Tyson International Company Ltd v GIC Re, India, Corporate Member Ltd
| Jurisdiction | England & Wales |
| Judge | Christopher Hancock |
| Judgment Date | 07 February 2024 |
| Neutral Citation | [2024] EWHC 236 (Comm) |
| Year | 2024 |
| Court | King's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2023-000760 |
[2024] EWHC 236 (Comm)
Christopher Hancock KC
SITTING AS A JUDGE OF THE HIGH COURT
Case No: CL-2023-000760
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Timothy Killen and Benjamin Phelps (instructed by Reed Smith) for the Claimant
Peter MacDonald Eggers KC and Tim Jenns (instructed by RPC) for the Defendant
Hearing dates: 6 December 2023
Approved Judgment
This judgment was handed down by the Judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 10:00 on Wednesday 7 th February 2024.
Christopher Hancock KC:
I INTRODUCTION.
On 23 October 2023 the Claimant applied ex parte for an interim anti-suit injunction, which was granted by Foxton J on the same day. The Defendant now applies (by an application notice dated 30 October 2023) to set aside the interim anti-suit injunction. The Claimant applies (by an application notice dated 17 November 2023) to make the interim anti-suit relief final (or in the alternative, to continue the interim anti-suit injunction pending the result of any jurisdiction challenge that may be brought by the Defendant).
In this judgment the Claimant is referred to as “ TICL”, and the Defendant as “ GIC”.
II RELEVANT BACKGROUND.
Tyson Foods Inc (“ Tyson Foods”) is a multi-national company operating in the food industry. Its activities include the processing, sale and marketing of chicken, beef, and pork products. It is a company registered in Arkansas, US.
TICL is the captive insurer of Tyson Foods. TICL is incorporated and registered in Bermuda. Tyson Foods owns a large property portfolio and insured its property risks with TICL pursuant to a policy of insurance (“ the Captive Policy”). The insurance provided by TICL was against “ all risks of direct physical loss of or damage to property” situated in the US or Puerto Rico for the period 1 July 2021 to 1 July 2022. The Captive Policy was governed by Arkansas law and was subject to a US service of suit clause.
TICL in turn reinsured the property risks on a facultative basis with various reinsurers. GIC is a subscribing reinsurer to two layers of TICL's property insurance of Tyson Foods, including for the period 1 July 2021 to 1 July 2022. GIC had also been a subscribing reinsurer with TICL the previous policy year (1 July 2020 to 1 July 2021).
GIC is a limited company registered in England and Wales with company number 07792458 and a registered address at 40 Lime Street, 3rd Floor, London, United Kingdom, EC3M 7AW. GIC operates (and for the 2021 and 2022 years of account did operate) as the sole corporate member for Lloyd's of London Syndicate 1947 and carries (and carried) on business including as an underwriter of reinsurance.
GIC issued two “All Risks of Direct Physical Loss or Damage” reinsurance policies to TICL with policy numbers PRPNA2104091 and PRPNA2104667 for the period 1 July 2021 to 1 July 2022 (together “ the Reinsurance”). GIC underwrote 10% on each of the two layers, one being for $25m excess of $175m and the other being for $75m excess of $225m.
GIC claims, but TICL denies, that on the renewal of the Reinsurance for 2021/2022, TICL misrepresented the values of the Hanceville Facility to GIC by the submission of a significantly understated statement of value, upon which GIC's reinsurance premium was based. By reason of that misrepresentation, by letter dated 3 November 2022 GIC claims to have rescinded and avoided the Reinsurance ab initio.
PRPNA2104091 and PRPNA2104667 were both signed by GIC on 30 June 2021. In submissions the parties referred to these documents in different ways, variously describing them as “Slip Policy/Policies, MRC(s) (which stands for “Market Reform Contract”), Slip(s), or Reinsurance Slip(s)”, this Judgment refers to these documents as “the Slip Policies/MRCs”. Both PRPNA2104091 and PRPNA2104667, when signed, contained identical choice of law and jurisdiction provisions in the following terms:
“This Reinsurance shall be governed by and construed according to the Laws of England and Wales. The Courts of England and Wales shall have exclusive jurisdiction of the parties hereto on all matters relating to this insurance.”
