Expert Determinations: “Manifest Error” Requires an Obvious Blunder, Not Merely a Wrong Construction of a Contractual Formula

Case: WH Holding Ltd v London Stadium LLP (Formerly E20 Stadium LLP)
Citation: [2026] EWCA Civ 153
Court: England and Wales Court of Appeal (Civil Division)
Date: 23 February 2026

1. Introduction

This appeal concerns the narrow circumstances in which an English court will set aside an expert determination on the ground of “manifest error”, particularly where the alleged error is said to arise from interpretation and application of a contractual payment formula.

The dispute arose under a long-term Concession Agreement (22 March 2013) between:

• E20 (London Stadium head leaseholder; a public body), and
• WH Holding Ltd (“WHH”), owner of West Ham United Football Club Limited (the Club), which has played home matches at the Stadium since 2016.

Clause 20 of the Agreement contains an “overage” / “anti-embarrassment” mechanism requiring WHH to pay E20 a “Stadium Premium Amount” if a “Qualifying Transaction” by “Relevant Shareholders” (Mr Sullivan, Mr Gold and defined affiliates/family members) yields Adjusted Consideration at or above a Threshold Amount (£125m).

The trigger event was a 2021 investment transaction under which 1890 Holdings AS acquired a 27% stake in WHH through (i) a share purchase from existing shareholders (including Relevant Shareholders), (ii) an £18m premium paid for a call option over additional shares, and (iii) a subscription for new shares. The central issue was whether the £18m option premium should be included when calculating the Stadium Premium Amount, on the footing that the share sale and option were part of one Qualifying Transaction.

The Agreement required disputes on this calculation to be referred to an expert under clause 50, whose decision would be final and binding “(in the absence of manifest error)”. The Expert (Terence Mowschenson KC) determined on 12 February 2023 that WHH owed an additional £3.6m. The High Court (Paul Mitchell KC) set the determination aside for manifest error. E20 appealed.

2. Summary of the Judgment

The Court of Appeal allowed E20’s appeal and declared that the Expert’s determination is valid and binding.

• The Court reaffirmed that “manifest error” is a narrow gateway: it is not enough to show the expert was wrong; the error must be obvious and admit of no difference of opinion, after only limited investigation.
• The Court rejected the notion that “limited investigation” means no adversarial argument; manifest-error challenges proceed by ordinary court process (often Part 8), where argument and (where admissible) extrinsic evidence may be used.
• The Court rejected any special rule that misinterpretation of a contractual “mathematical formula” is inherently or automatically “manifest error”. Even with formulaic provisions, an arguable interpretation will typically defeat a manifest error challenge.
• Applying those principles, the Expert’s approach—treating the share sale and option as one Qualifying Transaction and aggregating the effect—was arguable in text and purpose, and therefore not manifestly wrong.

3. Analysis

3.1 Precedents Cited

The Court’s reasoning is built on a consistent line of authority emphasising finality of expert determinations and the narrowness of “manifest error” carve-outs.

The Judgment also references “Chartbrook” (in the discussion of Walton Homes), illustrating the type of contractual interpretation principles experts may draw on; however, the Court’s decision here turns on the manifest-error threshold, not on adopting any particular interpretive canon as determinative.

3.2 Legal Reasoning

(a) The contractual and procedural setting: finality with a narrow escape hatch

Clause 50.5(c) made the Expert’s determination final and binding unless affected by manifest error. The Court reaffirmed the orthodox position:

• an expert’s mistake does not by itself vitiate the determination (Campbell v Edwards; Jones v Sherwood Computer Services plc);
• the contractual phrase “manifest error” creates only a narrow challenge route (Sara & Hossein Holdings Ltd v Blacks Outdoor Retail Ltd), focused on errors which are obvious and indisputable after limited investigation.

(b) “Limited investigation” does not exclude adversarial argument

E20 argued that manifest error should be ascertainable without adversarial argument, relying on Pioneer Shipping Ltd. v B.T.P. Tioxide Ltd. ("the Nema"). The Court rejected this:

• the Nema concerns a different statutory context (leave to appeal arbitration awards on a point of law) and a streamlined paper-based procedure;
• manifest-error challenges to expert determinations are brought by ordinary claims/applications (often Part 8), where argument and (subject to the contract) extrinsic evidence are part of the process.

(c) A judge may decide “error” first, then decide if it is “manifest”

E20 criticised the High Court’s two-stage method (first deciding the expert was wrong; then asking if the error was manifest). The Court of Appeal held there is no doctrinal prohibition on that reasoning structure: the test itself naturally separates (i) identifying an error and (ii) assessing obviousness/indisputability.

(d) No special carve-out for “mathematical formula” clauses

WHH argued that because the contract contained a “mathematical formula,” any misinterpretation/misapplication producing the wrong number should be non-binding unless the clause is genuinely ambiguous. The Court rejected that approach for two reasons:

• It confuses “manifest error” with “departure from instructions”. Here, the Expert’s instructions were to determine the parties’ dispute about interpretation/application of the overage mechanism, not to guarantee a “correct” answer.
• Authorities show that where experts decide contractual interpretation issues, the challenger must show the expert’s interpretation is obviously wrong, not merely wrong (Invensys plc v Automotive Sealing Systems Ltd; Walton Homes Ltd v Staffordshire County Council; Flowgroup Plc v Co-Operative Energy Ltd).

