dissenting.
Respondent (Alberto-Culver) is a publicly held corporation whose stock is traded on the New York Stock Exchange and is a Delaware corporation with its principal place of business in Illinois. Petitioner (Scherk) owned a business in Germany, Firma Ludwig Scherk, dealing with cosmetics and toiletries. Scherk owned various trademarks and all outstanding securities of a Liechtenstein corporation (SEV) and of a German corporation, Lodeva. Scherk also owned various trademarks which were licensed to manufacturers and distributors in Europe and in this country. SEY collected the royalties on those licenses.
Alberto-Culver undertook to purchase from Scherk the entire establishment — the trademarks and the stock of the two corporations; and later, alleging it had been defrauded, brought this suit in the United States District Court in Illinois to rescind the agreement and to obtain damages.
*522The only defense material at this stage of the proceeding is a provision of the contract providing that if any controversy or claim arises under the agreement the parties agree it will be settled “exclusively” by arbitration under the rules of the International Chamber of Commerce, Paris, France.
The basic dispute between the parties concerned allegations that the trademarks which were basic assets in the transaction were encumbered and that their purchase was induced through serious instances of fraudulent representations and omissions by Scherk and his agents within the jurisdiction of the United States. If a question of trademarks were the only one involved, the principle of The Bremen v. Zapata Off-Shore Co., 407 U. S. 1, would be controlling.
We have here, however, questions under the Securities Exchange Act of 1934, which in § 3 (a) (10) defines “security” as including any “note, stock, treasury stock, bond, debenture, certificate of interest or participation in any profit-sharing agreement....” 15 U. S. C. § 78c (a) (10). We held in Tcherepnin v. Knight, 389 U. S. 332, as respects § 3 (a) (10):
“[R] emedial legislation should be construed broadly to effectuate its purposes. The Securities Exchange Act quite clearly falls into the category of remedial legislation. One of its central purposes is to protect investors through the requirement of full disclosure by issuers of securities, and the definition of security in § 3 (a) (10) necessarily determines the classes of investments and investors which will receive the Act’s protections. Finally, we are reminded that, in searching for the meaning and scope of the word 'security’ in the Act, form should be disregarded for substance and the emphasis should *523be on economic reality.” Id., at 336. (Footnote omitted.)
Section 10 (b) of the 1934 Act makes it unlawful for any person by use of agencies of interstate commerce or the mails “[t]o use or employ, in connection with the purchase or sale of any security,” whether or not registered on a national securities exchange, “any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe.” 15 U. S. C. §78j (b).
Alberto-Culver, as noted, is not a private person but a corporation with publicly held stock listed on the New York Stock Exchange. If it is to be believed, if in other words the allegations made are proved, the American company has been defrauded by the issuance of “securities” (promissory notes) for assets which are worthless or of a much lower value than represented. Rule 10b-5 of the Securities and Exchange Commission states:
“It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,
“(a) To employ any device, scheme, or artifice to defraud,
“(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
“(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person,
“in connection with the purchase or sale of any security.” 17 CFR § 240.10b-5.
*524Section 29 (a) of the Act provides:
“Any condition, stipulation, or provision binding any person to waive compliance with any provision of this chapter or of any rule or regulation thereunder, or of any rule of an exchange required thereby shall be void.” 15 U. S. C. § 78cc (a).
And § 29 (b) adds that “[e]very contract” made in violation of the Act “shall be void.” 1 No exception is made for contracts which have an international character.
The Securities Act of 1933,48 Stat. 84,15 U. S .C. § 77n, has a like provision in its § 14:
“Any condition, stipulation, or provision binding any person acquiring any security to waive compliance with any provision of this subchapter or of the rules and regulations of the Commission shall be void.”
In Wilko v. Swan, 346 U. S. 427, a customer brought suit against a brokerage house alleging fraud in the sale of stock. A motion was made to stay the trial until arbitration occurred under the United States Arbitration Act, 9 U. S. C. § 3, as provided in the customer’s contract. The *525Court held that an agreement for arbitration was a “stipulation” within the meaning of § 14 which sought to “waive” compliance with the Securities Act. We accordingly held that the courts, not the arbitration tribunals, had jurisdiction over suits under that Act. The arbitration agency, we held, was bound by other standards which were not necessarily consistent with the 1933 Act. We said:
“As the protective provisions of the Securities Act require the exercise of judicial direction to fairly assure their effectiveness, it seems to us that Congress must have intended § 14 ... to apply to waiver of judicial trial and review.” 346 U. S., at 437.
