“Confusion Clause” as a Contractual Hierarchy: MRC Slip Prevails Over Later MURA Arbitration and Governing Law Terms Where the Two Documents Conflict

1. Introduction

This Court of Appeal decision concerns a familiar London-market structure where an agreement is first evidenced on a Market Reform Contract (“MRC”) slip and later followed by a Market Uniform Reinsurance Agreement (“MURA”) facultative certificate—yet the two documents contain incompatible dispute resolution provisions.

The appellant reinsurer, GIC Re, India, Corporate Member Ltd (“GIC”), had signed MRCs on 30 June 2021 reinsuring Tyson International Company Ltd (“TICL”), containing an English governing law clause and exclusive English jurisdiction. Days later (9 July 2021), GIC agreed MURA-form facultative certificates for the same risk and policy numbers. Those certificates contained a New York arbitration clause and New York governing law provisions, plus the clause at the heart of the appeal:

A loss occurred (a fire at Tyson Foods’ facility). GIC purported to rescind for alleged misrepresentation. The procedural question became whether the dispute belonged in New York arbitration (certificate) or the English courts (MRC), and whether TICL was entitled to anti-suit relief to restrain New York arbitration.

The key issues were:

• Construction: What does “in case of confusion” mean—internal ambiguity within the certificate, or inconsistency between slip and certificate?
• Reconciliation: If the clause gives the slip precedence, can the arbitration clause still survive by “reading down” the English jurisdiction clause to a merely supervisory/auxiliary role?

2. Summary of the Judgment

The Court of Appeal dismissed GIC’s appeal. It upheld the Commercial Court’s conclusion that:

• The Confusion Clause is a hierarchy / precedence provision addressing confusion arising between the MRC slip and the MURA certificate; and
• The MRC’s English exclusive jurisdiction clause and the certificate’s New York arbitration clause are irreconcilable in this context, so the MRC provisions prevail; and
• It is not legitimate to preserve the arbitration clause by recharacterising the English exclusive jurisdiction clause as merely supervisory—doing so would invert the contractual hierarchy the parties agreed.

Accordingly, the English court retained jurisdiction and the anti-suit injunction restraining New York arbitration stood.

3. Analysis

3.1 Precedents Cited

(A) The “Partner Re” litigation (context and contrast)

The judgment situates itself against the earlier parallel dispute:

• Tyson International Co Ltd v Partner Reinsurance Europe SE [2023] EWHC 3243 (Comm), [2024] Lloyd's Rep IR 279
• Tyson International Co Ltd v Partner Reinsurance Europe SE [2024] EWCA Civ 363, [2024] Lloyd's Rep IR 633 (“Partner Re (CA)”)

In Partner Re (CA), the absence of any clause making the earlier MRC prevail meant the later MURA certificate (with New York law/arbitration) was held to have superseded the MRC. The present appeal turns on the opposite fact pattern: there was express precedence wording (the Confusion Clause), so the logic of Partner Re (CA) did not dictate the result but helped frame the commercial background (MRC as London-market complete contract; MURA as US property reinsurance standard).

The Court of Appeal treated Partner Re (CA) as illustrating that, absent a hierarchy mechanism, a later MURA can replace an earlier MRC even if that seems commercially unusual. Here, the parties inserted a mechanism that pointed the other way.

(B) Contractual interpretation and “drafting could be better” arguments

The Court invoked European Film Bonds A/S v Lotus Holdings LLC [2021] EWCA Civ 807 to reject the submission that “confusion” is an odd word for inconsistency and that different wording would have been used if hierarchy was intended. The court’s task is to construe the words used, not rewrite them to what the parties “should” have said.

(C) Inconsistency clauses and the “cool and objective spirit” approach

The court relied on Pagnan SpA v Tradax Ocean Transportation SA [1987] 3 All ER 565 (“Pagnan”) in two ways:

• For the methodology: where parties include an inconsistency/hierarchy clause, the court should not presume inconsistency nor presume harmony; it must examine the documents “in a cool and objective spirit” to see if there is inconsistency and then apply the agreed hierarchy.
• For the definition of inconsistency: terms conflict where they cannot fairly be given effect together (used in the judgment to explain why some provisions may qualify rather than contradict others).

