Civil Engineering Reference
In-Depth Information
Perhapssurprisingly,ithasbeenfoundthatthereisnorequirementfortherules
of natural justice or due process to be followed in an expert determination for the
decision in that process to be valid and binding. However, a decision made due to
actual bias (not just a perception of bias) on the part of the expert would be capable
of being set aside.
The courts have established ground rules as to how an expert determination should
be conducted, and have had to decide whether they should put court actions on hold
to allow the matters in dispute to be referred to expert determination. This can be
duetoquestionsbeingraisedastotheextenttowhichthecourthasanyright,for
example, to determine whether or not an expert has jurisdiction to hear a dispute.
The courts have decided they are entitled to consider questions as to whether the
expertdoesinfacthavejurisdictiontodecideadisputeunderanexpertdetermination
clause. This was the issue in
Barclays Bank plc
v.
Nylon Capital LLP
(2011). In that
case, the agreement contained an expert determination clause stating that in the event
of a dispute regarding profits, a party could refer the matter to an accountant for a
determination. he reference could be made 30 days after an allocation of profits had
been made. Barclays argued the expert had no jurisdiction because Nylon had not yet
allocated profit.
The court distinguished the approach to an expert determination clause from that
to an arbitration clause. Arbitration was usually an alternative to court for resolu-
tion of disputes. With expert determination, these clauses tended to refer only certain
types of dispute to an expert, reserving other types to the court. In this case, whatever
decision the expert made on jurisdiction could be challenged. hat was different from
his determination of a matter within his jurisdiction which was not challengeable.
In
WilkyPropertyHoldingsplc
v.
London and Surrey Investments Limited
(2011),
the court stayed (put on hold) a claim concerning the interpretation of a consultancy
agreement where the agreement contained an expert determination clause to allow
the matter to be decided through expert determination.
In
Toepfer
v.
Continental Grain Co
. (1974), it was said:
When parties enter into a contract on terms that the certificate of some inde-
pendent person is to be binding as between them, it is important that the court
should not lightly relieve one of them from being bound by a certificate which was
honestlyobtainedandnotvitiatedbyfraudorfundamentalmistakeonthepartof
the certifier.
In
Jones and Others
v.
Sherwood Computer Services plc
(1992), it was said the princi-
pal ground for challenge would be that an expert had materially departed from his
instructions, so that the determination is not a determination made in accordance
with the terms of the contract. Material is said to be anything other than trivial or
de
minimis
, meaning that it is so minor as not to make any possible difference to either
party. In such cases, the determination would not be binding on the parties.
In
Nikko Hotels (UK) Ltd
v.
MEPC plc
(1991), it was said that unless the terms of
the contract provided otherwise, an expert determination cannot be challenged on
the ground the expert made a mistake, as long as the expert answered the question
which was put to him and had not otherwise departed from his instructions.
