Dandara South East Limited v Medway Preservation Limited & Anor

An expert determination clause may be separable from the underlying contract where that is the parties’ objective intention. The question is one of contractual construction. A broadly worded clause covering any dispute concerning the contract may operate as a one-stop dispute-resolution provision, particularly where it is not carved out of an exclusive jurisdiction clause. There is no general presumption that expert determination clauses receive the same wide interpretation as arbitration clauses, because they commonly reserve only specified disputes for expert resolution. A court may stay proceedings where the parties have agreed to expert determination. A general assertion that the dispute is factually complex will not discharge the heavy burden of showing that the agreed procedure is unsuitable.

The claimant contracted to purchase land from the first defendant, with the second defendant named as contractor for earthworks required before completion. The claimant purported to terminate the contract after the long-stop date and sought repayment of its deposit. The defendants disputed the court’s jurisdiction and applied for a stay under clause 28, which required disputes concerning the contract to be determined by an expert.

The claimant argued that clause 28 did not cover the dispute, was not separable from a contract which had ended, and was unsuitable because the dispute involved contractual construction and complex factual and technical issues. The central questions were the scope and separability of the expert determination clause and whether the court should refuse a stay on suitability grounds.

1. Application granted. The claim was stayed to enable compliance with clause 28.
2. Clause 28.1, referring to “any dispute or difference between the parties as to any matter under or in connection with” the contract, was broad and mandatory. Its natural meaning covered disputes about termination, continuing breach and the validity or effect of the practical completion statement. The absence of a carve-out from the exclusive jurisdiction clause favoured a one-stop construction.
3. The reasoning applicable to arbitration clauses in Fiona Trust did not create a general presumption for expert determination clauses. Expert clauses commonly allocate only specified disputes to an expert, leaving other disputes for the court. The issue was therefore one of construction, without a presumption either way. On the wording and commercial context, however, this clause covered all contractual disputes.
4. There was no reason in principle why an expert determination clause could not be separable from the underlying contract. Separability depended on objective contractual intention. Given the one-stop structure, clause 28 was separable at least for determining whether the contract had been terminated by a supervening event. It was unnecessary to decide whether it was separable for a dispute that the contract had never been validly made.
5. The determination was conclusive and binding subject to manifest error or omission. The court retained a role in enforcing it and could review a determination based on the wrong contractual meaning, because the expert would thereby have acted outside the agreed decision-making authority.
6. The claimant bore a heavy burden in resisting a stay on suitability grounds. The procedure did not suffer from the fundamental defects identified in Cott. The possibility of factual or technical issues, the short timetable and the absence of court-style disclosure did not establish unsuitability. An expert could obtain independent advice, and the dispute appeared capable of expert determination.