Wilko was held by the Court of Appeals to control this case — and properly so.
The Court does not consider the question whether a “security” is involved in this case, saying it was not raised by petitioner. A respondent, however, has the right to urge any argument to support the judgment in his favor (save possibly questions of venue, see Peoria R. Co. v. United States, 263 U. S. 528, 536; United States v. American Railway Express Co., 265 U. S. 425, 435-436, and n. 11), even those not passed upon by the court below and also contentions rejected below. Langnes v. Green, 282 U. S. 531, 535-539; Walling v. General Industries Co., 330 U. S. 545, 547 n. 5. The Court of Appeals held that “securities” within the meaning of the 1934 Act were involved here, 484 F. 2d 611, 615. The brief of the respondent is based on the premise that “securities” are involved here; and petitioner has not questioned that ruling of the Court of Appeals.
It could perhaps be argued that Wilko does not govern because it involved a little customer pitted against a big brokerage house, while we deal here with sophisticated buyers and sellers: Scherk, a powerful German operator, *526and Alberto-Culver, an American business surrounded and protected by lawyers and experts. But that would miss the point of the problem. The Act does not speak in terms of “sophisticated” as opposed to “unsophisticated” people dealing in securities. The rules when the giants play are the same as when the pygmies enter the market.
If there are victims here, they are not Alberto-Culver the corporation, but the thousands of investors who are the security holders in Alberto-Culver. If there is fraud and the promissory notes are excessive, the impact is on the equity in Alberto-Culver.
Moreover, the securities market these days is not made up of a host of small people scrambling to get in and out of stocks or other securities. The markets are overshadowed by huge institutional traders.2 The so-called “off-shore funds,” of which Scherk is a member, present perplexing problems under both the 1933 and 1934 Acts.3 The tendency of American investors to invest indirectly as through mutual funds4 may change the character of the regulation but not its need.
There has been much support for arbitration of disputes; and it may be the superior way of settling some disagreements. If A and B were quarreling over a trademark and there was an arbitration clause in the contract, the policy of Congress in implementing the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, as it did in 9 U. S. C. § 201 et seq., would prevail. But the Act does not substitute an arbiter for the settlement of disputes under *527the 1933 and 1934 Acts. Art. II (3) of the Convention says:
“The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.” 5 [1970] 3 U. S. T. 2517, 2519, T. I. A. S. No. 6997.
But § 29 (a) of the 1934 Act makes agreements to arbitrate liabilities under § 10 of the- Act “void” and “inoperative.” Congress has specified a precise way whereby big and small investors will be protected and the rules under which the Alberto-Culvers of this Nation shall operate. They or their lawyers cannot waive those statutory conditions, for our corporate giants are not principalities of power but guardians of a host of wards unable to care for themselves. It is these wards that the 1934 Act tries to protect.6 Not a word in the Convention gov*528erning awards adopts the standards which Congress has passed to protect the investors under the 1934 Act. It is peculiarly appropriate that we adhere to Wilko — more so even than when Wilko was decided. Huge foreign investments are being made in our companies. It is important that American standards of fairness in security dealings govern the destinies of American investors until Congress changes these standards.
The Court finds it unnecessary to consider Scherk’s argument that this case is distinguishable from Wilko in that Wilko involved parties of unequal bargaining strength. Ante, at 512-513, n. 6. Instead, the Court rests its conclusion on the fact that this was an “international” agreement, with an American corporation investing in the stock and property of foreign businesses, and speaks favorably of the certainty which inheres when parties *529specify an arbitral forum for resolution of differences in “any contract touching two or more countries.”
