# Opinion

> District Court, S.D. New York · March 31, 2026

URL: https://www.frixlaw.com/law-library/cases/11387661

## Case

- **Full name:** Tyson International Company, Limited v. Partner Reinsurance Europe SE
- **Court:** District Court, S.D. New York
- **Decided:** March 31, 2026
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
TYSON INTERNATIONAL COMPANY,
LIMITED,
Petitioner,
1:25-cv-03452 (ALC)

-against-
OPINION & ORDER
PARTNER REINSURANCE EUROPE SE,
Respondent.

ANDREW L. CARTER, JR., United States District Judge:
Petitioner Tyson International Company, Limited (“TICL”) brought this action to vacate
part of the arbitration award entered in its favor against Respondent Partner Reinsurance Europe
SE (“PartnerRe”), or, in the alternative, to vacate the entire award and remand this matter to the
Panel for further proceedings. 1 See Tyson Int’l Co., Ltd. v. Partner Reinsurance Europe SE, No.
0F
1:25-mc-00167 (S.D.N.Y. April 18, 2025), Dkt. No. 1, Exhibit 6. Respondent filed a cross-
motion to confirm the arbitration award. Dkt. Nos. 20, 21. For the reasons that follow,
Petitioner’s motion is DENIED; Respondent’s cross-motion to confirm is GRANTED,
BACKGROUND
Petitioner TICL is a wholly-owned captive insurer of Tyson Foods Inc. and its family of
companies throughout the United States (“Tyson”). Dkt. No. 16-1, Pet. to Vacate Portion of
Arbitration Award (“Pet.”) ¶ 3. Tyson conducts business in the processing, sale, and marketing
of chicken, beef, and pork products. Id. Respondent PartnerRe provided reinsurance coverage as
a part of Tyson’s 2021-2022 captive insurance program, a program through which TICL

1 On August 18, 2025, TICL filed a letter requesting oral argument on the cross motions. Dkt. No. 39. The
petitions are fully briefed, and the Court can decide petitions on the papers submitted by the Parties. The
request for oral argument is thus DENIED.
purchased about 75 reinsurance policies from various reinsurance companies. Id. at ¶¶ 27–28.
Among the 75 policies was a reinsurance certificate from PartnerRe (the “PartnerRe Contract”).
On July 30, 2021, one of Tyson’s poultry rendering facilities, located in Hanceville,
Alabama (“Hanceville Facility”) incurred damage to one of its two main plants due to a fire (the

“Fire”). Id. at ¶¶ 52, 60. A subsequent review revealed the property was undervalued on the
policy due to a misidentification of the asset’s age, affecting the facility’s replacement cost. Id. at
¶¶ 54–56. TICL maintains that this miscalculation was inadvertently caused by Tyson’s Property
Accounting Team when they registered the “in service date” as 2018, when the property was
acquired, instead of its construction date from decades earlier. Id. The total insured value
(“TIV”) of the Hanceville Facility had been placed at $72 million, but the net loss resulting from
the Fire was estimated to be between $306 million to $493 million. Id. at ¶¶ 62–63. The Contract
includes an “Unintentional Errors and Omissions” clause that bars invalidation of the agreement
for inadvertent valuation errors. Id. at ¶ 65; Ex B at § 14.
PartnerRe sought to rescind its reinsurance contract with TICL. Id. at ¶ 70. On May 4,

2023, PartnerRe filed a demand for arbitration against TICL. Id. at ¶ 71; ECF No. 23 at 7. At the
arbitration hearing, TICL sought an award of $22.5 million from PartnerRe for their share in the
reinsurance agreement. Id. at ¶ 78. The majority of the arbitration Panel ultimately decided that
PartnerRe was not entitled to recission and awarded TICL $1.62 million (“the Award”). Id. at 83.
The Award was issued on January 17, 2025. Id. at 70; ECF No. 21 at 8. TICL argues that the
Award of $1.62 million was tantamount to granting PartnerRe recission of the Contract, as it was
a fraction of the $22.5 million TICL sought to recover. Id. at 83–85. The arbitration Panel
identified TICL’s misclassification of the property’s value not as an “error,” but the “result of
poor strategic business decisions.” Id. at 93 (brackets omitted). Petitioner argues that this
determination was in manifest disregard of the Contract provisions and New York law, and
criticized the “ambiguity” of the Panel’s calculations to reach $1.62 million. Id. at 97, 99.
Petitioner has brought this action asserting that the arbitral Panel manifestly disregarded
the Parties’ written agreements and New York law. Petitioner moves to vacate the award on that

