In Tyson International Company Ltd v Partner Reinsurance Europe SE [2024] EWCA Civ 363, parties to a reinsurance contract (a Market Reform Contact – MRC) and a subsequent agreement (a Market Uniform Reinsurance Agreement – MURA) fell into disagreement over whether Partner Reinsurance had provided cover to Tyson International. Making matters worse, the parties could also not agree on where and how the disagreement was to be resolved.
The misalignment stemmed from the fact that the MURA, entered into by the parties a week after the MRC, contained a clause directing that arbitration occur in New York subject to New York law. The original contract had provided for arbitration in London, subject to English law.
Tyson International, the appellant, argued that the MURA was not meant to replace the MRC. Partner Reinsurance argued that it was, and consequently, the underlying dispute about cover should be heard by arbitrators in New York.
The Court first noted that there was no doubt the second agreement was valid. The question, rather, was whether the parties had intended it to supersede the original or merely vary it.
The Court found several factors clear:
- The parties were familiar with the terms and nature of the MURA. It was clear on its face what it was intended for. As a result, they would have known that New York would be the natural place of dispute resolution.
- The parties had used language indicating that they knew they were entering into a contractual arrangement rather than simply signing off on an administrative task.
- Partner Reinsurance signed and stamped every page of the MURA.
- The MURA contained a clause stating that the agreement would supersede all contemporaneous or prior agreements and understandings, both written and oral.
- Unlike in previous reinsurance agreements between the two, there was no statement in the agreement establishing that the MURA was subject to the MRC.
In the Court’s view, the above factors suggested the document looked like a contract generally but also contained the key components of a valid and binding contract of reinsurance. Invoking the proverbial duck, if it looked like a reinsurance contract, then it likely was one.
Tyson responded that the arrangement lacked business common sense. The Court accepted that this absence was a considerable factor. However, this was not a situation where either outcome contained business common sense. Agreeing to one jurisdiction so soon after agreeing to another lacked business common sense. Yet, it was equally absent if both parties had intended to agree to English law when Partner Reinsurance was proposing New York law.
The Court found in favour of Partner Reinsurance.
