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Court of Appeal upholds stay of English proceedings

15th Apr 2024

The Court of Appeal has handed down judgment in Tyson International Company Limited v Partner Reinsurance Europe SE [2024] EWCA Civ 363, upholding the first-instance judge’s decision to order a stay under s.9 of the Arbitration Act 1996 of proceedings commenced in England by the appellant, Tyson International Company Ltd (“TICL”).

The dispute arose out of TICL’s claim under a reinsurance policy underwritten by the respondent, Partner Reinsurance Europe SE. The parties had agreed two contractual documents. The first, concluded on 30 June 2021, was based on the Market Reform Contract used in the London market and contained an English law and jurisdiction clause (the “MRC”). The second, concluded on 8 July 2021, was based on the Market Uniform Reinsurance Agreement used in the US market and provided for New York law and arbitration (the “MURA”).

In a judgment handed down on 15 April 2024, the Court of Appeal upheld the judge’s decision that the parties had agreed to replace the English jurisdiction clause in the MRC with the arbitration agreement in the MURA. The Court of Appeal rejected TICL’s arguments that the MURA was ineffective or subordinate to the MRC, including an argument that the parties had failed to comply with the contract change provisions in the MRC. The Court of Appeal held that the contract change provisions were not applicable: the General Underwriters Agreement, incorporated in the MRC, concerned only the procedure by which a following market would be notified of and bound by contract changes and did not restrict the ability of parties to a bilateral contract, with no following market, to alter its terms. In addition, the Court of Appeal expressed doubt as to whether the Supreme Court’s decision in MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2018] UKSC 24 means that strict compliance with contractual formality requirements is always necessary in order for a contractual amendment to take effect. In the circumstances, the MRC was replaced by the MURA as the contractual document, either by way of its express terms or applying the principle of implied rescission (cf. Frangou v Frangos [2023] EWCA Civ 1320 at [98]).

James Brocklebank KC and Douglas Grant acted for the successful respondent, instructed by Adrian Mecz and Rahul Mansigani of Norton Rose Fulbright LLP.

To view a copy of the judgment please click here.