Tyson International Company Limited v Partner Reinsurance Europe SE

Whether a later contractual document supersedes an existing contract depends on an objective assessment of what the parties said and did. Their subjective intentions are irrelevant. Supersession may be express, including through an entire agreement clause, or arise by necessary implication where the later contract concerns the same subject matter and is fundamentally inconsistent with the earlier contract.

In deciding whether a document has contractual effect, the court considers its terms, the parties’ communications and conduct, and the relevant commercial context. An informal description such as “certificate” does not displace the document’s objective character. A contractual procedure governing changes agreed on behalf of subscribing underwriters does not necessarily restrict the parties’ ability to agree a bilateral replacement contract by another legally effective means.

The parties concluded a reinsurance contract on the London-market MRC form. It provided for English law and the exclusive jurisdiction of the English courts. Eight days later, the reinsurer signed a MURA document covering the same risks. That document contained New York law, New York arbitration and entire agreement clauses.

Following a disputed avoidance of the reinsurance, the reinsured began Commercial Court proceedings and the reinsurer commenced New York arbitration. Stephen Houseman KC held in [2023] EWHC 3243 (Comm) that the MURA had superseded the MRC. He stayed the English action under section 9 of the Arbitration Act 1996. He also indicated that delay would in any event have justified refusing the reinsured’s application to restrain the arbitration.

The appeal concerned whether the MURA superseded the MRC and, if it did not, whether an anti-arbitration injunction should have been granted.

1. Appeal dismissed. The parties’ intention was determined objectively from what they said and did. Their divergent subjective understandings were irrelevant. The parties contemplated the MURA from the outset; it was sent “for agreement”, signed and stamped on every page, and returned as requested. Its appearance, terms and commercial function demonstrated that it was intended to be a contract rather than an administrative certificate.

2. The MURA’s entire agreement clause expressly provided that it superseded all prior agreements concerning the same subject matter. That included the MRC, although the MRC was not individually identified. The absence of the endorsement used in the previous policy year to subordinate the MURA to the MRC, together with deliberate changes concerning service and premium payment, reinforced that conclusion.

3. The parties’ descriptions of the documents as a “certificate” and a “slip” did not determine their legal character. Nor did business common sense point decisively away from supersession. It was established insurance-market practice that an initially binding contract could later be superseded by a formal policy, as discussed in AIG Europe SA v John Wood Group Plc [2021] EWHC 2567 (Comm) and HIH Casualty & General Insurance Ltd v New Hampshire Insurance Co [2001] EWCA Civ 735.

4. The General Underwriters Agreement procedure incorporated into the MRC did not restrict the parties’ ability to agree a contract change by any legally effective means. It governed the authority and procedure for binding following underwriters. There was no following market here. The MURA therefore superseded the MRC expressly or, alternatively, by necessary implication because it covered the same subject matter and was fundamentally inconsistent with the earlier contract. The New York arbitration agreement was binding, so the English action was properly stayed under section 9 of the Arbitration Act 1996.

5. Obiter: Had the MRC remained operative, the judge’s treatment of the requested anti-arbitration injunction would have omitted a material consideration. Refusing relief would have allowed parallel English litigation and New York arbitration, producing duplicated expense, a race to judgment and a real risk of conflicting decisions. Although the reinsured had delayed for several months, the arbitration remained at an early stage and the jurisdictional objection was understood. Those consequences substantially outweighed the delay, and the injunction would have been granted.

1. Court of Appeal (Civil Division): The appeal was dismissed. The court upheld the stay of the English proceedings, while declining to endorse the High Court’s alternative conclusion concerning the anti-arbitration injunction.
2. High Court, Commercial Court: In [2023] EWHC 3243 (Comm), Stephen Houseman KC held that the MURA superseded the MRC and stayed the English action under section 9 of the Arbitration Act 1996. He indicated that he would alternatively have refused an anti-arbitration injunction because of delay.