Introduction

Expert determination is a specialist form of alternative dispute resolution. It is most often used where a technical dispute arises that requires a specific expertise to resolve. As such, it is relatively quick and cost-efficient. Expert determination provisions usually provide that the parties are bound by the determination save in circumstances of manifest error in the determination. To establish a manifest error, it is not enough for a party to show that their position is correct. That party must show that the expert’s position is obviously wrong. The precise meaning of manifest error depends on the particular contract and the context in which it is used; likewise, the degree of investigation which is permissible to demonstrate the error.

In the recent case of WH Holding Limited v E20 Stadium LLP [2025] EWHC 140 (Comm). Paul Mitchell KC reviewed and clarified the legal test for manifest error in expert determination in England and Wales.

WH Holding Limited v E20 Stadium LLP

In December 2023, WH Holding Limited (the claimant) initiated a debt relief claim in connection with an expert determination made in favour of E20 Stadium LLP (the defendant). The claim arose under a concession agreement signed by the parties in March 2013. This agreement included an ‘anti-embarrassment’ clause. The clause entitled the defendant to share in any gains that might in future be made by a specified shareholder if that shareholder entered into a transaction amounting to a sale or transfer of any interest in West Ham United Football Club Limited. It was agreed that any dispute arising pursuant to the agreement would be determined by an expert. That determination would, in the absence of manifest error, ‘be final and binding.’ A dispute arose in relation to whether the defendant was entitled to a profit share of £3,600,000 on an option agreement that it had entered into with the Claimant. Pursuant to clause 20 of the concession agreement, the parties engaged an expert to determine this dispute. The expert decided in favour of the defendant, and the claimant challenged this decision on the basis of ‘manifest error.’

Expert determination and manifest error

The starting point when considering manifest error is that where two parties to a contract have agreed that an expert shall be tasked with determining a question of importance to them and that they will be bound by the determination, the starting point is that they will be held to their agreement as long as the expert has not departed from his instructions and absent fraud or bad faith.

The grounds on which the claimant challenged the expert’s determination in WH Holding Limited v E20 Stadium LLP were twofold: (i) the expert had made a manifest error in relation to the Defendant’s calculation of the profit share; and (ii) that the expert made another manifest error as to whether the relevant agreements constituted a single transaction.

In reaching a determination, Paul Mitchell KC considered previous judgments to include Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd [2023] UKSC 2 where Lord Hamblen JSC examined the meaning of manifest error. Mitchell KC also referred to the dicta of Lewison J in IG Capital LLC v Van Der Merwe [2008] 1 All ER (Comm) 435, which explained that: a manifest error is one that is obvious or easily demonstrable without extensive investigation.

The judge then considered Veba Oil Supply & Trading GmbH v Petrotrade Inc [2001] EWCA Civ 1832 where manifest error was described as an error requiring: ‘oversights and blunders so obvious and obviously capable of affecting the determination as to admit no difference of opinion.’ Mitchell KC rejected that a manifest error is equivalent to a ‘howler’ or ‘blunder’ and instead drew on the above authorities to set out the following test:

to be ‘manifest’ errors must be so obvious and obviously capable of affecting the determination as to admit of no difference in opinion.

In determining whether the determination contained a manifest error, the court set out the following framework:

• The expert was not sitting as an arbitrator and there can be no appeal from his decision.
• The parties had agreed to be bound by the expert’s determination ‘in the absence of manifest error.’
• It is not the court’s role to decide that the expert erred in law.  Even if the court might reach a different conclusion to the expert on a legal question, that does not automatically lead to the conclusion that the expert’s determination contained a manifest error.
• There is no reason why, when an expert has been retained to make a determination on matters of contractual interpretation, the party challenging that determination should not have to satisfy “the manifest error test” as set out in in Veba.
• In short, the court’s role is to decide whether a party has proved the manifest errors it contends for. As Thomas J put it in Invensys at [48]:

It is not enough for the purchasers to show that their interpretation of the agreement is right; they have to show that the Expert’s interpretation of the agreement was obviously wrong.

In finding for the claimant, it was held that both errors of the expert were ‘obviously capable of affecting the determination’ because: (i) in misreading ‘or’ as ‘and’ within the definition of ‘Consideration’ in the concession agreement, the ‘Stadium Premium Amount’ was erroneously calculated; and (ii) that error had a direct impact on the expert’s determination. Finally, it was held that the relevant errors would not allow for a difference of opinion because they were not matters of judgement, but errors in mathematics and in the reading of what Mitchell KC described as ‘admirably clear’ provisions.

Conclusion

The decision in WH Holding Limited v E20 Stadium LLP is a rare example of a successful application to set aside an expert determination. The decision is significant because it provides clarity as to what constitutes a manifest error by moving away from terms such as a ‘howler’ and instead adopting a three-part test of:

• Was the error obvious;
• Was the error obviously capable of affecting the determination; and
• Do the errors admit no difference of opinion?

It may be that a domestic court in this jurisdiction will follow WH Holding Limited v E20 Stadium LLP in adopting such a structured assessment. Indeed, the Irish courts have previously taken influence from England and Wales in the context of expert determination. For example, in Dunnes Stores v Paul McCann, Stephen Tennant and Point Village Development Ltd [2020] 1 I.L.R.M. 431, at [29], Dunne J considered the extent to which an expert can decide questions of law. A decision of the Irish High Court would be very welcome to clarify the meaning of manifest error in this jurisdiction in the context of expert determinations.