The Slip Policies/MRCs contained brief details of the risk, a list of the clauses used in the Captive Policy (as well as attaching those clauses), and provisions applicable to the excess nature of the reinsurances. The Slip Policies/MRCs were described in the footer under the security details as “ Market Submission – Security Details”. The Slip Policies/MRCs included a subscription agreement which provided “ Basis of Agreement to Contract Changes: All changes to be managed and agreed in accordance with the General Underwriters Agreement (version 2.0) February 2014 and the GUA Non-Marine Schedule (October 2001)”.
After GIC signed PRPNA2104091 and PRPNA2104667 a document called a Facultative Certificate was issued in respect of each Slip Policy/MRC. The Facultative Certificates were agreed by GIC on 9 July 2021. In submissions the parties also referred to these documents in different ways, variously describing them as “Certificate(s), Reinsurance Certificate(s), Facultative (Reinsurance) Certificate(s), Reinsurance Agreement(s) or the “MURA” (which stands for the “Market Uniform Reinsurance Agreement”). This Judgment refers to these documents as the “Facultative Certificate(s)”. These Facultative Certificates include the same agreement numbers as the Slip Policies/MRCs. They also provided as follows:
(1) The documents are headed, and “ Agreement” is defined as, “ Agreement of Facultative Reinsurance (the “Agreement”)”. The Faculative Certificates comprise a section headed “ Declarations” and a section headed “ Terms and Conditions”.
(2) Page 1 under the Declarations includes a provision “ Reinsurances have made the following amendments to this Reinsurance Certificate:—… 2) RI slip to take precedence over reinsurance certificate in case of confusion”.
(3) Clause 2 of the Terms and Conditions contains the reinsurance provision stipulating that the basis of cover is as set out in the Reinsurance Agreement:
“2. Reinsurance Agreement
In consideration of the payment of the premium and subject to the terms, conditions and limits of liability set forth in this Agreement, in the Declarations and any endorsements made a part of this Agreement, the Reinsurer does hereby reinsure the Company [TICL] …”
(4) Clause 13 of the Terms and Conditions headed “ Arbitration” contains a detailed arbitration agreement in eight sub-paragraphs including:
“13. Arbitration
a. As a condition precedent to any right of action hereunder, any dispute arising out of the interpretation, performance or breach of this Agreement, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators. Notice requesting arbitration will be in writing and sent certified or registered mail, return receipt requested. …
f. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence. Unless the panel agrees otherwise, arbitration shall take place in New York, but the venue may be changed when deemed by the panel to be in the best interest of the arbitration proceeding. Insofar as the arbitration panel looks to substantive law, it shall follow the law of New York in accordance with the dictates of the Governing Law Clause. The decision of any two arbitrators when rendered in writing shall be final and binding. The panel is empowered to grant interim relief as it may deem appropriate.”
(5) The reference to the “ Governing Law Clause” in Clause 13(f) is to Clause 17 which provided:
“17. Governing Law and Jurisdiction
Insofar as the panel looks to the law of a jurisdiction as governing law, it will apply the substantive law of the State of New York without reference to that state's choice or conflict of laws rules; provided, however, that the substantive law of the State of New York shall not be used to supplant or override underlying court or other judicial body final decisions concerning the claim(s) at issue.”
(6) Clause 19 is headed “ Service of Suit” and sets out a non-exclusive jurisdiction clause in favour of any court of competent jurisdiction within the United States, and stipulates that service may be made on the New York firm Mendes & Mount (as stated in the Declarations). Clause 19 applies to reinsurers (such as GIC) which are not domiciled or authorised in the United States. Clause 19 is expressly made subject to Clause 13 (arbitration): “ The foregoing is not intended to conflict with or override the obligation of the Parties hereto to arbitrate their disputes as provided in the Arbitration Clause”.
(7) Clause 26 contains an entire agreement clause in these terms:
“26. Entire Agreement
This Agreement, including any duly executed written amendments and endorsements thereto, and appendices, schedules or other attachments made part thereof or expressly incorporated by reference, and the Policy and any written endorsements, modifications, alterations and cancellations thereto, and waivers and interpretations thereto but only with respect to the claim in dispute, all as permitted under Reinsurance Agreement Clause 2 and Reinsurance Accepted Clause 3, shall constitute the entire agreement between the Parties and shall supersede all contemporaneous or prior agreements and understandings, both written and oral, between the Parties with respect...
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