Flowgroup Plc v Co-Operative Energy Ltd

Flowgroup Plc v Co-Operative Energy Ltd

The expert's determination was not vitiated by manifest error. The expert correctly interpreted the contract, applied the Consistent Basis test, and exercised accounting judgment within her mandate. None of the alleged errors by the Seller met the threshold of manifest error, which requires an obvious blunder or oversight. The expert's approach to post-balance sheet events and the application of accounting principles was within her discretion and expertise as mandated by the agreement.

Parties
Claimant: Flowgroup PLC (in liquidation); Defendant: Co-operative Energy Limited
Jurisdiction
England and Wales
Judgment Date
19 February 2021
Procedural Posture
Commercial Dispute (part 8 Claim) / Judgment After Trial of Claim Under CPR Part 8
Outcome
Claim dismissed
Legal Topics
Expert Determination, Manifest Error Exception, Share Purchase Agreement, Working Capital Adjustment, Contractual Interpretation
Commercial Law Contract Law Expert Determination Manifest Error Exception Share Purchase Agreement Working Capital Adjustment Contractual Interpretation

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Parties

Flowgroup PLC (in liquidation)

Claimant

Co-operative Energy Limited

Defendant

Procedural Posture

Commercial Dispute (part 8 Claim) / Judgment After Trial of Claim Under CPR Part 8

Legal Issues

  1. 1 Whether the expert's determination under the share purchase agreement was vitiated by manifest error
  2. 2 Proper interpretation of 'manifest error' in expert determination clauses
  3. 3 Whether the expert applied the correct contractual and accounting principles in the working capital adjustment

Ratio Decidendi

The expert's determination was not vitiated by manifest error. The expert correctly interpreted the contract, applied the Consistent Basis test, and exercised accounting judgment within her mandate. None of the alleged errors by the Seller met the threshold of manifest error, which requires an obvious blunder or oversight. The expert's approach to post-balance sheet events and the application of accounting principles was within her discretion and expertise as mandated by the agreement.

Court Disposition

Claim dismissed

Orders

  • Seller's claim to set aside the expert's decision for manifest error is dismissed.