Can Forum Selection Clause Be Circumvented Because Foreign Law Might Be ''Less Favorable'' ?
In Roby v. Corporation of Lloyd's, 996 F.2d 1353 (2nd Cir. 1993), the plaintiff investors contended that choice of law clauses contained in their agreements were unenforceable because, inter alia, English courts would not apply United States securities laws, Support for this position came from "the undisputed testimony of a British attorney that neither an English court nor an English arbitrator would apply the United States securities laws, because English conflict of law rules do not permit recognition of foreign tort or statutory law." See Roby, 996 F.2d at 1362.
Notwithstanding the testimony before it that certain statutory securities claims might not be available in England, the Roby court held that "it defies reason to suggest that a plaintiff may circumvent forum selection and arbitration clauses merely by stating claims under laws not recognized by the forum selected in the agreement." Roby, 996 F.2d at 1360.
Finding the available remedies in England adequate, the court refused to negate contract clauses delineating the application of English law. Roby, 996 F.2d at 1365-66.
The Roby court noted that forum selection and choice of law clauses could not be circumvented merely because foreign law or procedure might be different or less favorable than that of the United States. Roby, 996 F.2d at 1363.
Instead, the question is whether the application of the foreign law presents a danger that plaintiffs would be deprived of any remedy or treated unfairly. Roby, 996 F.2d at 1363.
The Roby court therefore rejected the plaintiffs' argument because it found that they had ample remedies under English law and nothing suggested that the English courts were biased or unfair. Roby, 996 F.2d 1353;
See also Allen, 94 F.3d at 929 ("We do not believe that enforcing the parties' forum selection and choice of law provisions in this case will subvert United States securities laws' policy of prohibiting fraud. British law not only prohibits fraud and misrepresentations as do the United States securities laws, but also affords plaintiffs adequate remedies in the United Kingdom.").