Interpreting accounting treatment in price adjustment mechanisms

The High Court has overturned an expert determination under a share purchase agreement because the expert treated accounting liabilities as assets that increased the purchase price.

The case of Nawaz‑Khan & Ors v UAP Ltd [2026] EWHC 641 (Comm) highlights the risks of loose drafting in price adjustment mechanisms and the dangers of relying on undefined accounting terminology.

Facts

The case concerned the sale of an insurance brokerage business. Under the relevant share purchase agreement, the consideration payable by the buyer was calculated by reference to completion accounts.