Authored by Donald Dinnie and Atish Dullabh.
In February 2026, the UK Court of Appeal held that where two reinsurance agreements cover the same risk but provide for different dispute resolution forums, a clause stipulating which reinsurance agreement is to prevail will be given effect. The earlier agreement, which provided for English jurisdiction, prevailed over the later agreement, which provided for New York arbitration, because the later agreement contained a clause giving priority to the earlier one. The two competing provisions could not be read together nor reconciled.
The claimant insurer and the defendant reinsurer concluded reinsurance agreements, referred to as the “reinsurance slips”, in terms of the Market Reform Contract form providing for English governing law and exclusive English jurisdiction. The parties subsequently concluded facultative reinsurance certificates in terms of the Market Uniform Reinsurance Agreement form covering the same risk, which provided for New York governing law and arbitration in New York. The reinsurance certificates were agreed subject to three amendments, one of which provided a ‘confusion clause’ stating: “RI slip to take precedence over reinsurance certificate in case of confusion”.
Following a fire at an insured poultry rendering plant, the claimant insurer indemnified the insured and sought indemnification from the defendant reinsurer. The reinsurer declined to indemnify the insurer and later sought cancellation of the reinsurance agreements, alleging that property values had been understated. The insurer brought proceedings in England, while the reinsurer sought to pursue arbitration in New York.
The legal issue was whether the dispute was to be resolved by the English courts in terms of the reinsurance slips or by arbitration in New York in terms of the reinsurance certificates.
On the wording of the confusion clause, the court held that it operated as a hierarchy clause. The clause was to be read from the perspective of a reasonable insurer or broker, not a pedantic lawyer. The reference to “confusion” was not limited to internal inconsistency within a single document but was intended to address inconsistency between the two contractual documents. The phrase “take precedence over” imported a comparison between the two documents. The alternative construction, limiting the clause to confusion within the reinsurance certificates alone, was rejected as commercially improbable: contracting parties would not ordinarily make provision for the unlikely event that a reinsurance certificate based on a widely used standard form would be internally contradictory, whereas two standard forms developed for different markets were likely to differ in their detail.
The court also rejected the argument that the competing clauses could be reconciled by treating the English courts as having a supervisory role over the New York arbitration. The court found the two provisions to be irreconcilable and held that reading down the English jurisdiction clause would fundamentally change its meaning and the parties’ agreement.
The appeal court held that the English courts were the agreed forum and granted a permanent anti-suit injunction (an order restraining a party from pursuing proceedings in another forum). This outcome was contrasted with a related dispute involving the same insurer and a different reinsurer on the same risk, where the later certificate contained no hierarchy clause and the later document was held to prevail.
For South African insurers and reinsurers, the decision reaffirms the importance of careful drafting where more than one contractual document records the terms of a reinsurance arrangement. Certainty about which document prevails will depend on the wording used and, in some cases, evidence of market practice. Parties should consider whether later documents are intended to supplement or replace earlier agreements and should ensure that governing law and dispute resolution provisions are aligned.
Tyson International Company Ltd v GIC Re, India, Corporate Member Ltd [2026] EWCA Civ 40