WH Holding Ltd v London Stadium LLP [2026] EWCA Civ 153

WH Holding challenged an expert's determination that it owed an additional £3.6m under an overage clause in a stadium concession agreement. The Court of Appeal allowed E20's appeal, holding the expert's contractual interpretation was not so obviously wrong as to constitute manifest error.

Facts

E20 Stadium LLP (now London Stadium LLP), the head leaseholder of the London Stadium, granted WH Holding Ltd (“WHH”), owner of West Ham United Football Club, a 99-year concession under an Agreement dated 22 March 2013. Clause 20 contained an ‘overage’ or ‘anti-embarrassment’ provision requiring WHH to pay a ‘Stadium Premium Amount’ to E20 upon qualifying share disposals by ‘Relevant Shareholders’ (principally Mr Sullivan and the late Mr Gold).

On 11 November 2021, a transaction took place involving 1890 Holdings AS: (i) the purchase of 187 shares from Relevant Shareholders for approximately £25.8m (‘the Share Purchase’); (ii) the grant of a call option over a further 1,022 shares from Mr Sullivan for an £18m premium (‘the Call Option’); and (iii) a subscription for 688 new shares. The Share Purchase and Call Option were part of one overall commercial arrangement. The Call Option was not ultimately exercised, but the £18m premium was retained.

The parties disagreed on whether the £18m premium should be included in calculating the Stadium Premium Amount. Taken alone, the Call Option premium fell below the £125m Threshold Amount and would not trigger any payment. Combined with the Share Purchase as a single Qualifying Transaction, an additional £3.6m would be payable. The dispute was referred to Terence Mowschenson KC (“the Expert”) under clause 50, whose determination was stated to be final and binding “in the absence of manifest error”. The Expert found in favour of E20, determining an additional £3.6m was due.

WHH issued a Part 8 claim challenging the determination. Paul Mitchell KC, sitting as a High Court Judge, found two manifest errors and declared the determination not binding. E20 appealed.

Issues

The principal issue on appeal was whether the Expert’s determination was affected by ‘manifest error’ such that it was not final and binding under clause 50.5(c). This involved:

• Whether the Expert erred in treating the Share Purchase and Call Option as a single Qualifying Transaction;
• Whether the Expert erred in applying both sub-clauses (b) and (c) of the definition of ‘Consideration’ to a single Qualifying Transaction, given the disjunctive ‘or’;
• Whether any such errors were so obvious as to admit of no difference of opinion.

Arguments

E20 (Appellant)

E20 argued that the Judge mischaracterised the exercise as merely applying the words of the Agreement and doing mathematics, when it in fact involved genuine questions of construction. The Expert’s interpretation was, at a minimum, not so obviously wrong as to admit of no difference of opinion. The transaction was commercially a single arrangement and the Agreement’s wide definitions supported treating it as one Qualifying Transaction.

WHH (Respondent)

WHH contended that the definition of ‘Consideration’ used a disjunctive ‘or’, permitting only one of sub-clauses (a), (b) or (c) to apply per Qualifying Transaction. The formula produced a single extrapolated 100% valuation, and the Expert’s ‘blended’ approach had no basis in the Agreement. WHH emphasised that where parties agree a mathematical formula, an incorrect interpretation producing a wrong answer should not bind them. Commercially, the Call Option price per share did not meet the threshold and so should not attract overage.

Judgment

The Court of Appeal (Phillips LJ, with whom Falk and Zacaroli LJJ agreed) allowed the appeal and declared the determination valid and binding.

Legal principles on manifest error

Phillips LJ reviewed the authorities, including Veba Oil Supply & Trading GmbH v Petrotrade Inc and the Supreme Court’s decision in Sara & Hossein Holdings Ltd v Blacks Outdoor Retail Ltd [2023] UKSC 2. The governing test is that, absent contrary contractual terms, 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. An arguable error does not suffice, however well-founded the allegation may ultimately prove to be.

Rejection of proposed refinements

Phillips LJ rejected E20’s submission that ‘limited investigation’ means ‘without adversarial argument’, holding that reliance on The Nema was inapposite as that concerned leave to appeal arbitration awards on points of law. He also rejected the criticism that the Judge below wrongly reasoned in two stages (first finding a mistake, then assessing obviousness) — such an approach is permissible and indeed natural.

Critically, Phillips LJ rejected WHH’s submission that incorrect interpretation of a contractual mathematical formula is necessarily a manifest error. This impermissibly conflated the manifest error test with the separate question of whether the expert complied with instructions. The Expert was instructed to determine the dispute without manifest error, not to produce the ‘correct’ interpretation. The general test for manifest error applies equally to decisions on contractual interpretation, as shown by Invensys plc v Automotive Sealing Systems Ltd, Walton Homes Ltd v Staffordshire CC, and Flowgroup plc v Co-operative Energy Ltd.

Application to the Expert’s determination

Phillips LJ accepted the force of WHH’s arguments and indicated he might have reached the same interpretation had he been construing the Agreement afresh. However, the definition of ‘Qualifying Transaction’ was wide enough to encompass the composite arrangement, particularly given the words ‘any transaction having the same or substantially similar effect’. Sub-clause (c) of ‘Consideration’ began ‘if any share purchase option… is being sold in that Qualifying Transaction’, providing support for treating an option as one part of a larger transaction.

The word ‘or’ can, depending on context, bear a conjunctive meaning, and WHH itself accepted it operated as ‘and/or’ within sub-clause (c). The Expert was entitled to have regard to the purpose of the overage provision — to capture monies received by Relevant Shareholders above the Threshold. Although the Agreement did not expressly stipulate how to aggregate Adjusted Consideration from multiple elements or how to pro-rate, similar issues would arise in any multi-tranche sale at differing prices.

Phillips LJ disagreed with the Judge’s view that the provisions were ‘admirably clear’. The Expert’s approach, based on the arguable finding of a single Qualifying Transaction, was a different starting point from the Judge’s, but not so obviously wrong as to admit of no difference of opinion. The determination was therefore not manifestly in error.

Implications

The decision reinforces the narrow scope of the ‘manifest error’ exception in expert determination clauses. Where parties entrust an expert with resolving disputes including issues of contractual interpretation, they cannot readily escape the determination merely by demonstrating that the expert’s construction was wrong; they must show it was obviously wrong to a degree admitting of no difference of opinion.

The judgment clarifies several points of approach:

• The same manifest error test applies to questions of contractual interpretation as to other determinations — there is no special category of ‘formula’ clauses attracting a different standard.
• A challenge founded on an alleged misinterpretation cannot be repackaged as a failure to follow instructions; the expert’s instructions are typically to determine the dispute without manifest error, not to reach the ‘correct’ answer.
• Adversarial argument is permitted in a manifest error challenge, and a two-stage reasoning approach (identifying the error, then assessing its obviousness) is legitimate.
• Where competing interpretations of a contract both have arguable merit, the expert’s determination will generally stand.

The decision is of particular significance to commercial parties who routinely include expert determination clauses in share sale agreements, joint venture arrangements, rent reviews, earn-outs and overage provisions. It emphasises the finality such clauses are intended to deliver and signals that courts will not readily interfere with an expert’s determination on interpretative questions, even where the court itself might have reached a different view.

Verdict: Appeal allowed. The Court of Appeal set aside the declaration made by the Judge below and declared that the Expert’s determination dated 12 February 2023 is valid and binding on the parties.

Source: WH Holding Ltd v London Stadium LLP [2026] EWCA Civ 153