Key takeaways
Expert determinations can be challenged for serious mistakes
Courts may step in when errors undermine contractual fairness.
Accuracy and transparency are critical in determinations
Robust processes help minimise the risk of manifest error.
Build safeguards into dispute resolution clauses
Include review mechanisms to protect against flawed outcomes.
WH Holding Ltd -v- E20 Stadium LLP [2025] EWHC 140 (Comm)
In this case, the Court found that a reasoned expert determination was not binding because it contained manifest errors, which it defined as errors that were obvious and obviously capable of affecting the determination as to admit of no difference of opinion.
As well as its bearing on agreements to expert determination, the decision is also relevant to contracts for the sale and purchase of crude oil and petroleum product, which commonly provide that certificates of quantity and quality are final except in cases of manifest error or fraud.
The background facts
The dispute arose out of a concession agreement that gave the claimant a 99-year concession to run sporting events at a London stadium.
The concession agreement provided that certain disputes were to be referred to an expert, whose decision was to be final and binding “in the absence of manifest error”. It stated that the expert would act as an expert and not an arbitrator.
A dispute subsequently arose. The parties agreed to put the dispute to an expert and entered into an agreement with the expert that they had jointly chosen to determine the dispute. The expert agreement, like the concession agreement, stated that the expert’s decision would be binding on the parties save in the case of manifest error. It also stated that the expert would not be liable to the parties for any act or omission whatsoever in connection with their expert determination.
The expert provided a reasoned written opinion in favour of the defendant. The claimant argued that the expert had made two errors which were manifest and, therefore, the determination was not binding. It sought a declaration from the Court that it was not bound by the expert determination.
Expert v. arbitrator
An arbitrator performs a quasi-judicial role and must, therefore, decide matters on the basis of submissions and evidence put before them. By contrast, an expert, subject to the express provisions of their remit, may carry out their own investigations, form their own opinion and come to their own conclusion regardless of any submissions or evidence adduced by the parties.
In this case, pursuant to the provisions for the expert’s remit, the expert was not obliged to make his determination within the bounds of the submissions made to him by the parties. He was retained to resolve the dispute by using his expertise to make a correct determination. Furthermore, the expert’s instruction was to decide any issues of opinion put before him and, in the Court’s view, this clearly covered his deciding issues of law.
The Court also highlighted that as the contractual provisions prevented the parties from holding the expert liable for any act or omission “whatsoever”, their only recourse was to establish manifest error that vitiated the expert determination.
The Court’s decision
The Court considered a number of authorities and highlighted the key relevant principles as follows.
Where the parties had agreed that an expert would determine their dispute, the starting point was that they would be held to their agreement so long as the expert had not departed from their instructions and absent bad faith or fraud.
It was not the case that any mistake made by an expert while loyally seeking to comply with their instructions would vitiate the entire report. It had to be a manifest error, i.e. plain or obvious. Furthermore, it was perfectly possible to be in error, particularly regarding the law, without being negligent.
Many expert determination provisions incorporated a “manifest error” exception. The difficulty was in deciding what constituted a manifest error. In general terms, a manifest error was one that was obvious or easily demonstrable without extensive investigation. What that meant may depend on the context in which it was used, the particular contract, and the degree of investigation which was permissible to demonstrate the error.
It was also relevant whether the parties had agreed, as here, that the expert should give reasons for the conclusions they had reached because that meant that they intended to examine the reasoning to determine if it disclosed any manifest error.
Furthermore, and while finality was important, where the parties had agreed on a reasoned determination the Court was permitted to review documents expressly referred to in the determination and forming an essential part of it. The Court could also consider the terms of the expert determination agreement, as well as any submissions expressly referred to.
Here, the Court was provided with a bundle of documents containing a range of materials, some of which must have been available to the expert. Consideration of these materials could not amount to an impermissible “extensive” investigation. It must have been investigation of the type that the parties had agreed to in the event that one of them challenged the outcome of a reasoned expert determination.
It was also relevant that there was no possible remedy for an aggrieved party other than by challenging a determination on the ground of manifest error or fraud: a fairly thorough examination of the expert’s determination was consistent with the fact that this would be the one and only chance of avoiding its consequences if they were indeed affected by error.
Nonetheless, the word “manifest” should not be diluted. Finality was an important factor and the finality of the determination should not be subject to attack because another view could, in the light of further argument, properly be taken of the matters dealt with during the determination.
Having summarised the applicable principles, the Court then considered the dispute between the parties and how the expert resolved it. It concluded that the determination contained two manifest errors. It granted a declaration that the claimant was not bound by the expert determination.
Conclusion
The decision is a reminder that those drafting or agreeing contractual dispute resolution provisions should consider carefully whether they should provide for an arbitrator or an expert to determine their disputes, or indeed both depending on the nature of the dispute.
They should also specify clearly what is the remit of any expert appointed to make a determination and whether they require a reasoned determination.
The guidance as to what constitutes “manifest error” may also be helpful to parties to contracts for the sale of crude oil and petroleum products when determining the extent to which a certificate of quantity or quality can be challenged.