This invocation of the “international contract” talisman might be applied to a situation where, for example, an interest in a foreign company or mutual fund was sold to an utterly unsophisticated American citizen, with material fraudulent misrepresentations made in this country. The arbitration clause could appear in the fine print of a form.contract, and still be sufficient to preclude recourse to our courts, forcing the defrauded citizen to arbitration in Paris to vindicate his rights.7
It has been recognized that the 1934 Act, including the protections of Rule 10b-5, applies when foreign defendants have defrauded American investors, particularly when, as alleged here,8 they have profited by virtue *530of proscribed conduct within our boundaries. This is true even when the defendant is organized under the laws of a foreign country, is conducting much of its activity outside the United States, and is therefore governed largely by foreign law.9 The language of § 29 of the 1934 Act does not immunize such international transactions, and the United Nations Convention provides that a forum court in which a suit is brought need not enforce an agreement to arbitrate which is “void” and “inoperative” as contrary to its public policy.10 When a *531foreign corporation undertakes fraudulent action which subjects it to the jurisdiction of our federal securities laws, nothing justifies the conclusion that only a diluted version of those laws protects American investors.
Section 29 (a) of the 1934 Act provides that a stipulation binding one to waive compliance with “any provision” of the Act shall be void, and the Act expressly provides that the federal district courts shall have “exclusive jurisdiction” over suits brought under the Act. 15 U. S. C. *532§ 78aa. The Court appears to attach some significance to the fact that the specific provisions of the 1933 Act involved in Wilko are not duplicated in the 1934 Act, which is involved in this case. While Alberto-Culver would not have the right to sue in either a state or federal forum as did the plaintiff in Wilko, 346 U. S., at 431, the Court deprives it of its right to have its Rule 10b-5 claim heard in a federal court. We spoke at length in Wilko of this problem, elucidating the undesirable effects of remitting a securities plaintiff to an arbitral, rather than a judicial, forum. Here, as in Wilko, the allegations of fraudulent misrepresentation will involve “subjective findings on the purpose and knowledge” of the defendant, questions ill-determined by arbitrators without judicial instruction on the iaw. See id., at 435. An arbitral award can be made without explication of reasons and without development of a record, so that the arbitrator’s conception of our statutory requirement may be absolutely incorrect yet functionally unreviewable, even when the arbitrator seeks to apply our law. We recognized in Wilko that there is no judicial review corresponding to review of court decisions. Id., at 436-437. The extensive pretrial discovery provided by the Federal Rules of Civil Procedure for actions in district court would not be available. And the wide choice of venue provided by the 1934 Act, 15 U. S. C. § 78aa, would be forfeited. See Wilko v. Swan, supra, at 431, 435. The loss of the proper judicial forum carries with it the loss of substantial rights.11
*533When a defendant, as alleged here, has, through proscribed acts within our territory, brought itself within the ken of federal securities regulation, a fact not disputed here, those laws — including the controlling principles of Wilko — apply whether the defendant is foreign or American, and whether or not there are transnational elements in the dealings. Those laws are rendered a chimera when foreign corporations or funds — unlike domestic defendants — can nullify them by virtue of arbitration clauses which send defrauded American investors to the uncertainty of arbitration on foreign soil, or, if those investors cannot afford to arbitrate their claims in a far-off forum, to no remedy at all.
Moreover, the international aura which the Court gives this case is ominous. We now have many multinational corporations in vast operations around the world — Europe, Latin America, the Middle East, and Asia.12 The investments of many American investors turn on dealings by these companies. Up to this day, it has been assumed by reason of Wilko that they were all protected by our various federal securities Acts. If these guarantees are to be removed, it should take a legislative enactment. I would enforce our laws as they stand, unless Congress makes an exception.
*534The virtue of certainty in international agreements may be important, but Congress has dictated that when there are sufficient contacts for our securities laws to apply, the policies expressed in those laws take precedence. Section 29 of the 1934 Act, which renders arbitration clauses void and inoperative, recognizes no exception for fraudulent dealings which incidentally have some international factors. The Convention makes provision for such national public policy in Art. II (3). Federal jurisdiction under the 1934 Act will attach only to some international transactions, but when it does, the protections afforded investors such as Alberto-Culver can only be full-fledged.