(D) Reconciling arbitration and jurisdiction clauses (single-document cases)

GIC relied on decisions where courts reconciled seemingly competing arbitration and jurisdiction provisions:

• Ace Capital Ltd v CMS Energy Corporation [2008] EWHC 1843 (Comm), [2009] Lloyd's Rep IR 414 (“ACE Capital”)
• Paul Smith v H & S International Holding Inc [1991] 2 Lloyd's Rep 127
• Shell International Petroleum Co Ltd v Coral Oil Co Ltd [1999] 1 Lloyd's Rep 72
• Sul América Cia Nacional de Seguros SA v Enesa Engenharia SA [2012] EWHC 42 (Comm), [2012] 1 Lloyd's Rep 275 (“Sul América”) (and the appeal at [2012] EWCA Civ 638, [2012] 1 Lloyd's Rep 671)

In ACE Capital and Sul América, the court “read down” the jurisdiction clause (e.g., service of suit / exclusive jurisdiction) so it did not negate the arbitration agreement, leaving it with residual utility (enforcement, compelling arbitration, etc.). The present court distinguished these as primarily single-document exercises without a hierarchy clause: the interpretive imperative to give effect to all clauses is strongest where a single instrument must be read as a whole and no contractual rule exists for resolving conflict.

(E) Multiple documents and amendments: preserving arbitration

GIC also relied on Surrey County Council v Suez Recycling and Recovery Surrey Ltd [2021] EWHC 2015 (TCC), [2021] BLR 625 (“Surrey”), where later variations and an inconsistency clause did not prevent an arbitration clause in the earlier agreement continuing to govern disputes. The Court of Appeal treated Surrey as materially different: it involved an amendment framework expressly preserving the original agreement “save as modified”, and the later deed modified the dispute clauses themselves—pointing towards continuity. By contrast, the MRC and certificates here were separate instruments with materially different dispute resolution bargains, and the hierarchy clause pointed to the MRC in the event of “confusion”.

(F) The “one-stop” forum presumption

The court referred to the policy impetus from Fiona Trust and Holding Corporation v Privalov [2007] UKHL 40, [2007] 4 All ER 951—the presumption that rational commercial parties intend a single tribunal to determine disputes arising out of their relationship. That presumption supported rejecting an interpretation that would leave parties with overlapping English court supervision and New York arbitral process (and potentially residual US court involvement).

(G) Market background: what an MRC is

In discussing the MRC’s purpose and completeness, the judgment drew on the background described in Partner Re (CA), including reference to AIG Europe SA v John Wood Group plc [2021] EWHC 2567 (Comm), [2022] Lloyd's Rep IR 485, explaining that the MRC was introduced to avoid the prior “slip then policy later” uncertainty by ensuring the contract is complete when subscribed.

3.2 Legal Reasoning

(A) Ground 1: “Confusion” means inter-document inconsistency, not internal ambiguity only

The court’s core move was to locate the Confusion Clause’s function in its structure: it identifies two documents (“RI slip” and “reinsurance certificate”) and assigns one precedence over the other. That linguistic architecture naturally fits confusion arising from differences between documents. The alternative reading (that “confusion” refers only to internal uncertainty within the certificate) was found strained because it requires importing limitations not expressed.

The court also stressed commercial rationality. Under GIC’s reading, the MRC would be treated as “superseded” in normal circumstances but would “spring back to life” as a tie-breaker only when the certificate is internally contradictory—potentially producing an outcome the certificate never contemplated (e.g., where the certificate offers A or B but the MRC supplies C). The court regarded this as an implausible commercial intention absent much clearer drafting.

(B) Dealing with “serpentine” drafting and “required terms”

GIC argued it was odd to use a MURA form containing “Required Terms and Conditions” (New York arbitration/law) if the parties intended English jurisdiction to govern. The court accepted the “oddity” at a general level, but held it did not answer the interpretive question because:

• the parties had previously used a similar two-document structure and expressly subordinated the certificate; and
• the “Entire Agreement” clause in the certificate cannot defeat an express precedence clause within the same certificate—on either party’s case, the Confusion Clause imports MRC terms in certain circumstances.

(C) Identifying whether provisions are truly inconsistent

Having construed the Confusion Clause as a hierarchy mechanism, the court then asked whether the competing dispute resolution clauses are “confusing” (i.e., in conflict) in the relevant sense. It held they are:

• MRC: English law + English courts have exclusive jurisdiction “on all matters relating to this Insurance”.
• Certificate: arbitration as a condition precedent; arbitration in New York; New York law to be applied.

These are mutually exclusive pathways for adjudicating the same dispute (avoidance/rescission for misrepresentation). The court rejected the attempt to treat the English exclusive jurisdiction clause as merely supervisory/auxiliary to New York arbitration, because doing so would effectively prioritise the certificate’s arbitration clause over the MRC—contrary to the hierarchy the parties chose.

