There had been an expert determination by an accountant of the amount of sales for the purpose of the valuation of shares. The accountant had made his determination in the form of a non speaking certificate. The court was asked when such a jointly appointed expert’s valuation could be set aside.
Held: The decision of an expert is binding on the parties unless the expert had departed from the instructions in a material respect.
Dillon LJ said: ‘On principle, the first step must be to see what the parties have agreed to remit to the expert, this being, as Lord Denning M.R. said in Campbell v Edwards, a matter of contract. The next step must be to see what the nature of the mistake was, if there is evidence to show that. If the mistake made was that the expert departed from his instructions in a material respect – e.g., if he valued the wrong number of shares, or valued shares in the wrong company, or if, as in Jones (M.) v. Jones (R.R.) [1971] 1 W.L.R. 840, the expert had valued machinery himself whereas his instructions were to employ an expert valuer of his choice to do that – either party would be able to say that the certificate was not binding because the expert had not done what he was appointed to do.
The present case is quite different, however, as [the experts] have done precisely what they were asked to do.’
Judges:
Dillon LJ, Simon LJ
Citations:
[1992] 1 WLR 277, [1992] 2 All ER 170
Arbitration
Updated: 06 May 2022; Ref: scu.470519