VAR: Court of Appeal confirms test for “manifest error” in football expert determination
A recent Court of Appeal judgment has unanimously allowed an appeal by London Stadium LLP ("E20"), overturning the High Court's decision that an expert's determination of an amount payable under a concession agreement was affected by manifest error.
WH Holding Limited v London Stadium LLP (Formerly E20 Stadium LLP) [2026] EWCA Civ 153, which was handed down on 23 February 2026, confirms the high bar that must be met for successfully challenging an expert determination on the grounds of manifest error, particularly where issues of contractual interpretation are concerned.
Background
E20 (a public body) is the head leaseholder of the London Stadium, which was constructed as part of the investment in the 2012 London Olympics. By a concession agreement dated 22 March 2013 (the “Agreement”), E20 granted a 99-year concession to WH Holding Limited (“WHH”), owner of West Ham United Football Club (the “Club”), to hold football matches at the Stadium.
Clause 20 of the Agreement contains an "overage" or "anti-embarrassment" provision, intended to ensure that E20 could share in the value realised by any qualifying share disposition by a "Relevant Shareholder" (defined to include the Club's principal owners and their family members). Under this provision, when a "Qualifying Transaction" takes place and the "Adjusted Consideration" meets the "Threshold Amount" of £125 million, a "Stadium Premium Amount" becomes payable, calculated by reference to an escalating percentage of the value over that threshold.
On 11 November 2021, a transaction took place whereby a new investor, 1890 Holdings AS (“1890“), acquired a 27% shareholding in WHH. The transaction comprised three elements:
- a share purchase of 187 shares from Relevant Shareholders for over £25.8m;
- a call option entitling 1890 to purchase a further 1,022 shares from a Relevant Shareholder for £282m, in exchange for an £18m premium; and
- a subscription for 688 new shares for £125m.
The parties agreed that the share purchase would give rise to a Stadium Premium Amount of over £2.5m. The dispute concerned whether the £18m call option premium should also be included in the calculation, which would produce an additional £3.6m payable to E20.
The expert determination and High Court decision
The dispute was referred to an expert under clause 50 of the Agreement, which provided that the expert's determination "shall (in the absence of manifest error) be final and binding". The expert determined that the share purchase and the call option formed a single Qualifying Transaction, and that the £18m premium should be included in the calculation, resulting in an additional £3.6m being payable (plus interest).
WHH challenged the determination by way of a Part 8 claim for declaratory relief, issued on 18 December 2023. WHH argued that the expert had made two manifest errors:
- first, in applying a "blended" calculation using two different sub-clauses of the definition of Consideration (which are expressed as alternatives separated by “or”); and
- second, in characterising the share purchase and the call option as a single Qualifying Transaction.
Following a hearing on 12 December 2024, Paul Mitchell KC, sitting as a Deputy High Court Judge, by way of judgment dated 27 January 2025, agreed with WHH on both points. He found that the definition of Consideration provided three alternative methods of calculation, and that using more than one in relation to a single Qualifying Transaction, and then blending the results, had "no basis in the rules" contained in the Agreement. He also found that the expert had made a second error in characterising the share purchase and the call option as a single Qualifying Transaction, when in fact the calculation mechanism in the Agreement did not permit the two transactions to be combined in this way. He concluded that the expert's errors met the legal test for manifest error.
The Court of Appeal's decision
The Court of Appeal (Lord Justice Phillips, Lady Justice Falk and Lord Justice Zacaroli) unanimously allowed E20's appeal, declaring the expert determination valid and binding.
The legal test for manifest error
Lord Justice Phillips confirmed the applicable test for manifest error, drawing on the Supreme Court's decision in Sara & Hossein Holdings Ltd v Blacks Outdoor Retail Ltd [2023] UKSC 2 and the earlier Court of Appeal authority of Veba Oil Supply and Trading GmbH v Petrotrade Inc [2001] EWCA Civ 1832. An error will be manifest if, after investigation limited in time and extent, it is "so obvious (and obviously capable of affecting the determination) as to admit of no difference of opinion". Crucially, “an arguable error will not suffice, however well founded the allegation of error may ultimately prove to be."
The Court of Appeal rejected WHH’s submission that where an expert incorrectly interprets a contractual formula, that interpretation is necessarily a manifest error. Lord Justice Phillips held that there is no basis for treating contractual provisions containing a "formula" any differently from other contractual terms. In either case, a party challenging an expert determination must show not only that the expert reached the wrong interpretation, but that the interpretation was "so obviously wrong that it will admit of no difference of opinion".
Application to the facts
The Court of Appeal accepted that WHH's interpretation had force, and that if the court were determining the proper interpretation of the Agreement, it might conclude that WHH was correct. However, the question was not whether the expert was right or wrong, but whether the expert's determination was manifestly erroneous.
Lord Justice Phillips found that the expert’s approach was based on an arguable finding that there was one Qualifying Transaction. The definition of Qualifying Transaction was wide enough to encompass the whole transaction as "a sale of shares and including a share purchase option", particularly given the phrase "any transaction having the same or substantially similar effect". The word "or" separating the sub-clauses of the definition of Consideration could be read as providing alternative provisions for different elements of one Qualifying Transaction, but not necessarily exclusive of each other.
The expert was further entitled to take into account the purpose of the overage provision and conclude that the parties intended any monies received by Relevant Shareholders in excess of the threshold to be taken into account.
Critically, the Court of Appeal held that the expert’s approach was "a different starting point from that which WHH and the Judge would prefer, but not so obviously wrong as to admit of no difference of opinion". The Court of Appeal also held that the expert had not departed from his instructions and so the determination could not be challenged on that alternative basis.
Comment
This decision provides important clarity on the standard required to establish manifest error in an expert determination, particularly where issues of contractual interpretation arise. Several key points emerge for practitioners.
The manifest error threshold is high: An expert determination will not be set aside merely because the court considers that the expert reached the wrong answer. The challenging party must demonstrate that the error is so obvious as to admit of no difference of opinion. As the Supreme Court stated in Sara & Hossein, "an arguable error will not suffice”.
Contractual interpretation is not a special category: There is no lower threshold for manifest error where the expert’s task involves interpreting contractual provisions, even where those provisions might be characterised as containing a "formula". The same test applies as for any other type of determination.
Starting points matter: Where a contractual provision is capable of more than one interpretation, an expert who reaches a determination based on an arguable reading of the contract will not have made a manifest error, even if the court prefers a different interpretation. The Court of Appeal emphasised that the expert took a "different starting point" which was not so obviously wrong as to be manifestly erroneous. The expert is engaged to determine the dispute, not the “right” construction.
Purposive interpretation is permissible: Experts are entitled to consider the commercial purpose of contractual provisions when reaching their determinations. For parties entering into contracts containing expert determination provisions, this decision underscores the importance of carefully drafting such clauses to define the expert's remit and the grounds upon which a determination may be challenged. Parties should also consider whether they wish to expand or narrow the scope for challenging an expert's findings, noting that "manifest error" provides only a very limited window of opportunity to set aside an unfavourable determination.
Take care in preparing instructions: Parties have an additional ground of challenge where an expert has departed from their instructions in any material respect (as opposed to complying with their instructions but making a manifest error). Care should therefore be taken to record the precise scope of the expert’s instructions and, if possible, agree between the parties any matters of common ground or points that the expert can treat as not in dispute and therefore outside the scope of the determination. This may mitigate the risk of the expert going “off piste” and rendering their decision vulnerable to challenge.