basis, or, in the alternative, to vacate the entire award and remand to the Panel for further
proceedings. Respondent opposes Petitioner’s motion to vacate and has filed a cross-motion
requesting confirmation of the Award.
This Court has jurisdiction under 28 U.S.C. § 1332.
LEGAL STANDARD
I: Standard for Motion to Vacate Arbitration Award
“It is well established that courts must grant an arbitration Panel’s decision great
deference.” Duferco Int’l Steel Trading v. T. Klaveness Shipping A/S, 333 F.3d 383, 388 (2d Cir.
2003); see also Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Tr., 729 F.3d 99,
103 (2d Cir. 2013). The Federal Arbitration Act (“FAA”) creates a “strong presumption in favor

of enforcing arbitration awards.” EB Safe, LLC v. Hurley, 832 F. App'x 705, 707 (2d Cir. 2020).
Thus, a party seeking to vacate an arbitration award must meet a high burden of proof. Kolel, 729
F.3d at 102; see also Tully Constr. Co. v. Canam Steel Corp., 684 F. App'x 24, 26 (2d Cir. 2017).
The FAA “only allows for vacatur in four circumstances: (1) the arbitral award ‘was procured by
corruption, fraud, or undue means;’ (2) ‘there was evident partiality or corruption in the
arbitrators;’ (3) ‘the arbitrators were guilty of misconduct ... by which the rights of any party
have been prejudiced;’ (4) ‘the arbitrators exceeded their powers, or so imperfectly executed
them that a mutual, final, and definite award upon the subject matter submitted was not made.’”
EB Safe, LLC v. Hurley, 2018 U.S. Dist. LEXIS 82034, *5 (S.D.N.Y. May 15, 2018) (citing 9
U.S.C. § 10(a)).
In addition to the four statutory bases for vacatur, the Second Circuit has held that vacatur
may also be granted if “an arbitral award that exhibits a ‘manifest disregard of law.’” Duferco,

333 F.3d at 388 (citing Goldman v. Architectural Iron. Co., 306 F.3d 1214, 1216 (2d Cir. 2002));
Westerbeke Corp. v. Daihatsu Motor Co., 304 F.3d 200, 208 (2d Cir. 2002) (same). Review
under the manifest disregard standard is “highly deferential” to the arbitrators, and relief on such
a claim is therefore “rare.” STMicroelectronics, N. V. v. Credit Suisse Sec. (USA) LLC, 648 F.3d
68, 78 (2d Cir. 2011) (citing Porzig v. Dresdner, Kleinwort, Benson, N. Am. LLC, 497 F.3d 133,
138 (2d Cir. 2007)). A court can vacate an arbitral award for manifest disregard of the law only if
(1) “the governing law alleged to have been ignored by the arbitrators was well defined, explicit,
and clearly applicable,” and (2) “the arbitrator knew about the existence of a clearly governing
legal principle but decided to ignore it or pay no attention to it.” Jock v. Sterling Jewelers Inc.,
646 F.3d 113, 122 (2d Cir. 2011) (internal quotations omitted); Wallace v. Buttar, 378 F.3d 182,

189 (2d Cir. 2004). “It is well-established that the ‘manifest disregard’ doctrine is one of ‘last
resort’ and is limited ‘only to those exceedingly rare instances where some egregious
impropriety on the part of the arbitrator is apparent.’” J&J Empire Express, Inc. v. FedEx
Ground Package Sys., Inc., 2025 U.S. Dist. LEXIS 67676, *5 (S.D.N.Y. April 9, 2025) (citing
Jefferies LLC v. Gegenheimer, 849 F. App'x 16, 17 (2d Cir. 2021) (quoting Duferco, 333 F.3d at
389)). Given the strong deference to arbitration outcomes, manifest disregard requires a showing
beyond “a mistake of law or a clear error in fact finding.” EB Safe, LLC, 832 F. App'x at 707.
DISCUSSION
I. TICL’s Arguments in Support of Vacatur
As discussed in greater detail below, Petitioner fails to allege a statutory basis for vacatur.
Therefore, the Petitioner’s Motion must DENIED.

