Tyson International Company Ltd -v- GIC Re, India, Corporate Member Ltd [2025] EWHC 77 (Comm)
This case illustrates the type of confusion that can arise where there are a number of related contracts that have differing and potentially conflicting dispute resolution provisions.
The English Court will, where possible, strive to give effect to an arbitration clause in the presence of a competing jurisdiction clause. However, where it reaches the conclusion that the two clauses are irreconcilable, it should give effect to the prevailing clause. In this instance, the English jurisdiction clause prevailed over the New York arbitration provision.
The contractual background
Tyson Foods, a company registered in Arkansas, USA, owned a large property portfolio and insured its property risks with Tyson International Company Ltd (TICL) pursuant to an insurance policy that was subject to Arkansas law and a US service of suit clause (Captive Policy). The Captive Policy covered the period 1 July 2021 to 1 July 2022.
TICL subsequently reinsured the relevant property risks on a facultative basis with various reinsurers, including GIC, an English company. GIC issued and signed two policy documents that were “slips” or “MRCs” i.e. Market Reform Contracts. The MRCs contained an exclusive English law and jurisdiction clause.
After GIC had issued the MRCs, a Facultative Certificate was issued in respect of each. GIC accepted the Facultative Certificates, which were on the US standard form known as “MURA” or Market Uniform Reinsurance Agreement, as amended by the parties. The Terms and Conditions of the Facultative Certificates provided at clause 13 for New York arbitration and New York law as a condition precedent to any right of action. Clause 19 set out a mutual non-exclusive jurisdiction clause in favour of any court of competent jurisdiction in the US but also stated that this was not intended to conflict with the parties’ overriding obligation to arbitrate their disputes.
The Facultative Certificates took effect as an amendment or endorsement of the MRCs. They incorporated what was described as a Confusion or Hierarchy Clause and which stated: “RI slip to take precedence over reinsurance certificate in case of confusion”. It was not in dispute that “RI” referred to the MRCs.
On 30 July 2021, there was a fire at one of the premises owned by Tyson Foods. TICL accepted coverage under the Captive Policy for the resulting losses. GIC declined to indemnify TICL in respect of the loss.
The procedural background
GIC sought an order from the New York Court to restrain TICL from commencing proceedings in England in respect of any claims that were subject to the arbitration clause in the Facultative Certificates. TICL in turn commenced English court proceedings, seeking a declaration that GIC was obliged to indemnify TICL under the reinsurance contracts, payment of an indemnity and damages for breach of contract. TICL then also sought an anti-suit or anti-arbitration injunction.
The English Court granted interim anti-suit relief. The anti-suit injunction (ASI) was subsequently continued, with the judge reaching an interim view that the English law and jurisdiction provisions in the MRC took precedence over the New York arbitration clause in the Facultative Certificate concluded nine days later due to the effect of the Confusion Clause.
GIC then discontinued the New York court proceedings but instead sought to commence US arbitration. It also applied to challenge the English Court’s jurisdiction, to have the English Court proceedings stayed in favour of arbitration under s.9 Arbitration Act 1996 and to have the anti-suit injunction (ASI) set aside.
Tyson International Company -v- Partner Reinsurance Europe SE
This was a related case between TICL and another excess reinsurer subscribing with GIC to the same risk, involving the same underlying subject matter. In 2024, the Court of Appeal held that the MRC between TICL and the excess reinsurer, which provided for English law and jurisdiction, was superseded by the Facultative Certificate, which provided for New York law and arbitration. That case did not, however, involve consideration of a Confusion/Hierarchy Clause.
The Commercial Court decision
The Court held that subject to the Confusion Clause, the Facultative Certificates were contracts of reinsurance that superseded the contracts of reinsurance contained in or evidenced by the MRCs. Among other things and following the Court of Appeal decision in Partner Re, it dismissed an argument that the Facultative Certificates were merely administrative in nature rather than having contractual effect.
The Court stated that parties who had agreed MRCs with an English law and jurisdiction clause but then agreed Facultative Certificates on the MURA form covering the same risk were to be taken as having agreed that the terms of the Facultative Certificate would supersede or replace the terms of the MRCs subject to any contractual terms providing that the terms of the MRCs were to have primacy.
As to the Confusion Clause, on its true construction, where there was any confusion as to the terms of the MRC and the terms of the Facultative Certificate, the intention was that the terms of the MRC should prevail.
In this case, there was confusion because the jurisdiction clause in the MRCs was irreconcilable with the arbitration provision in the Facultative Certificates. The two provisions could not be read together and to attempt to do so would deprive the jurisdiction clause of any purpose. The Court dismissed a proposed interpretation whereby disputes would be resolved in arbitration in New York, with the English Court exercising supervisory jurisdiction and the US courts having residual jurisdiction. It was highly unlikely that experienced insurance professionals would have agreed to this scenario. Rather, the parties were to be assumed to have agreed on a single tribunal for the determination of all their disputes.
The Court, therefore, dismissed the stay application and made the ASI permanent.
Comment
When entering into complex contractual arrangements such as those that prevailed in this case, it is important to ensure so far as possible that the dispute resolution provisions in the various agreements are aligned. Otherwise, expensive and time-consuming jurisdictional disputes may arise.
