improvement in the Survey Report was to check if an additional overload safeguard could be retrofitted, the safeguarding only being activated when the cargo is hooked on the bottom side of the loading hatchway (R-22 p. 16). During the Witness Hearing of [the expert], however, he had to admit that such solution is not possible with respect to hydraulic cranes as the ones built by [Respondent] for the [ship]. . . . The fact that the recommendation given in the Survey Report is technically not possible and that [the expert] confused mechanical cranes and hydraulic cranes raises doubts about the qualification of [the expert] to perform his task as an expert arbitrator for this specific type of Cranes.

The second technical improvement recommended by [the expert] in his Survey Report was to make the crane drivers cabin considerably longer to the front, thus improving the sight of the crane driver and reducing the dependence on guides in the hatch area. In the Witness Hearing, both Mr . . ., chief engineer of the ship-owner [B], and Mr . . . [witness called by Claimant] persuasively argued that the suggested solution cannot be found on any other vessel. According to both witnesses, there exists no vessel where the cargo crane operator can see all the cargo area (Minutes p. 196 and 233). . . . Against this background, also this solution suggested by [the expert] has to be considered as not bringing the desired results. This raises further doubts about his technical knowledge regarding hydraulic cranes and casts considerable shadows of doubts on the correctness of the findings in the Survey Report.

In addition, when trying to assess the correctness of the findings in the Survey Report, one cannot leave aside the reports compiled by three other institutions at the request of [Claimant] and the ship-owner. Although the institutions made their examinations based on the instructions of one Party only and must therefore in principle be considered as simple party allegations, their findings still have a certain value since as competitors in the machinery supply market they cannot afford to give their clients completely wrong analyses of their technical problems. It is remarkable that both the reports from [two of the institutions] localized the main problem in discoordinated movement of the winches leading to overload (C-18, C-16 p. 9), whereas [two of the institutions] addressed the problem of wrong-dimensioning of the gear (C-19 p. 2). In addition, the [report of one of the institutions] explicitly states that they are of the opinion that the damages to the gearboxes were not "consistent with operator error or deficient maintenance by the ship's crew" (C-16 p. 9). The similar findings of the three reports aggravate the doubts regarding the correctness of the findings in the Survey Report.

5.2.4 Conclusion

As a result of the above, the Arbitral Tribunal has to hold that the findings in the Survey Report are non-binding upon the Parties.'