Section 29 (b) reads: “Every contract made in violation of any provision of this chapter or of any rule or regulation thereunder, and every contract (including any contract for listing a security on an exchange) heretofore or hereafter made, the performance of which involves the violation of, or the continuance of any relationship or practice in violation of, any provision of this chapter or any rule or regulation thereunder, shall be void (1) as regards the rights of any person who, in violation of any such provision, rule, or regulation, shall have made or engaged in the performance of any such contract, and (2) as regards the rights of any person who, not being a party to such contract, shall have acquired any right thereunder with actual knowledge of the facts by reason of which the making or performance of such contract was in violation of any such provision, rule, or regulation .. ..” 15 U. S. C. § 78cc (b).
See Institutional Investor Study Report of the SEC, H. R. Doc. No. 92-64 (1971), particularly Vol. 4.
Id., Vol. 1, p. XVI; Vol. 3, p. 879 et seq.
Id., Vol. 1, p. XIX; Vol. 2, p. 215 et seq.
The Convention also permits that arbitral awards not be recognized and enforced when a court in the country where enforcement is sought finds that “[t]he recognition or enforcement of the award would be contrary to the public policy of that country.” Art. V (2) (6); [1970] 3 U. S. T. 2517, 2520, T. I. A. S. No. 6997. It also provides that recognition of an award may be refused when the arbitration agreement “is not valid under the law to which the parties have subjected it,” in this case the laws of Illinois. Art. V (1) (a). See n. 10, infra.
Requirements promulgated under the 1934 Act require disclosure to security holders of corporate action which may affect them. Extensive annual reports must be filed with the SEC including, inter alia, financial figures, changes in the conduct of business, the acquisition or disposition of assets, increases or decreases in outstanding securities, and even the importance to the business of trademarks held. See 17 CFR §§240.13a-l, 249.310; 3 CCH Fed. Sec. L. Rep. ¶ 31,101 et seq. (Form 10-K). The Commission has pro*528posed that corporations furnish a copy of annual reports filed with it to any security holder who is solicited for a proxy and requests the report. 39 Fed. Reg. 3836. Current reports must be filed with the SEC by an issuer of securities when substantial events occur, as when the rights evidenced by any class of securities are materially altered by the issuance of another class of securities or when an issuer has acquired a significant amount of assets other than in the ordinary course of business. See 17 CFR §§ 240.13a-ll, 249.308; 3 CCH Fed. Sec. L. Rep. ¶ 31,001 et seq. (Form 8-K).
The Commission, recognizing that the Form 10-K reports filed annually with it might be excessively abstruse for security holders, see 39 Fed. Reg. 3835, has proposed that the annual reports distributed to security holders in connection with annual meetings and solicitation of proxies provide substantially greater am mint,a of meaningful information than required presently. These annual reports would include a description of the business of the issuer, a summary of operations, explanation of changes in revenues and expenses, information on the liquidity position and the working capital requirements of the issuer, and identification of management and performance on the market of the issuer's securities. See id., at 3834-3838.
The Court concedes, ante, at 517 n. 11, that there may be situations where foreign contacts were "so insignificant or attenuated” that Wüko would apply and an American court would not enforce an arbitration agreement in an international contract. The recognition that “international” contracts may in fact involve significant direct contacts with this country is realistic and salutary. But the Court by its concession undermines somewhat its reliance on its admonition — itself supported only by speculation — that “[a] contractual provision specifying in advance the forum in which disputes shall be litigated ... is ... an almost indispensable precondition to achievement of the orderliness and predictability essential to any international business transaction.” Uncertainty and a “dicey 'atmosphere,” supposedly destructive of international contracts, may persist for many contracts. The parties to an international contract may not in fact be bound by a “solemn agreement” to arbitrate, for an American court could find, at a much later date, sufficient contacts with this country to require the application of Wilko.
The District Court for the Northern District of Illinois noted allegations that Scherk had failed to state a material fact, the omission of which would have been misleading, see 17 CFR § 240.10b-5 (b), during crucial negotiations in Melrose Park, Illinois, and that communications between Alberto-Culver and Scherk’s attorney concerning the validity and value of the trademarks occurred within the *530territorial jurisdiction of the United States. Finally, the District Court noted that the full economic impact of the alleged fraud occurred within the United States.
