A dispute between parties to a contract was to be determined by an independent expert. It was claimed that his report was not binding on the parties, since he had departed from his instructions in a material way. In this context, what constituted a material way. Oil was being transported and was to be valued by testing. The expert used a different method of testing from that specified in the contract.
Held: The test actually used was more accurate than the one specified. Nevertheless the parties had specified the required test, and the party was entitled for it to be used. Was the departure material? A mistake is one thing; a departure from instructions quite another. A mistake is made when an expert goes wrong in the course of carrying out his instructions. The difference between that and an expert not carrying out his instructions is obvious. A mistake which affects the result could previously have vitiated the result. The parties have not agreed to be bound by a test which was not the one specified. Once a material departure from instructions is established, the court is not concerned with its effect on the result. The departure was material, and the test not binding, even though it might not have affected the results.
Judges:
Simon Brown, Tuckey, Dyson LJJ
Citations:
[2001] EWCA Civ 1832, [2002] 1 Lloyd’s Rep 295, [2002] CLC 405, [2002] 1 Lloyd’s Rep 295, [2002] 1 LLR 295, [2002] 1 All ER (Comm) 306, [2002] 1 All ER 703, [2002] BLR 54
Links:
Jurisdiction:
England and Wales
Citing:
Cited – Toepfer v Continental Grain Co CA 1974
Cairns LJ said: ‘When parties enter into a contract on terms that the certificate of some independent 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 . .
Cited – Jones (M) v Jones (RR) 1971
A valuer’s certificate was binding where he as expert had valued machinery himself whereas his instructions were to employ an expert valuer of his choice to do that. He had also he valued the shares on a break-up basis whereas he was instructed to . .
Cited – Jones v Sherwood Computer Services Limited plc CA 1992
A contract provided for the sale and purchase of shares. In the absence of agreement a third party firm of accountants would act as valuer as an expert, and his decision was to be final and binding on the parties. One party now appealed a decision . .
Cited by:
Cited – AIC Ltd v ITS Testing Services (UK) Ltd (‘the Kriti Palm’) CA 28-Nov-2006
The defendant appealed a finding of deceit. Having issued its certificate as to the quality of a cargo of gasoline, it then failed to disclose to the party who had paid it to produce the certificate, information it had which cast doubt on the . .
Lists of cited by and citing cases may be incomplete.
Arbitration
Updated: 05 June 2022; Ref: scu.166984