Enforcing expert's decisions: Owen Pell Ltd v Bindi (London) Ltd

June 2008

The judgement of Pell Owen Limited v Bindi (London) Limited was handed down on 19 May 2008 and offers some useful guidance on the enforcement of Expert's determinations.  The judgement made it clear that a Expert's decision would be upheld unless there was evidence:

• that the Expert had answered the wrong question;
• of fraud;
• of collusion;
• or of bias.

This means that an Expert's decision could contain errors but would still be upheld by the courts.

Pell had carried out some building work for Bindi which was not complete when Pell left site.  A dispute over payment arose and the parties agreed to appoint an Expert.  This agreement included a provision that the parties would be bound by the Expert's decision.  The Expert inspected the works and gave a decision in favour of Pell which Bindi refused to honour resulting in Pell seeking to enforce the decision.

Bindi argued that there was an implied term in the agreement that the decision would only be enforceable if free from gross or obvious error or perversity in its conclusions.  Bindi's contention's also included that the Expert was guilty of actual and perceived bias and partiality on a number of grounds and that the Expert’s conclusions contained “gross and obvious errors” and were perverse.     

The Court concluded that the effect of such an implied term would undermine the commercial purpose of the Agreement thereby frustrating its use because the ultimate intention of the agreement was to arrive at a final and binding decision. 

As long as the Expert answers the question put to him, his decision is binding and eh is not confined by the rules of due process or natural justice.  This is the case even if the decision contained errors.  

The court found that there was no evidence of actual bias on the part of the Expert, nor was the test for apparent bias (the view of a fair-minded and informed observer) met.  The Expert’s decision answered the question asked of him, and was within the remit of the agreement.  It was not open to the court to refuse to enforce the decision by reason of errors even if such errors were gross, obvious or perverse; a determination is binding and enforceable even if it is wrong.

This case shows the limited scope fo challenging an Expert's determination and therefore if you need to ensure that you have wider grounds for challenging your expert determination agreements must be drafted accordingly. 

This article contains information on current legal issues but is for information purposes only.  It should not be relied upon or be construed as advice or applied to any particular set of facts.  If you have a particular issue please take professional advice.