Tyson International Company Ltd v GIC Re, India, Corporate Member Ltd (sued as the sole corporate member for Syndicate 1947 at Lloyd's of London for the 2021 and 2022 years of account)

Hearing dates: 18 July 2024

Approved Judgment

This judgment was handed down remotely at 10:30am on 21 st January 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Mr Nigel Cooper KC:

In this judgment, the Claimant is referred to as “TICL” and the Defendant as “GIC”.

On 23 October 2023, the Claimant applied without notice for an interim anti-suit injunction (or more accurately anti-arbitration injunction), which was granted by Foxton J. on the same day. The Defendant subsequently applied by an application notice dated 30 October 2023 to set aside the interim anti-suit injunction (“the Set Aside Application”). The Claimant applied 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 might be brought by the Defendant) (“the ASI Application”). The two applications came before Mr. Christopher Hancock KC sitting as a High Court Judge on 06 December 2023 for a one day hearing. For reasons set out in a reserved judgment dated 07 February 2024, Mr. Hancock KC continued the interim anti-suit injunction pending any application to be made by GIC challenging the jurisdiction of the English court, including any application made under s.9 of the Arbitration Act 1996 (“the AA 1996”). He also set a timetable for the submission of any further evidence by the parties.

By an application notice dated 06 March 2024 (“the Stay Application”), GIC applied pursuant to CPR Rule 11 and/or Rule 62.8 and/or section 9 of the AA 1996 for the court:

i) To determine that it has no jurisdiction to try TICL's claim and/or that the court should not exercise its jurisdiction;

ii) To set aside the Claim Form dated 20 October 2023;

iii) To stay the proceedings pursuant to s.9 of the Arbitration Act 1996;

iv) To make consequential orders.

By an application notice dated 21 May 2024 (“the Final ASI Application”), TICL applied for permanent (alternatively continued) anti-suit relief and related orders.

I will refer to the Stay Application and the Final ASI Application collectively as “the Applications”.

Evidence

For the purposes of the Applications, I had witness evidence before me as follows:

i) The Fourth Witness Statement of Ms. Victoria Sherratt, a partner in RPC, dated 06 March 2024 served on behalf of GIC together with the exhibit thereto;

ii) The Fourth Witness Statement of Mr. Leslie Pring, a partner in Reed Smith LLP, dated 21 May 2024 served on behalf of TCIL together with the exhibit thereto; and

iii) The First Witness Statement of Ms. Rebecca Carrera, of Counsel with RPC, dated 14 June 2024 together with the exhibit thereto.

Neither party sought to cross-examine the witnesses of fact.

I had expert evidence on market practice from:

i) Mr. Richard Cook on behalf of GIC, whose evidence was set out in a report dated 06 March 2024 and a supplementary report dated 14 June 2024.

ii) Ms. Susan Taylor on behalf of TICL, whose evidence was found in a report dated 21 May 2024.

Neither party sought to cross-examine the other party's expert.

I deal further with the relevance and effect of the expert evidence in paragraphs 71 to 74 below. However, while I am grateful to both experts for the work they have done, neither party placed any significant reliance on expert evidence in their submissions before me and I consider that they were correct not to do so.

Relevant Background

The account of the facts below is principally taken from paragraphs 3 to 23 of the judgment of Mr. Hancock KC updated to take account of the additional evidence put before me and events since the hearing before him.

The Parties

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, USA.

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 or damage to property” situated in the US or Puerto Rico for the period 01 July 2021 to 01 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 for Tyson Foods, including for the period 01 July 2021 to 01 July 2022. GIC had also been a subscribing reinsurer with TICL the previous policy year (01 July 2020 to 01 July 2021).

GIC is a limited company registered in England and Wales with company no. 07792458. 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.

The policies of reinsurance

GIC issued two “All Risks of Direct Physical Loss or Damage” reinsurance policies to TICL with policy numbers PRPNA2104091 and PRPNA104667 for the period 01 July 2021 to 01 July 2022 (together “the Reinsurance”). GIC underwrote 10% on each of two different layers of reinsurance; one being for US$25 million excess of US$175 million and the other being for US$75 million excess of US$225 million.

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 the GIC reinsurance premium was based. GIC claims that by a letter dated 03 November 2022, it rescinded and avoided the Reinsurance ab initio on the basis of that misrepresentation. It is this dispute which will be determined either before this court under English law or by arbitration seated in New York subject to New York law. I am, of course, not concerned with the merits of this underlying dispute when it comes to deciding the Applications.

Policy documents PRPNA2104091 and PRPNA2104667 were both signed by GIC on 30 June 2021. During the hearing, the documents which were signed by GIC on 30 June 2021 were referred to as ‘slips’ or as ‘MRC’(s) (standing for “Market Reform Contracts”). I shall refer to the documents hereafter as ‘MRC’(s) principally because I think this expression most accurately reflects the form of the documents in question.

Both MRCs contained identical choice of law and jurisdiction provisions (“the Jurisdiction Clause”) 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 MRCs contained brief details of the risk, a list of clauses used in the Captive Policy (as well as attaching those clauses) and provisions applicable to the excess nature of the reinsurance. The MRCs were described in the footer under the security details as “Market Submission – Security Details”. The 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)”. The same clause went on:

“Wherever practicable, between the broker and each (re)insurer which have at any time the ability to send and receive ACORD messages:

1. the broker agrees that any proposed contract change will be requested via an ‘ACORD’ message or using an ACORD enabled electronic trading platform;

2. whilst the parties may negotiate and agree any contract change in any legally effective manner, each relevant (re)insurer agrees to respond via an appropriate ‘ACORD message’ or using an ACORD enabled electronic trading platform;

…”

Under the Conditions section, the MRCs incorporate the Beazley Policy Wording, defined as policy number PRPNA2103094 (see further paragraph 37 below). The effect of incorporating the Beazley Policy was also to incorporate the Captive Policy as amended by an endorsement known as the General Change Endorsement (an endorsement, which inter alia, amended the cancellation provisions in the Captive Policy as incorporated into the Beazley Policy).

The MRCs included (i) a Property Cyber and Data Endorsement excluding cover for certain cyber and data risks, (ii) a Sanctions Limitation and Exclusion Clause protecting reinsurers from certain sanctions risks and (iii) a Communicable Disease Endorsement excluding cover for certain risks associated with communicable diseases.

It was further a condition of the MRCs that premium due at inception had to be paid and received by reinsurers on or before midnight on 28 September 2021.

Subsequently, after GIC had signed the two MRCs, a document called a Facultative Certificate was...