The United States has a statute which provides a very helpful tool for parties seeking testimony or documents from individuals or entities located in the United States in aid of a foreign dispute. Specifically 28 U.S.C. § 1782 provides that a U.S. district court may, on the request of an interested party, provide assistance in connection with a proceeding before “a foreign or international tribunal” by ordering a person in its district “to give his testimony or statement or to produce a document or other thing for use in [the] proceeding.” There has long been a lingering question among Courts and lawyers as to whether a private foreign arbitration proceeding qualified as a “tribunal.”
The leading authorities on the subject had been decisions from the Second Circuit Court of Appeals (NBC, Inc. v. Bear Stearns & Co., Inc., 165 F.3d 184 (2d Cir. 1999)) and the Fifth Circuit Court of Appeals (Republic of Kazakhstan v. Biedermann International, 168 F.3d 880 (5th Cir. 1999)), which both held that private arbitral bodies are not “tribunals” under the statute and therefore the use of Section 1782 was not permitted in aid of a foreign arbitration. The Supreme Court of the United States stated in a 2004 decision 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).
Many district courts took this statement by the Supreme Court to mean that the definition of tribunal had been broadened and started granting discovery requests in aid of foreign private arbitrations. However, other district courts rejected the statement as “mere dicta” and not binding authority which overruled the Second Circuit or Fifth Circuit decisions. As District Judge Rakoff of the Southern District of New York held, NBC is still the law of the Circuit and Professor Smit’s quote has been taken out of context as there is no dispute that arbitration’s created by governmental entities would qualify as a tribunal under the statute, but the Supreme Court has not held that such a right extends to private arbitration created by parties. In re Petrobras Sec. Litig., 393 F. Supp. 3d 376, 385 (S.D.N.Y. 2019).
Since Judge Rakoff’s decision, two (2) Federal Courts of Appeal have reviewed the issue and have ruled in favor of private arbitration qualifying as a tribunal. Specifically, the Sixth Circuit Court of Appeals and the Fourth Circuit Court of Appeals have now ruled that both the original legislative intent and the Supreme Court’s ruling in Intel Corp. stand for the proposition that private arbitrations are covered by the statute. See, e.g., In Servotronics, Inc. v. Boeing Co. 954 F.3d 209 (4th Cir. 2020) (citing In re Application to Obtain Discovery for Use in Foreign Proceedings, 939 F.3d 710, 723 (6th Cir. 2019)). The Fourth Circuit ruled that even though the arbitration was private, under the UK Arbitration Act of 1996, the arbitration was subject to governmental regulation and oversight, and therefore qualified as a “foreign tribunal” for purposes of § 1782. Finally, the Fourth Circuit stated that there was a built in protection for parties worried about excessive and expansive discovery in the United States, as any discovery under the statute is subject to the discretion of the district court and may be challenged by any interested respondent. Said another way, it is not an unfettered right to general discovery.
There are currently pending appeals in the Fifth Circuit, Ninth Circuit, and Seventh Circuit on this question. It is possible the issue will eventually make its way to the Supreme Court of the United States for further clarification and to resolve the circuit split. Until then, the ability to obtain discovery in aid of a foreign arbitration proceeding could vary from jurisdiction to jurisdiction (and even from Judge to Judge within the same district).
The Fourth Circuit’s opinion can be found here.
For assistance in obtaining discovery in aid of a foreign arbitration, please contact us at firstname.lastname@example.org