Key takeaways
Conflicting jurisdiction provisions in single contract
The Court will try so far as possible to read these together and give effect to all the contractual clauses.
Conflicting jurisdiction provisions in separate contracts
Where these can’t be reconciled, the Court will decide which provision should take precedence.
Inconsistency or hierarchy clauses
Where incorporated into a contract, these can help to avoid disputes as to which provision should take precedence in the event of inconsistency.
Tyson International Company Ltd -v- GIC Re, India, Corporate Member Ltd [2026] EWCA Civ 40
We previously reported on the Commercial Court decision in a reinsurance dispute, in which the Court had to decide whether differing dispute resolution provisions in the relevant reinsurance agreements could be read together or whether they were in conflict. It decided that they were conflicting and that the English court jurisdiction clause took precedence over the New York arbitration provision: Jurisdiction Clause vs Arbitration Provision | Hill Dickinson
On appeal, the Court of Appeal has upheld that decision. The decision’s relevance is not limited to reinsurance contracts. It is of general interest because it makes it clear that ultimately, whether a later contract is intended to supersede an earlier one in its entirety, or to be read alongside the earlier one, and, if the latter, which is to prevail in the case of conflict between them, depends on the parties' intentions.
The Court of Appeal has also provided a timely reminder that if potentially conflicting dispute resolution provisions in separate documents cannot sensibly be read together, then the Court will not force the issue and will determine which provision the parties had intended should take precedence.
The background facts
On 5 June 2021, a Bermudan captive insurance company, Tyson International Company Ltd (TICL) provided insurance (Captive Policy) to its affiliate, Tyson Foods Inc, for various property and physical damage risks. TICL then entered into reinsurances with a number of reinsurers.
On 30 June 2021, GIC Re, India, Corporate Member Ltd (GIC), signed two reinsurance agreements on the Market Reform Contract (MRC) form reinsuring TICL. The agreements, variously referred to as 'reinsurance slips' or 'MRCs' contained a clause providing for English governing law and exclusive English jurisdiction.
On 9 July 2021 GIC agreed reinsurance agreements on the Market Uniform Reinsurance Agreement (MURA) form covering the same reinsurance. These agreements, referred to as 'Facultative Certificates' (the Certificates) were effectively an amendment or endorsement of the MRCs. The Certificates contained a New York arbitration clause and a clause providing for New York governing law. They also contained a 'Confusion Clause' which read: 'RI slip to take precedence over reinsurance certificate in case of confusion'.
It was common ground that the reference to 'RI slip' was to the relevant MRC, and that the reference to the 'reinsurance certificate' was to the Certificate itself.
When a claim arose under the Captive Policy, TICL accepted coverage and paid out on the claim. However, GIC subsequently refused to indemnify TICL in respect of the loss. It purported to rescind the reinsurance for alleged misrepresentation.
An issue arose as to whether the substantive dispute was to be referred to New York arbitration in accordance with the arbitration clause in the Certificates, or to the English Court in accordance with the English jurisdiction clause in the MRCs.
The Commercial Court held that the effect of the Confusion Clause was to give precedence to the terms of the MRCs in the event that there was confusion or inconsistency between the terms of the MRCs and the terms of the Certificates. The Commercial Court further found that there was such inconsistency, the two sets of provisions being irreconcilable, and hence that the jurisdiction clause in the MRCs prevailed over the arbitration agreement in the Certificates.
GIC appealed on the following grounds:
The Court was wrong in its construction of the Confusion Clause. It should have found that the Clause only applied if the relevant provision in the Certificates was uncertain in its meaning, which the New York arbitration agreement was not.
The Court was wrong in failing to conclude that the two clauses could be reconciled by giving priority to the later arbitration agreement and reading the English jurisdiction clause as giving the English Court auxiliary or supervisory jurisdiction over the New York arbitration.
The Court of Appeal decision
The Court of Appeal dismissed the appeal.
Construction of Confusion Clause
The Court of Appeal agreed with the lower court’s construction of the Confusion Clause.
The issue was the circumstances in which the Confusion Clause applied. Its entire purpose was to give precedence where it applied to the provisions found in one document (the RI slip or MRC) over those found in another (the Certificate). By its terms it applied 'in case of confusion'.
This was much more likely to refer to confusion as between the provisions in the two different documents (which was reconciled by giving precedence to the MRC provision) than confusion as between two provisions within one of the documents, in which case reference was made to the other document.
Most contracting parties would not think that their contracts contained contradictory or confusing provisions, particularly when they were based on widely used market forms. They would, therefore, be unlikely to provide for such a contingency. It was much more probable that they would provide for inconsistency between two different standard forms, one developed for use in the London market and one commonly used for property insurance in the United States.
As to the Entire Agreement Clause in the Certificate, while this meant that prima facie the Certificate superseded all previous agreements, this must be subject to the terms of the Certificate itself, including the Confusion Clause. This had the effect of bringing in the terms of the MRC in certain circumstances and to that extent the MRC was not superseded.
Can the dispute resolution clauses be reconciled?
The Court of Appeal distinguished between a scenario where:
an arbitration clause and an exclusive jurisdiction clause were found in the same document with no hierarchy or inconsistency clause; and
a case such as this one where the clauses were found in different documents agreed at different times and the parties had agreed a hierarchy clause.
The Court will make every effort to give effect to all the clauses in a single contract, even if it may need to read down an exclusive jurisdiction clause.
Where there are separate contracts with different provisions, the Court may be able to reconcile potentially inconsistent clauses even if there is an inconsistency clause. However, if the two provisions are in truth inconsistent and there is an inconsistency clause, it should apply that clause.
In this case, the NY arbitration provision in the Certificate was flatly inconsistent with what was agreed in the MRCs, and it would be equally inconsistent with the bargain that the parties had struck if the English law and jurisdiction clause were cut down to give the English Court only supervisory jurisdiction over the NY arbitration. The MRCs were the primary documents, the Certificates were the subordinate documents.
Comment
The Court of Appeal’s decision reaffirms the distinction, highlighted in many earlier authorities, between reconciling potentially inconsistent provisions in a single contract, as opposed to two or more contracts.
Those entering into contractual arrangements involving multiple contracts should take heed and endeavour to ensure that consistent dispute resolution provisions are incorporated into all relevant contractual documentation to avoid disputes of this nature and minimise the risk of fragmented proceedings.
