- ‘Manifest error’ in expert determination clauses—a visibility test? (Flowgroup plc (in liquidation) v Co-Operative Energy Ltd)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Meaning of the exception in general terms
- Contractual interpretation
- Conclusion in this case
- Case details
Commercial analysis: This was the trial of a claim arising out of an acquisition agreement, pursuant to which the claimant was to sell to the defendant the entire allotted and issued share capital of the claimant’s wholly owned subsidiary. The purchase price was subject to a working capital adjustment. A dispute arose as to what the working capital was. It was referred to expert determination. Under the terms of the agreement, the expert’s written decision on the matters referred to them was to be final and binding in the absence of manifest error. The determination was largely favourable to the defendant. The claimant challenged the determination and argued that it should be challengeable as being based on a manifest error if the error was capable of being demonstrated from the face of the record. The judge held that this would make it too easy to challenge expert determinations. It was found there were no manifest errors and the claim was dismissed. Written by Nora Wannagat, barrister, at 9 Stone Buildings.
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