## Facts

- Lloyd’s of London operates an insurance market in which individual investors (“Names”) provide capital to underwriting syndicates.
- U.S. investors became Names by signing standard-form membership documents, including a General Undertaking and a Members’ Agent’s Agreement.
- The agreements required (1) application of English law and (2) exclusive resolution of disputes in England.
- After incurring substantial losses, the investors alleged Lloyd’s misrepresented or failed to disclose significant long-tail liabilities (including asbestos and pollution exposures) and induced investment through fraudulent materials and omissions.
- The investors sued in U.S. federal court asserting claims under the Securities Act of 1933, the Securities Exchange Act of 1934, civil RICO, and state-law theories.
- Lloyd’s moved to dismiss based on the contractual forum-selection and choice-of-law clauses.

## Issues

1. Whether the anti-waiver provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934 render void contractual clauses requiring disputes to be litigated in England under English law.
2. Whether, even if not automatically void, the clauses should be denied enforcement on public-policy grounds because they would effectively deprive U.S. investors of federal securities-law protections.

## Decision

- The Ninth Circuit, sitting en banc, affirmed the dismissal enforcing the English forum-selection and choice-of-law clauses.
- The court held the securities-law anti-waiver provisions did not automatically invalidate these clauses in the international transaction presented.
- The court rejected a public-policy challenge based solely on the fact that English law and remedies were less favorable than U.S. securities and RICO remedies.
- The court emphasized the international character of the Lloyd’s relationship and federal policy favoring enforcement of forum-selection clauses in cross-border commerce.
- The ruling did not decide the merits of the investors’ securities or RICO allegations; it addressed only the enforceability of the contractual forum and law provisions.

## Legal Principles

- Anti-waiver provisions in the federal securities statutes prohibit contractual waivers of statutory compliance but do not categorically bar enforcement of foreign forum-selection and choice-of-law clauses in international agreements.
- A forum-selection clause in an international contract is generally enforced unless the resisting party shows enforcement would be unreasonable or contrary to strong public policy.
- The unavailability of identical U.S. statutory causes of action or remedies in the chosen foreign forum, standing alone, is insufficient to defeat an otherwise valid forum-selection clause where litigants can pursue their rights in that forum.

## Conclusion

The court required U.S. Lloyd’s investors to litigate in England under English law as agreed, holding that federal securities anti-waiver provisions and general public-policy objections did not justify disregarding the contractual forum-selection and choice-of-law clauses in this international setting.


Richards v. Lloyd’s of London, 135 F.3d 1289 (9th Cir. 1998) (en banc)