Expert determination is a process where the parties agree to refer a specific question — often technical or valuation-related — to an independent expert whose decision is binding under the contract. It is common in share purchase agreements (for completion accounts or price adjustments), construction contracts (for technical measurements) and long-term supply contracts (for price reviews).
The key difference from arbitration is legal status. An arbitral award is governed by the Arbitration and Conciliation Act, 1996 and is enforceable as a decree. An expert determination is contractual: it binds the parties because they agreed it would, and it is enforced through the contract rather than directly as a decree.
Expert determination is usually faster and cheaper. The expert applies their own expertise, often without formal hearings or witness evidence, and focuses only on the question referred.
Its limitations are important. The expert typically cannot decide questions of law or broad disputes about liability, and challenging a determination is very difficult unless the expert departed from their instructions or there was fraud.
Many well-drafted contracts use both: expert determination for defined technical or valuation questions, and arbitration for everything else. The clause must draw the boundary clearly, or the parties will end up arguing about which process applies.