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.

'3. Discussion of the merits

3.1 The Applicable Rules in General

In order to decide on [Claimant]'s request "to call" a third person "to join the procedure", the Arbitral Tribunal first has to analyze which rules apply to such request in the present arbitration.

The question whether the arbitration clause can be extended to additional parties is subject to the interpretation of the arbitration agreement and its scope (cp. decision of the Swiss Federal Supreme Court No. 129 III 727 of 16 October 2003). The issue, however, whether a request for third person notice is to be admitted in arbitration proceedings is of a procedural nature and thus subject to the rules governing the proceedings (Andreas Bucher/Pierre-Yves Tschanz, International Arbitration in Switzerland, 1988, No. 160).

The present arbitration is governed by the rules set forth in Chapter 12 of the Swiss Federal Act on International Private Law ("PIL"). The PIL states in its Article 182 that the parties may set forth the arbitration procedure either directly or by reference to existing rules of arbitration. The broad rule of Article 182 applies, in principle, to all procedural matters including third person notice and intervention (Bucher/Tschanz, l.c., No. 160). In the case at hand, [Claimant] and [Respondent] made use of the possibility provided for by the PIL to determine the arbitration procedure by referring to the Rules of Arbitration of the International Chamber of Commerce ("ICC Rules").

Since the parties have not directly determined how to deal with the involvement of third persons based on a third person notice and since neither the PIL nor the ICC Rules contain any specific provision dealing with third person notice, the Arbitral Tribunal has the discretion to determine the applicable procedural rules itself (Article 182 PIL, Article 15 ICC Rules). The seat of the Arbitral Tribunal is in Zurich, Switzerland. Therefore, the Arbitral Tribunal decides to refer to the general procedural rules applicable to court procedure in Switzerland, and more specifically Zurich, and adapt them to the nature of the arbitral proceedings, if necessary.

There are in principle two procedural ways in which a third person may join a court procedure in general: either upon its own initiative, i.e. by an intervention (Intervention) or upon a third person notice (Streitverkündung) (see for the following, Christian Schuhmacher, Zivilprozessrecht des Kantons Zürich, Zurich 2003, p. 120/121). One distinguishes between a main intervention (Hauptintervention) or a collateral intervention (Nebenintervention). As a main intervener, the third person obtains a position of a formal party to the procedure with the right to file new claims. This is typically the case when the third person learns of a procedure and believes that it has a better right to the object in dispute. As a side intervener the third person is mainly interested in assisting one of the parties because it has an interest in the outcome of the dispute. The third person notice is the counterpart to a collateral intervention. The difference to the collateral intervention is only that it is not based on the own initiative of a third person but on the initiative of one of the parties to the pending procedure. It, therefore, has procedural effects only if it is accepted by the third person. This party calls upon a third person for assistance in the procedure. Therefore, and by definition, such third person notice does not make the third person a formal party to the proceedings.

Despite the lack of statutory regulations, scholars and courts agree that the participation of third persons to an arbitration procedure as collateral interveners or based on third person notice is possible in principle and that the applicable rules derive directly from the nature and the objective of arbitration proceedings (e.g. Thomas Rüede/Reimer Hadenfeldt, Schweizerisches Schiedsgerichtsrecht, 2nd ed., 1993, p. 256; Karl Heinz Böckstiegel, Die Internationale Schiedsgerichtsbarkeit in der Schweiz 1/II, 1989, p. 136 et al.).

Under consideration of the above-mentioned principles of Swiss procedural rules on third persons' participation, the following rules govern the issue of third person intervention and third party notice in arbitration proceedings: Since the third person who assists one of the parties as a collateral intervener or based on a third party notice does not become a party to the arbitration proceedings, it is not necessary that such third person is a party to the arbitration agreement. However, the conclusion of an arbitration agreement reflects the intention of the parties to be subject to private and confidential proceedings that exclude third persons. Therefore, third persons can only be admitted to the arbitration proceedings if all parties to the proceedings agree to this (Supreme Court of Stuttgart/Germany, decision of 16 July 2002, II. 4.; Rüede/Hadenfeldt, l.c., p. 256; Böckstiegel, l.c., p. 136; Gary B. Born, International Commercial Arbitration, 2nd ed., 2001, p. 673).

3.2 [Claimant]'s request for third person notice

3.2.1 Nature of [Claimant]'s request

[Claimant] asks the Arbitral Tribunal in its Post Hearing Written Submission, p. 15 "to authorize the Shipowner to join the present arbitration in order to claim its suffered damage due to loss of profit". However, it is then made clear in the prayers for relief that it is [Claimant] and not the shipowner that requests the participation of [B] by asking that the Arbitral Tribunal should call the latter to join the procedure. [Claimant] repeats this request in its comments of 22 December 2003. [B] has not made any submission to the Arbitral Tribunal itself. Therefore, [Claimant]'s new prayer for relief qualifies as a request for third person notice.

3.2.2 Approval of both parties

As elaborated in Section 3.1 of this Award, the agreement of all parties to the arbitral proceedings is necessary in order to give effect to a third party notice or a collateral intervention.

In its comments of 22 December 2003, [Claimant] states that the approval of the Parties to a joinder of [B] in this arbitration can be deduced from the Agreement concluded between [Claimant] and [Respondent] on 8 April 1999 ("Expert Agreement"; C-13). In the Expert Agreement, it was agreed that the crane problems would be submitted to an expert by [Respondent] "under supervision and approval of [Claimant] and the Shipowner", the latter being identified as [B]. In its Preliminary Award of 11 November 2003, the Arbitral Tribunal declared the expert report prepared by [the expert] based on the Expert Agreement as being not binding between the Parties. Therefore, in the opinion of [Claimant], the will of the parties set forth in the Expert Agreement asks for the same parties, including the shipowner, to be admitted to the proceedings related to the new, tribunal-appointed expert.

