Court of Appeal finds no manifest error in expert determination

WH Holdings Ltd -v- London Stadium LLP [2026] EWCA Civ 153

In our article on the English High Court’s decision in this case, we set out why the Court held that an expert determination was not binding due to manifest errors: see Court: Expert Determination Not Binding | Hill Dickinson.

However, the Court of Appeal has taken a different view and held that the expert’s determination was in fact valid and binding on the parties. The Court of Appeal’s guidance on what constitutes manifest error for these purposes is useful for those drafting and entering into agreements for expert determination generally.

This includes those entering into contracts for the sale and purchase of crude oil and petroleum products which commonly provide that certificates of quantity and quality are final except in cases of manifest error or fraud.

The background facts

The parties agreed that the claimant should have a 99-year concession to run sporting events at the London Stadium (the former Olympic stadium where West Ham United now play their football). 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'. The agreement expressly provided that the expert would act as an expert and not an arbitrator.

The concession agreement contained an 'anti-embarrassment' or 'overage' provision, intended to ensure that the defendant would get a share of the gains if any of the claimant’s shareholders disposed of their shares in the football club (Stadium Premium Amount). The agreement defined a 'Qualifying Transaction' for these purposes and also set out the way in which the premium was to be calculated.

In November 2021, there was a transaction involving the sale of 187 shares by claimant shareholders, together with a Call Option being granted to the purchaser for the purchase of further shares. The parties disagreed on whether the sale of the shares was a single Qualifying Transaction, for which the defendant had already received just over £2.5 million, or whether the Qualifying Transaction included the Call Option in which case the defendant argued that it was entitled to an additional £3.6 million. The claimant contended that nothing more was due.

The parties agreed to refer the dispute to an expert. They jointly chose the expert and entered into an agreement with him that stated that his decision would be binding on the parties save in the case of manifest error. The expert agreement also provided that the expert would not be liable to the parties for any act or omission whatsoever in connection with his expert determination.

The expert provided a reasoned written opinion that the Qualifying Transaction included the Call Option, thereby entitling the defendant to another £3.6 million.

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.

At first instance, the Commercial Court concluded that the determination contained two manifest errors. It granted a declaration that the claimant was not bound by the expert determination.

On appeal, the defendant argued that the expert’s conclusions had to be so obviously wrong as to admit of no difference of opinion.

The legal principles

Parties often contract on the basis that they will be bound by the findings or calculations of a jointly appointed expert, made in the course of carrying out his or her instructions, except where there has been 'manifest error'.

For these purposes, the definition of 'manifest error' is narrow. It must be obvious on the face of the document without the need for an extensive investigation. Case law on 'manifest error' for certification of quality or quantity of goods refers to an error which is apparent from the face of the document without needing to look elsewhere (for instance, a typographical error such as a mistake in a decimal place).

An arguable error does not amount to a manifest one.

The Court of Appeal applied a two-stage test: (i) whether there was 'an oversight or blunder' and (ii) whether that error was so obvious as to admit of no difference of opinion. A party challenging an award on the basis of manifest error will first have to identify the error, and there may well be a dispute as to whether the expert made an error at all.

The issue of whether there has been a manifest error is entirely distinct from the question of whether the expert has complied with his or her instructions. A departure from instructions does not have to be manifest and a failure in that regard renders the determination invalid provided that the departure from instructions is material.

The Court of Appeal’s decision

The Court of Appeal noted that the calculation of the Stadium Premium Amount was a question of construing and applying the relevant wording in the concession agreement. It was consequently a mathematical exercise.

However, contrary to the judge’s view, the Court of Appeal did not consider that the overage provisions in the agreement were clear, nor that their application was straightforward in the situation under consideration.

The approach taken by the expert was based on an arguable finding that there was one Qualifying Transaction. Whilst the claimant and the judge had a different starting point, the expert’s finding was not so obviously wrong as to admit of no difference of opinion. The rest of his analysis followed from that conclusion in a manner which also could not be said to be obviously wrong, producing a determination which was not manifestly in error.

Thus, the appeal was allowed, and the expert determination was held to be valid and binding.

Comment

Where the parties have agreed that an expert will make a determination, whether this involves a question of contractual interpretation or applying mathematical formulae, the Court will only overturn those findings for manifest error where the mistake is so obvious as to be unarguable, in other words in exceptional circumstances.

The policy adopted for such expert determination contractual provisions by the English Courts is that they will be very reluctant to step into the expert’s shoes to reframe his or her findings.

Some contractual expert determinations are final and binding for invoicing purposes only (such as the BP General Terms and Conditions for Sales and Purchases of Crude Oil and Petroleum Products 2015), which has the effect of requiring a party to pay now and sue later.

But where an unfettered manifest error wording is to be written into an expert determination clause, the parties have to recognise that they are very likely to have no right of appeal from the expert’s findings.