Question: Ronald Riley, a U.S. citizen, and Council of Lloyd's, a British insurance corporation with its principal place of business in London, entered into an agreement in 1980 that allowed Riley to underwrite insurance through Lloyd's. The agreement provided that if any dispute arose between Lloyd's and Riley, the courts of England would have exclusive jurisdiction, and the laws of England would apply. Over the next decade, some of the parties insured under policies that Riley underwrote experienced large losses, for which they filed claims. Instead of paying his share of the claims, Riley filed a lawsuit in a U.S. district court against Lloyd's and its managers and directors (all British citizens or entities), seeking, among other things, rescission of the 1980 agreement. Riley alleged that the defendants had violated the Securities Act of 1933, the Securities Exchange Act of 1934, and Rule 10b-5. The defendants asked the court to enforce the forumselection clause in the agreement. Riley argued that if the clause was enforced, he would be deprived of his rights under the U.S. securities laws. The court held that the parties were to resolve their dispute in England. [Riley v. Kingsley Underwriting Agencies, Ltd., 969 F.2d 953 (10th Cir. 1992)]
1. Did the court's decision fairly balance the rights of the parties? How would you argue in support of the court's decision in this case? How would you argue against it?
2. Should the fact that an international transaction may be subject to laws and remedies different from or less favorable than those of the United States be a valid basis for denying enforcement of forum-selection and choice-of-law clauses?
3. All parties to this litigation other than Riley were British. Should the court consider this fact in deciding this case?