Expert determination clauses provide for certain issues arising under a

contract to be resolved by an individual appointed as an expert. Such

clauses have been used for many years in connection with determining quality
in commodity contracts, dispute resolution in construction contracts, share
valuation under shareholder agreements and for redetermination disputes and
price reviews in the oil and gas industry.
It is important to note that an expert can only be appointed under the terms of
the contract, and accordingly the effect of an expert determination clause is
entirely dependent on the contractual provisions.
The most important aspect of expert determination is that although it may appear
straightforward, it can in practice give rise to serious dispute if the terms are not clear and
comprehensive.
Attitude of the Court
The English Courts have consistently held that expert determination clauses will be upheld
provided that the terms are clear, and the clause is operated strictly in accordance with its
terms. In Kollerich v The State Trading Corporation of India, the contract provided for SGS
to carry out pre-loading inspection of cement. SGS, however, appointed a subcontractor to
carry out the inspection, and it was held by the Court that certificates issued were not final
and binding because the wording provided expressly that the inspection should be carried out
by SGS.
A further illustration of this principle is provided by Rollimpex v Dossa where it was held that
the contract did not expressly provide that the certificates issued would be final and binding,
and the certificates were not in the correct form called for by the contract. A further
illustration is provided by David Pratt v Gulf Oil where the contract contained the wording
mutual acceptable independent inspectors to verify quantity and quality. It was held that
the word verify was not sufficiently precise to have the effect of making the certificates
which were issued final and binding.
These cases illustrate that the wording of such clauses is vital, and the way in which the
expert determination is conducted, and the form of the certificate or report, can also be of
crucial importance in whether the determination is final and binding. Careful drafting is
therefore essential if the parties want to achieve finality.
These decisions demonstrate how careful parties need to be in drafting expert determination
clauses to make sure that the task which the parties want carried out is clearly defined, and
that the material the expert is allowed to consider is specified.