As previously reported, there is a split in U.S. courts on the issue of whether a district court may order a person or entity in its district to give discovery (either documents or a deposition) for use in a foreign private arbitration pursuant to 28 U.S.C. § 1782. The Fourth and Sixth Circuit Courts of Appeals have held that the statute permits the use of the discovery tool even when the underlying proceeding is a foreign private arbitration. The Second, Fifth, and Seventh Circuit Courts of Appeals have ruled that private arbitral bodies are not “tribunals” under the statute and therefore the use of Section 1782 is not permitted in aid of a foreign arbitration. The U.S. Supreme Court has only addressed Section 1782 once in a decision from 2004, but that matter did not specifically address the question of whether discovery was permissible for use in a foreign arbitration. However, the U.S. Supreme Court did write that the “tribunal” definition in the statute was “unbounded by categorical rules” and quoted from a 1965 law review article by Professor Hans Smit which stated that the legislative history of the statute intended to include “arbitral tribunals.” Intel Corp. v. Adv. Micro Devices, Inc., 542 U.S. 241 (2004). The Court’s dicta in the Intel Corp. decision led to many different results in the lower courts around the United States.
Given the split of authority among the Circuit Courts on the issue, the U.S. Supreme Court granted certiorari on March 22, 2021 in the case arising from the Seventh Circuit Court of Appeals. Servotronics Inc. v. Rolls-Royce PLC, et al., No. 20-794. The petitioner and respondents have filed their respective opening briefs on the merits of the appeal and numerous third parties have filed amicus curiae briefs for the Supreme Court’s consideration on the issue. On June 28, 2021, the United States of America, through the Solicitor General’s office filed an amicus curiae brief in support of the respondents. The government argued that the United States has a substantial interest in the resolution of the question and application of Section 1782, because the statute plays an important role in “encouraging international cooperation, facilitating the resolution of foreign disputes, and fostering international comity.” The United States utilizes Section 1782 to present to courts letters rogatory and letters of request that are received through the Department of State or the Department of Justice. The government’s brief argues that a review of the background of the existing law and Congress’ objective in undertaking the statute’s revisions in 1964 was meant to merely put foreign quasi-judicial entities (and intergovernmental bodies) on the same footing with foreign courts. Bluntly, in no way was it meant to sweep up private, commercial foreign arbitrations into Section 1782’s ambit.
The government offers two (2) public policy arguments in further support of the position that Section 1782 does not apply to foreign private arbitration. First, that such a broad interpretation of “proceeding in a foreign or international tribunal” would create significant tension with the Federal Arbitration Act which narrowly limits available discovery in connection with arbitration. The government argues that by permitting discovery in aid of foreign arbitrations under Section 1782, parties to foreign arbitration would have broader access to court-assisted discovery than parties in domestic arbitration. In addition, the government argues that if the Supreme Court were to permit such a broad interpretation, it could potentially be used by a future party in an “investor-state arbitration.” Investor-state arbitration permits a foreign investor to arbitrate a claim directly against the government of the state in which the investment is held or was sought to be made. The government argues that investor-state arbitrations share many of the features of private commercial arbitration and it could not have possibly been the intent of Congress to have Section 1782 apply to treaty-based investor-state arbitration when it enacted the language in the 1964 version of Section 1782, because that type of arbitration did not exist. Furthermore, the government argues that permitting Section 1782 discovery in investor-state arbitrations would jeopardize the predictability and efficiency of those types of arbitrations.
The United States has requested ten (10) minutes of argument time at the upcoming oral argument, which has not yet been set by the Court. Respondents have agreed to cede ten (10) minutes from its oral argument time to the government. It is anticipated that oral argument will be set during the fall October 2021 Term. It is unlikely a decision will be issued prior to December 2021 at the earliest, and most likely not until the first half of 2022.
A copy of the amicus curiae brief by the United States, can be found here.
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