Victory for West Ham – High Court orders Stadium to repay £3.6m after setting aside an expert determination for manifest error

WH Holding Ltd v E20 Stadium LLP [2025] EWHC 140 (Comm)

In a recent decision, the High Court has ordered E20, the owner of West Ham United’s London Stadium, to reimburse West Ham United’s parent company by setting aside an expert determination which required the Premier League Club to pay E20 £3.6m. In doing so the court clarified what is meant by the term ‘manifest error’ and when it would be applicable to a decision made by an expert. The decision also illustrates the care which must be taken in drafting the Expert Agreement especially with regard to the circumstances, if any, in which the expert’s decision can be challenged. 

Expert determination

Expert determination is a form of alternative dispute resolution (ADR) that is often used to settle disputes of a technical nature. Contractual parties may include an expert determination provision in their agreement requiring them to jointly instruct an independent expert to resolve certain types of dispute. Often these are disputes where either a form of valuation or specialist’s opinion is required, rather than an analysis of the law. Expert determination is often used in disputes concerning complex technology, energy and construction projects. Parties appreciate the ability to select an expert with specific industry knowledge and like that the process is often much shorter than arbitration or litigation. An expert’s determination is subject to much more limited control by the courts which is why successful challenges, such as in this case, are rare.

Background

In 2013, WH Holdings Limited (“WHH”) and E20 Stadium LLP (“E20”) entered into a Concession Agreement by which E20 granted WHH a 99-year concession that permitted WHH to run events at the Queen Elizabeth Park Stadium and for West Ham United Football Club (“WHUFC”) to use as its home ground. The Concession Agreement contained a provision which entitled E20 to share in any gains made as a result of certain shareholders selling or transferring their interest in WHUFC. In 2021 a dispute arose between E20 and WHH as to whether entry into a put and call option agreement by certain shareholders triggered this provision. 

The Concession Agreement provided for certain disputes, including those relating to this provision, to be determined by an expert whose decision “shall (in the absence of manifest error) be final and binding”.  

In compliance with their agreement, the parties appointed an Expert to resolve the dispute and entered into an Expert Agreement. The Expert Agreement contained the same carve out, stipulating that the Expert’s decision would be binding and that the parties were not permitted to challenge the decision, save where such challenge arose as a result of manifest error. 
The Expert found in favour of E20 and determined that WHH must pay E20 £3.6m plus costs. WHH claimed that the Expert had made a manifest error and subsequently sought a declaration from the High Court that it was not bound by the determination. 

Decision

The Court examined the authorities concerning what constitutes manifest error and summarised the key applicable principles.  

The starting point is that parties who have agreed to be bound by expert determination will be held to their agreement, as long as the expert has not departed from their instructions and absent any fraud or bad faith. Historically, an honest mistake made by an expert was capable of vitiating a determination, but the law has developed since then as a result of the ability to sue an expert for damages in the event they acted negligently. 

If parties wish to contract on the basis that they will not be held to mistakes made by an expert in the course of carrying out their instructions, parties must include a term with regard to manifest error.  For an error to be manifest it need not be negligent. It is perfectly possible for an expert to be in error without being negligent. The difficulty instead arises in determining whether or not an error is ‘manifest’. 

An often cited explanation of manifest error is an error “that was obvious or easily demonstrable without extensive investigation”. Guidance as to what is meant by an error being 'obvious or easily demonstrable' has been provided by the Court of Appeal in Veba Oil Supply & Trading GmbH v Petrotrade Inc [2002] 1 All ER 703 which described manifest errors as “oversights and blunders so obvious and obviously capable or affecting the determination as to admit no difference of opinion”. 

The Court in this case highlighted that the precise meaning of ‘manifest error’ depends on the particular contract in question and the context in which it is used; likewise, the degree of investigation which is permissible to demonstrate the error. In this instance, it was relevant that the parties agreed that the Expert should give reasons for his conclusion. Whilst it is clear that the parties sought finality, this demonstrated that the parties intended to examine the Expert’s reasoning for manifest error. 

As a result, the Court found that it was permitted to review documents expressly referred to in the determination and that consideration of these materials could not amount to an impermissible ‘extensive investigation’. In fact, this was the very type of investigation the parties envisaged taking place in the event one party was to challenge the determination for manifest error.

Following a summary of the relevant legal principles the Court held that there had been manifest error. The Court found that the Expert had misapplied two defined terms within the Concession Agreement. The Expert’s interpretation of the defined terms conflated “or” with “and” and as a result treated multiple transactions as a single transaction. This resulted in an erroneous blended calculation of the amount to be paid to E20 which had no basis in the rules of the Concession Agreement. The Court held that the error was obvious and was unlikely to admit a difference of opinion. The reasoning for the errors made can be explained by properly applying the actual words of the Agreement and performing the required mathematics. This is different to exercising fine judgment as to construction on which there may be a difference of opinion.

Significance

This case is a rare example of a party succeeding in setting aside an expert determination. It should be noted that in these circumstances it is not the Court’s role to consider whether the Expert erred in law. It is not an appeal. Even if the Court were to 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. The ability to contest a determination is much more limited.

The Court in this case has clarified the guidance on what constitutes manifest error and has provided a somewhat more helpful description than previous authorities which described it as a “howler” or a “blunder”. This decision has made clear that misapplication of the words of a contract can constitute manifest error, but differing interpretations may not. Further, a determination that is accompanied by the Expert’s reasoning allows parties to examine that reasoning for manifest error. 

This decision is also a reminder that parties should carefully consider the terms of any agreement to refer disputes to an expert. Expert determination is often rightly viewed as a relatively quick and cost-efficient method of dispute resolution. However, avenues for challenge are very narrow and the extent of a party’s ability to do so is informed by the wording of the agreement itself. Care must be taken in drafting such ADR provisions to ensure that it is clear exactly what disputes are to be resolved by which method and that the avenues for any challenge are appropriate in the circumstances.