## Facts

- U.S. investors became “Names” in the Lloyd’s of London insurance market, undertaking unlimited personal liability to support syndicates underwriting insurance risks.
- To participate, the investors executed interrelated contracts (including a General Undertaking and agency agreements) containing:
  - Exclusive English forum-selection clauses for disputes tied to Lloyd’s membership and related agreements;
  - English choice-of-law clauses; and
  - In at least one agreement, a London arbitration provision governed by English procedure and substantive law.
- After large late-1980s syndicate losses (including asbestos and pollution liabilities), the investors alleged Lloyd’s-related entities misrepresented or concealed material risks in soliciting their participation.
- The investors sued in federal court in New York asserting only U.S. statutory claims, principally federal securities claims and civil RICO, and did not plead common-law fraud or English-law claims.
- Defendants moved to dismiss and to compel litigation or arbitration in England under the contractual clauses; the district court enforced the clauses and dismissed.
- The investors appealed, arguing the clauses did not reach their U.S. statutory claims and were unenforceable due to securities-law anti-waiver provisions and public policy (including RICO).

## Issues

1. Whether broad English forum-selection, choice-of-law, and London arbitration provisions apply to U.S. federal securities and civil RICO claims arising from the Lloyd’s investment relationship.
2. Whether those provisions are unenforceable as applied to securities and RICO claims because anti-waiver statutes or public policy require a U.S. forum and U.S. law.

## Decision

- The Second Circuit affirmed dismissal in favor of proceedings in England.
- The court held the clauses were broad enough to cover the investors’ U.S. securities and RICO claims because the claims arose out of and related to the contractual Lloyd’s relationship.
- The court enforced the English forum and law provisions (and related arbitration requirement where applicable), concluding the investors did not make the required strong showing that enforcement would be unreasonable or unjust.
- The court rejected arguments that securities-law anti-waiver provisions or RICO policy barred enforcement, even if English proceedings would not provide identical U.S. statutory remedies.

## Legal Principles

- Forum-selection clauses in international agreements are presumptively valid and enforced absent a strong showing that enforcement would be unreasonable, unjust, or the product of fraud or overreaching directed at the clause itself.
- Broad forum-selection and related choice-of-law provisions can extend to statutory causes of action (including fraud- and racketeering-based claims) when the claims are not independent of the contractual relationship.
- Securities-law anti-waiver provisions prohibit contractual waivers of substantive compliance, but do not necessarily invalidate agreements selecting a foreign forum and foreign law for dispute resolution in international commercial settings.
- Absent clear congressional intent to preclude foreign fora or arbitration, federal statutory claims (including RICO) may be subject to enforceable foreign forum-selection, choice-of-law, and arbitration provisions.
- Considerations of comity and commercial certainty support enforcing agreed English dispute-resolution mechanisms for disputes tied to a British-regulated market institution.

## Conclusion

The Second Circuit required U.S. Lloyd’s Names to pursue disputes in England under English law (and London arbitration where agreed), holding that the contractual forum-selection and choice-of-law provisions encompassed and were enforceable against U.S. securities and civil RICO claims.


Roby v. Corp. of Lloyd's, 996 F.2d 1353 (2d Cir. 1993)