See, e. g., Leasco Data Processing Equipment Corp. v. Maxwell, 468 F. 2d 1326, 1334-1339 (CA2 1972); Travis v. Anthes Imperial Ltd,., 473 F. 2d 515, 523-528 (CA8 1973); SEC v. United Financial Group, Inc., 474 F. 2d 354 (CA9 1973); Schoenbaum v. Firstbrook, 405 F. 2d 200 (CA2 1968); Roth v. Fund of Funds, 279 F. Supp. 935 (SDNY), aff’d, 405 F. 2d 421 (CA2 1968).
A summary of the conference proceedings which led to the adoption of the United Nations Convention was prepared by G. W. Haight, who served as a member of the International Chamber of Commerce delegation' to the conference. Haight, Convention on the Recognition and Enforcement of Foreign Arbitral Awards: Summary Analysis of Record of United Nations Conference, May/June 1958 (1958).
When Art.' II (3) was being discussed, the Israeli delegate pointed out that while a court could, under the draft Convention as it then stood, refuse enforcement of an award which was incompatible with public policy, “ ‘the court had to refer parties to arbitration whether or not such reference was lawful or incompatible with public policy.’ ” Id., at 27. The German delegate observed that this difficulty arose from the omission in Art. II (3) “ ‘of any words which would relate the arbitral agreement to an arbitral award capable of enforcement under the convention.’ ” Ibid.
Haight continues:
“When the German proposal was put to a vote, it failed to obtain a two-thirds majority (13 to 9) and the Article was thus adopted without any words linking agreements to the awards enforceable under the Convention. Nor was this omission corrected in the Report of the Drafting Committee (L.61), although the obligation *531to refer parties to arbitration was (and still is) qualified by the clause ‘unless it finds that the agreement is null and void, inoperative or incapable of being performed.’
“As the applicable law is not indicated, courts may under this wording be allowed some latitude; they may find an agreement incapable of performance if it offends the law or the public policy of the forum. Apart from this limited opening, the Conference appeared unwilling to qualify the broad undertaking not only to recognize but also to give effect to arbitral agreements.” Id., at 28 (emphasis added).
Whatever “concern” the delegates had that signatories to the Convention “not be permitted to decline enforcement of such agreements on the basis of parochial views of their desirability,” ante, at 520 n. 15, it would seem that they contemplated that a court may decline to enforce an agreement which offends its law or public policy.
The Court also attempts to treat this case as only a minor variation of The Bremen v. Zapata Off-Shore Co., 407 U. S. 1. In that case, however, the Court, per Mr. Chief Justice Burger, explicitly stated:
"A contractual choice-of-forum clause should be held unenforceable if enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision.” Id., at 15.
That is inescapably the case here, as § 29 of the Securities Exchange Act and Wilko v. Swan make clear. Neither § 29, nor the Convention on international arbitration, nor The Bremen justifies abandonment of a national public policy that securities claims be heard by a judicial forum simply because some international elements are involved in a contract.
The agreements in this case provided that the “laws of the State of Illinois” are applicable. Even if the arbitration court should read this clause to require application of Rule 10b-5’s standards, Alberto-Culver’s victory would be Pyrrhic. The arbitral court may improperly interpret the substantive protections of the Rule, and if it does its error will not be reviewable as would the error of a federal court. And the ability of Alberto-Culver to prosecute its *533claim would be eviscerated by lack of discovery. These are the policy considerations which underlay Wilko and which apply to the instant case as well.
See Knickerbocker, Oligopolistic Reaction and Multinational Enterprise (Haw. Univ. 1973); J. Vaupel & J. Curhan, The World’s Multinational Enterprises (Harvard Univ. 1973). See generally Senate Committee on Finance, 93d Cong., 1st Sess., Implications of Multinational Firms for World Trade and Investment and for U. S. Trade and Labor (Comm. Print 1973); Morgan, Controlling the Multinationals, Washington Post, Nov. 17, 1973, p. A15; Diebold, Precarious Path of the Multinationals, Wall Street Journal, Aug. 17, 1973, p. 6, col. 4.