(e) Application to the Stadium Premium dispute: “arguable” defeats “manifest”

The High Court characterised the Expert’s approach as (i) wrongly reading “or” as “and” within the definition of “Consideration”, and (ii) adopting a “blended” valuation and split pro-rating mechanism not found in the Agreement. The Court of Appeal accepted that WHH’s (and the Judge’s) criticisms had force and might even be correct on the merits—but that was not the legal question.

The Court held the Expert’s construction was arguable and therefore not manifestly erroneous, highlighting:

• The definition of Qualifying Transaction is broad (“any sale or transfer… including… rights to purchase shares… share purchase option… or any transaction having the same or substantially similar effect”), making it arguable that the share sale and option—concluded as one “overall commercial arrangement”—could be treated as one Qualifying Transaction.
• The “Consideration” definition includes sub-clause (c) beginning “if any share purchase option… is being sold in that Qualifying Transaction…”, lending some textual support to the idea that an option can be an element within a wider Qualifying Transaction.
• The Court was not persuaded it was “obvious” that “or” could not be read to allocate different sub-clauses to different elements of one composite transaction; it noted that “or” can be conjunctive in some contexts and that, in any event, the parties accepted an “and/or” reading elsewhere in sub-clause (c).
• The Agreement did not clearly address complex real-world structures (e.g., different tranches/prices; option premiums that are economically significant but do not straightforwardly “extrapolate” value of 100% of the Club if unexercised). In that setting, the Expert’s method (aggregation and pro-rating by share counts) was “arguably sensible” if one accepts the composite Qualifying Transaction premise.

Accordingly, because the Expert’s approach was not so obviously wrong as to admit of no difference of opinion, the determination remained binding.

3.3 Impact

(a) Litigation risk and the high bar for “manifest error”

This decision reinforces that “manifest error” is not a merits appeal in disguise. Even where a judge believes an expert may have reached the “wrong” construction, that will not suffice if the expert’s reading is reasonably arguable. Parties seeking to overturn determinations on interpretive grounds face a stringent threshold.

(b) Drafting implications: overage and anti-avoidance mechanics must be explicit

The dispute illustrates a common drafting gap in overage provisions: how to treat multi-limb transactions (share sale + options + subscriptions), and how to aggregate consideration and apply thresholds/ratchets and pro-rating across components. The Court’s willingness to treat the clause as unclear in application to such structures increases the premium on:

• defining whether linked steps constitute one “Qualifying Transaction” (and how linkage is tested);
• specifying aggregation rules for different “consideration types” (cash price, option premiums, deferred consideration, earn-outs);
• stating pro-rating methodology when different steps relate to different proportions of equity/rights;
• stating whether option premiums are included even if options are unexercised, and whether strike price is counted only on exercise.

(c) Process implications: “manifest error” challenges will remain procedural, but not paper-only

The Court’s rejection of “no adversarial argument” clarifies that parties may deploy ordinary advocacy (and, where permitted, extrinsic evidence) to show an error is obvious—while still respecting the “limited investigation” constraint that prevents a full merits retrial.

4. Complex Concepts Simplified

• Expert determination vs arbitration: an expert acts as a specialist decision-maker (often on valuation/accounting), not as an arbitrator. Courts generally enforce finality unless the expert steps outside instructions, commits fraud, or (if contract allows) makes a “manifest error”.
• “Manifest error”: an error that is plain—obvious or easily demonstrable—after a limited enquiry, and so clear it admits of no rational disagreement. It is narrower than “wrong”.
• Overage / anti-embarrassment: a mechanism allowing one party (here E20) to share in value uplift when another party (here Relevant Shareholders) realises value from a transaction.
• Threshold Amount: the minimum “Adjusted Consideration” that triggers payment (here £125m).
• Extrapolation to 100%: where less than all shares/rights are sold, the contract estimates the implied value of the whole company by scaling up the price paid for a portion.
• Call option premium: the up-front fee paid for the right (but not obligation) to buy shares later at a pre-agreed price; here, the option was not exercised, but the premium was retained.
• Part 8 claim: a procedure typically used where there is no substantial factual dispute and the issue is primarily construction or legal effect (here, the validity of the expert determination).

5. Conclusion

WH Holding Ltd v London Stadium LLP strengthens and clarifies the practical reach of the modern “manifest error” doctrine in expert determination clauses:

• The court will not set aside an expert determination merely because it considers the expert’s construction wrong; the challenger must show the interpretation is obviously wrong and indisputable.
• There is no special rule that alleged misapplication of a contractual “formula” is inherently a manifest error; the same strict test applies.
• In complex, structured transactions (share sales plus options), unless the contract clearly prescribes aggregation and pro-rating, an expert’s “workable” approach may be protected from challenge if it is reasonably arguable.

The broader significance is a reaffirmation of finality and risk allocation: where parties choose expert determination with only a “manifest error” safety valve, they accept being bound by decisions that are arguably defensible—even if not ultimately “right” in a court’s view.