Petitioner sets forth two main arguments for vacatur: (1) that the panel exhibited a manifest
disregard of the law, and/or (2) that the Panel exceeded its authority. Both arguments fail.
In support of its manifest disregard of the law argument, Petitioner argues that in manifest
disregard of the law, the arbitration Panel effectively granted PartnerRe recission of the Contract
by granting Petitioner an award of $1.62 million rather than the $22.5 million it sought. Dkt. No.
16-2, Pet. Memo of Law in Sup. of Pet. To Vacate at 21. Petitioner further asserts that the Award
should be vacated because the Panel acted with manifest disregard of New York law.
Specifically, the Panel disregarded New York’s scienter requirement for recission, and also
disregarded New York’s plain language requirement for interpreting the Unintentional Errors &
Omissions Clause within the Contract. Id. at 20–21. The Court disagrees.

As it relates to TICL’s alleged miscalculation, the Panel held that the miscalculation, while
material, was not intentional, nor the result of fraud. Id. at 20; Dkt. No. 16-3. The Panel further
concluded that the incorrect valuation was caused by “methodology that was at least negligent, if
not grossly negligent or reckless.” Id.; Dkt. No. 16-3 at 5. Despite this, TICL argues that, since
the Unintentional Errors & Omissions Clause excuses “any unintentional or inadvertent
omission, error, [or] incorrect valuation…,” the Panel unjustly punished the Petitioner by
awarding an amount so low as to effectively grant PartnerRe recission of the Contract. Id. at 21.
Petitioner contends that, in doing so, the Panel exceeded its powers by modifying the “clear and
unambiguous contractual language” in the Contract, which resulted in the Panel delivering its
“own brand of industrial justice.” Id. at 24.
In support of its argument that the Panel exceeded its authority, Petitioner alleges that the
Panel effectively rewrote the parties’ agreement by adding an average or co-insurance clause to

impose penalties on the policyholder for the undervaluation of property, despite the Contract
containing no such provision. Id. at 25. Petitioner thus asks the Court to vacate the award, or
remand for further proceedings to clarify the alleged ambiguity regarding the award amount. Id.
at 27–28.
II. PartnerRe’s Arguments In Support of Confirmation of the Arbitration Award
Respondent argues that the Panel was not bound by New York law, but instead industry
custom and practice, which the Panel applied. Dkt. No. 23 at 1 (Resp. Cross. Mot.). PartnerRe
further contends that the Panel was not obligated to explain how it calculated the Award, and that
the lack of any such explanation is not a basis for vacatur. Id. at 2. Respondent maintains that the
Panel was empowered by the Parties’ arbitration agreement to determine an equitable award

according to industry custom and practice. Id. at 3.
The arbitration agreement states, in relevant part, that “[t]he Panel shall interpret this
Agreement as an honorable engagement rather than as merely a legal obligation and shall make
its decision considering the custom and practice of the applicable insurance and reinsurance
business. . . .” Id. at 4.2 In addition, Respondent maintains that it sought alternative relief beyond
1F
recission, contrary to TICL’s claims. Id. PartnerRe asserts that both parties agreed the Panel