With comments of 17 July 2003, [Respondent] had contested that [B] is the ship-owner. In response to [Respondent]'s argument, [Claimant] stated in its comments of 22 December 2003 that [B] owns the total shares of [A], the latter being the owner of the vessel . . . Therefore, according to [Claimant], [B] can be considered at least as the indirect owner of the [ship] and was, consequently, a kind of beneficiary of the Expert Agreement of 8 April 1999.

The Arbitral Tribunal agrees with [Claimant] that the Expert Agreement referred to [B] as the shipowner and involved it in the supervision of the expert. This clearly derives from the introductory part of the agreement where [B] is introduced as "Shipowner". Nevertheless, this definition is limited to the Expert Agreement and cannot change the fact that [A], also according to the description of [Claimant], is the owner of the [ship], whereas [B]'s ownership is limited to [A]. The Arbitral Tribunal must consider this differentiation wherever it is of relevance.

But the fact that [B] was involved in the Expert Agreement is, in any event, not a sufficient basis for [B] to join this arbitration. The Arbitral Tribunal does not share the opinion of [Claimant] that the Expert Agreement has still an impact on the proceedings related to the new, tribunal-appointed expert and that, therefore, [B] should also be part of these new proceedings. By filing a claim for the damages resulting from defects of the cranes, [Claimant] had not chosen to claim for fulfilment of the Expert Agreement, but to raise a performance claim together with the preliminary request that the expertise of [the expert] be declared as not binding. By declaring the expertise as not binding, the Arbitral Tribunal put an end to the rights and liabilities deriving from the agreement between the Parties with regard to the appointment of an expert. Since the Arbitral Tribunal was requested by [Claimant] to decide on its claim for damages, it then found with Procedural Order No. 9 that an expert report was needed to decide on the merits of the case. Thus, the procedure related to the tribunal-appointed expert is independent from the procedure for the appointment of an expert provided for in the Expert Agreement. The same differentiation must be made regarding the participants in the execution of the Expert Agreement and the parties to the proceedings related to the tribunal-appointed expert.

In view of the aforesaid, the Arbitral Tribunal is of the opinion that a third person notice towards [B] lacks the necessary approval of [Respondent] since such approval neither derives from the involvement of [B] in the Expert Agreement nor does [Respondent] approve of [Claimant]'s request in the present arbitration. This gives rise to the question whether [Respondent]'s refusal to consent to the participation of [B] in the further arbitral proceedings is against the principle of acting in good faith and must, therefore, be presumed. However, the Arbitral Tribunal has no indication that this is the case. As argued above, the Expert Agreement and thus the fact that [B] was a beneficiary of the Expert Agreement is independent from the procedure relating to the tribunal-appointed expert. It follows that the former involvement of [B] in the Expert Agreement does not lead to any duty of [Respondent] to consent to the third person notice requested by [Claimant].

3.2.3 Legal or practical interest

In addition to the lack of approval, the Arbitral Tribunal does not see any relevant legal or practical interest of [Claimant] to have [B] join the proceedings. Based on the arbitration award of the [arbitration institution] (C-23), the defectiveness of the cranes on board of the [ship] is an established fact between the shipowner and its owner [B] and [Claimant], respectively. Consequently, the outcome of the new expertise investigating the cause of the defectiveness will have no influence on the relationship between [Claimant] and [B].

The interest of [Claimant] in the participation of [B] may be seen in the prayer for relief submitted by [Claimant] in its Post Hearing Written Submission that [Respondent] be condemned to "the entire loss of profit suffered by [B]". However, such claim was never subject to the Expert Agreement. If [Claimant] intended with its request to make [B] a party to this procedure in order for it to claim its own damages, this would require [B] to become a party to this arbitral procedure based on a main intervention. Such main intervention requires the initiative of [B] and amounts to an extension of the arbitral procedure to a third party. This is only possible if such third party is covered by the arbitration agreement (see Section 3.1 of this Award).

The Arbitral Tribunal recognizes that the assistance of the shipowner or its owner [B], respectively, may bring [Claimant] in a better position to provide the tribunal-appointed expert with the necessary documentation and information. However, the Arbitral Tribunal does not see why such assistance requires that [B] join the proceedings as collateral intervener. [B] and/or [A] can support and assist [Claimant] internally. The Arbitral Tribunal has no objection against such assistance. In addition, it is in the discretion of [Claimant] to call any persons from [A] or [B] as a witness.

The assistance rendered by [B]/[A] might even include the presence of an expert or technician of [B]/[A] at future hearings in this arbitration. The admittance to hearings of persons not involved in the proceedings is subject to Article 21 Para. 3 ICC Rules. It is stated therein that, save with the approval of the Arbitral Tribunal, persons not involved in the proceedings shall not be admitted to the hearings. E contrario, it is in the discretion of the Arbitral Tribunal to admit the presence of experts or technicians from [B] or [A] to future hearings as "involved person" if [Claimant] files such request. This will allow the Arbitral Tribunal to decide for each specific case, after having heard [Respondent], whether a participation of technicians or other staff of [B] or [A] is useful. If this is the case, the Arbitral Tribunal will then have to find a way to safeguard the legitimate interests of [Respondent] to protect, if necessary, its business secrets, for example by having the persons sent by [B]/[A] sign a non-disclosure agreement.

In the light of the aforesaid, the Arbitral Tribunal sees no legal grounds for granting the request of [Claimant] that [B] be called to join the present arbitration.'