Can You Take Discovery In The U.S. For Foreign Arbitrations? Maybe, Says The Sixth Circuit Court Of Appeals

Introduction

The U.S. Court of Appeals for the Sixth Circuit ruled on September 19, 2019 that U.S. District Courts may order individuals and entities within the United States to produce discovery requested for use in private arbitrations abroad. The decision arises out of a Saudi Arabian corporation's request for the production of documents and deposition testimony from a U.S.-based company under federal statute 28 U.S.C. §1782, which permits U.S. District Courts to order discovery "for use in a foreign or international tribunal." The Sixth Circuit tasked itself with determining whether a private arbitral panel abroad constituted a "foreign or international tribunal" as used in 28 U.S.C. §1782. The Court found that it did, but whether the discovery would actually be allowed under a four-factor test was remanded to the district court. This decision marks the first time the Sixth Circuit Court of Appeals has ruled on this issue and establishes a circuit split that may result in Supreme Court review. In the meantime, parties involved in foreign arbitral proceedings at least now have a potential pathway to obtaining U.S. discovery.

Summary of Decision

In Abdul Latif Jameel Transportation Company Limited v. FedEx Corporation, Saudi corporation Abdul Latif Jameel Transportation Company Limited ("ALJ") issued a subpoena requesting documents and deposition testimony of corporate representatives for U.S.-based FedEx Corporation ("FedEx") in its §1782(a) discovery application.1 The parties were involved in a commercial arbitration proceeding in Dubai under the rules of the Dubai International Financial CentreLondon Court of International Arbitration ("DIFC-LCIA"), arising out of a supply-chain contract dispute. 2 The U.S. District Court for the Western District of Tennessee denied ALJ's application, "holding that the phrase 'foreign or international tribunal' in §1782 did not encompass [...] the [...] arbitrations." 3 ALJ appealed the District Court ruling, arguing that the phrase "foreign or international tribunal" does include such proceedings and that its discovery request should be granted. 4 FedEx argued that the commercial arbitration at issue did not constitute a "foreign or international tribunal," relying on Supreme Court precedent in Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004), and other precedent. 5 The Sixth Circuit Court of Appeals, however, agreed with ALJ, ruling that the arbitration did constitute a tribunal under...