2 Although not crucial to the Court’s analysis here, it is worth noting that PartnerRe also disputes TICL’s
allegation that PartnerRe conceded anything by way of the Headman Email, arguing that the email merely
offered Headman’s “preliminary observations.” Id. at 5–6. Further, PartnerRe argues that the Panel never
determined fraud to be the only grounds for recission, and that the Panel suggested that negligent or reckless
misconduct may qualify as such grounds. Id. at 6.
could issue equitable relief. Id. Finally, Respondent argues that TICL failed to establish manifest
disregard of the law or that the Panel exceeded its authority. Id.
i. Manifest Disregard is Not Met Because the Arbitration Panel Was Not Required
to Apply New York State Law and Whether the Arbitrators Misconstrued a
Contract is Not Open to Judicial Review
Since Petitioner argues for vacatur on the grounds of manifest disregard, the Court will look
to whether (1) “the governing law alleged to have been ignored by the arbitrators was well
defined, explicit, and clearly applicable,” and (2) “the arbitrator knew about the existence of a
clearly governing legal principle but decided to ignore it or pay no attention to it.” Jock., 646
F.3d at 122 (internal quotations omitted); Wallace, 378 F.3d at 189.
Here, the Contract included an arbitration clause which states:
The Panel shall interpret this Agreement [the parties’ reinsurance contract] as an
honorable engagement rather than as merely a legal obligation and shall make its
decision considering the custom and practice of the applicable insurance and
reinsurance business as promptly as possible following the termination of the
hearings.
Dkt. No. 23 at 12; Ex. B ¶13(g).
Courts interpret these provisions broadly and routinely hold that arbitrators enjoy substantial
leeway in fashioning whatever remedies they consider suitable. Banco de Seguros del Estado v.
Mut. Marine Office, Inc., 344 F.3d 255, 261 (2d Cir. 2003). Moreover, the arbitration agreement
does not make any state’s law binding; it instead permits the Panel, in its discretion, to apply
principles of New York substantive law only insofar as it chooses. J. B. Harris, Inc. v. Razei Bar
Indus., Ltd., 37 F. Supp. 2d 186, 190 (E.D.N.Y. 1998) (citing Silverman v. Benmor Coats, Inc.,
61 N.Y.2d 299, 308 (1984) (“. . .[A]bsent provision in the arbitration clause itself, an arbitrator is
not bound by principles of substantive law or by rules of evidence. . . .”); see also Dkt. No. 23 at
12; Ex. B ¶¶ 13(f), 17.
In Prestige Bread Co. of Jersey City, Inc. v. OTG Mgmt., LLC, the petitioner argued that the
arbitrator mishandled the force majeure clause, inter alia, so the award should be vacated for
“manifest disregard.” 2022 WL 3587011, at *2 (S.D.N.Y. Aug. 22, 2022). This Court explained
that any mistake in reading the contract is not something a court can review. Id.; see also

Benihana Inc. v. Benihana of Tokyo, LLC, No. 18 CIV. 7506 (PAE), 2019 WL 251729, at *6
(S.D.N.Y. Jan. 17, 2019) (“Whether the arbitrators misconstrued a contract is not open to judicial
review.” (quoting Bernhardt v. Polygraphic Co. of Am., 350 U.S. 198, 203 n.4 (1956))). Thus, it
is not within this Court’s authority to decide whether the arbitrators erred in their interpretation
of the Contract. See id. The Parties’ honorable engagement clause further excused the arbitration
Panel from being bound by New York law and actually granted them broader authority to apply
“the custom and practice of the applicable insurance and reinsurance business.” Dkt. No. 23; Ex.
B ¶13(g).
Accordingly, the Court rejects Petitioner’s arguments that (1) the Panel was bound by and
manifestly disregarded New York State law, (2) the Panel disregarded the plain terms or the

Unintentional Errors and Omissions Clause, and (3) that the Panel “wrote in” a coinsurance or
average clause to the Contract. ECF No. 3 at 19, 25–26. As a result, the “manifest disregard”
requirements are not met for the Court declines to vacate the Award.
CONCLUSION
For the foregoing reasons, Petitioner’s motion to vacate the arbitration award is
DENIED. Respondent’s cross-motion to confirm the award is CONFIRMED. The Clerk of
Court is respectfully directed to terminate the pending motions at Dkt. Nos. 20 and 38.
SO ORDERED
Dated: March 31, 2026 (Arde 7 Cay
New York, New York
ANDREW L. CARTER, JR.
United States District Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11387661. Public record. Not legal advice.