Commercial agreements often contain expert determination clauses which provide that an expert’s decision in a dispute is final and binding in the absence of “manifest error”. In WH Holding Ltd v London Stadium LLP ([2026] EWCA Civ 153), the Court of Appeal offers valuable clarification on the limits of that doctrine.
Facts of the case
The respondent, WH Holding Limited, was the owner of West Ham United FC. The appellant, E20 Stadium LLP, was the head leaseholder of the London Stadium. Under the terms of a concession agreement, E20 had granted a 99-year concession to WH Holding to hold football matches at the stadium.
The agreement included an “overage” or “anti-embarrassment” clause. This required WH Holding to pay a premium to E20 if its “relevant shareholders” realised gains from a “qualifying transaction” involving the sale or transfer of all or part of their interests in the football club .
In 2021, relevant shareholders entered into transactions with third parties, including share sales and an option agreement. The parties agreed that the overage provision was triggered and that a premium was payable in relation to the share sale but they disagreed:
- on the amount payable relating to the share sale; and
- whether a premium was payable in relation to the option agreement.
Accordingly, the dispute was referred to an expert for determination, whose decision was, under the terms of the agreement, to be final and binding “in the absence of manifest error”. The expert determined the matter in favour of E20.
High Court and Court of Appeal Determinations
WH Holding applied for a declaration that the expert’s determination was not final and binding because it contained two manifest errors (relating to 1. and 2. above).
The High Court found that the expert had made the two alleged errors and declared the determination non-binding.
However, this decision was reversed by the Court of Appeal, which reaffirmed that the test for “manifest error” had to follow a two-stage approach:
- whether an error had been made; and if so,
- whether the error was “so obvious as to admit of no difference of opinion”.
This reiterates the high threshold that must be met before a court may intervene.
The Court’s rejection of the formula argument
WH Holding argued that, where parties had agreed a “contractual mathematical formula” to calculate their future payment obligations, they were entitled to expect the expert to apply that formula t correctly, failing which the expert’s answer would not be binding.
The Court of Appeal rejected that approach. The mere existence of a formula does not lower the threshold for establishing manifest error, nor does it turn the expert’s exercise into a purely mechanical one.
However, the Court of Appeal made it clear that the limited investigation under the second limb of the test did not mean that adversarial argument would be shut out; a challenge to expert determination on the grounds of manifest error would still involve the court reviewing competing statements of case and evidence at a hearing, where the parties were entitled to make submissions on whether the test was satisfied. This clarification is important because it confirms that whilst the investigation must be limited, parties may still present their case fully at a hearing.
Practical implications of the Court’s ruling
This decision carries important lessons for both drafting and disputing expert determination clauses:
- The Court of Appeal has reinforced the high threshold for establishing manifest error. Parties choosing expert determination need to be aware that there is generally no scope for appeal.
- When negotiating expert determination clauses, parties should consider whether a quick a final expert determination provision is appropriate, or whether they want to include grounds for challenge.
Nonetheless, expert determination remains attractive where finality is prioritised over the possibility of revisiting the outcome.