(D) Ground 2: Reconciliation is not appropriate where a hierarchy clause allocates priority

The court distinguished the “reconcile both clauses” approach used in ACE Capital / Sul América. Where parties have provided a rule of priority (the Confusion Clause), the court’s task is not to dilute the senior clause to preserve the junior clause, but to:

1. assess inconsistency objectively (per Pagnan), and
2. apply the agreed priority if inconsistency exists.

Because the clauses were irreconcilable without inverting the agreed precedence, the court applied the hierarchy and upheld English jurisdiction.

3.3 Impact

(A) Drafting and placement practices in reinsurance

The decision gives concrete legal effect to a commonly encountered market phrase (“in case of confusion”) as a functional hierarchy clause. Parties using an MRC + MURA certificate structure should assume:

• “confusion” is apt to be read as confusion created by differences between documents, not merely ambiguity within one document; and
• a certificate’s “Entire Agreement” clause will not necessarily wipe out the MRC where the certificate itself contains a precedence clause referencing the slip.

(B) Forum risk: arbitration clauses can be displaced

Where a later certificate contains an arbitration clause but also includes a slip-precedence clause, parties face a real risk that the arbitration clause will not control, even if it appears “required” boilerplate. This is particularly significant in cross-border programmes where arbitration seats and governing laws differ, and where anti-suit injunctions are sought to police the agreed forum.

(C) Litigation strategy: anti-suit relief and jurisdiction challenges

Although the judgment’s focus is construction, its practical consequence is that English courts may grant and maintain anti-suit injunctions restraining foreign arbitration where the parties’ contractual hierarchy points to English court jurisdiction. Conversely, reinsurers seeking a stay under section 9 of the Arbitration Act 1996 will face difficulty where the arbitration clause is subordinated by a precedence provision.

(D) Relationship with Partner Re (CA)

The decision completes an emerging pattern in the Tyson-related disputes:

• Partner Re (CA): absent any slip-precedence wording, the later MURA arbitration clause superseded the earlier MRC jurisdiction clause.
• This case: where the certificate contains a slip-precedence clause, the earlier MRC jurisdiction clause prevails over the later MURA arbitration clause in case of conflict.

Together, they underline that outcomes in “two-document” placements will turn on whether the parties include an express priority mechanism (and on its wording).

4. Complex Concepts Simplified

• MRC (Market Reform Contract): A London-market contract format designed so the contract is complete when signed (“scratched”). It is not merely a preliminary slip; it can be the full contract.
• MURA (Market Uniform Reinsurance Agreement) / Facultative Certificate: A US-market style form used to evidence facultative reinsurance; commonly includes arbitration and New York law provisions.
• Hierarchy / precedence clause: A clause that ranks documents so that if they clash, one overrides the other.
• “Confusion” (here): Not a technical term of art; the court treated it as capturing the uncertainty created when two contractual documents provide different answers to the same question (e.g., court litigation vs arbitration).
• Exclusive jurisdiction clause: An agreement that only specified courts may hear disputes.
• Arbitration clause (condition precedent): A provision requiring arbitration before any court action can be brought.
• Supervisory jurisdiction (seat court): The courts of the arbitral seat supervise the arbitration (e.g., set-aside, procedural support). The rejected argument was that English courts could play that role despite New York arbitration.
• Anti-suit injunction: An order restraining a party from pursuing proceedings in another forum (including arbitration) contrary to a forum agreement.
• Section 9 Arbitration Act 1996 stay: The English court must generally stay proceedings brought in breach of an arbitration agreement—unless the arbitration agreement is not the governing dispute resolution mechanism on proper construction.

5. Conclusion

This judgment establishes that a clause stating “RI slip to take precedence over reinsurance certificate in case of confusion” will ordinarily be construed as a contractual hierarchy clause addressing inconsistency between the slip (MRC) and the certificate (MURA). Where the MRC contains an English exclusive jurisdiction clause and the certificate contains a New York arbitration clause, the two are treated as irreconcilable in substance; the hierarchy clause requires the MRC to prevail. The court will not preserve the arbitration clause by reinterpreting the “exclusive jurisdiction” promise into a thin supervisory role, because that would invert the priority bargain the parties chose.

In broader context, the decision—read alongside Partner Re (CA)—signals a clear, drafting-driven rule for two-document reinsurance placements: the forum will be determined not by which document is later in time, but by whether (and how) the parties have agreed an express priority mechanism allocating which document governs in case of conflict.