U.S. Court Of Appeals Makes U.S. Discovery Available In Aid Of International Commercial Arbitration

Author:Mr Craig I. Celniker, Sarah J. Thomas, David Hambrick and Erin P. Lupfer
Profession:Morrison & Foerster LLP
 
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On September 19, 2019, the United States Court of Appeals for the Sixth Circuit, for the first time, ruled that 28 U.S.C. § 1782 ("Section 1782") permits U.S. discovery in support of a private international commercial arbitration (i.e., involving privately constituted tribunals). The Sixth Circuit's decision has the potential to make U.S. discovery available in international arbitrations involving parties with a direct or indirect link to the United States. The decision creates a split among the U.S. circuits, setting the stage for the United States Supreme Court to weigh in on whether discovery in support of private international commercial arbitration should be available in all U.S. federal courts.

A. Background to Section 1782

Section 1782 allows U.S.-style discovery directed to a person or entity who "resides or is found" in the U.S. district where the application is sought "for use in a proceeding in a foreign or international tribunal." 28 U.S.C. § 1782(a). The tribunal or "any interested party" may request Section 1782 discovery. When faced with a Section 1782 application, the relevant U.S. district court must determine whether discovery is sought for use in a matter before a "foreign or international tribunal." The statute does not define the term.

The Second and Fifth Circuits considered the question of whether "foreign or international tribunal" included privately constituted tribunals in international commercial arbitrations in 1999 and held that it did not.1 The Second Circuit determined that, while "'foreign or international tribunal' does not unambiguously exclude private arbitration panels," the legislative history of Section 1782 reveals that Congress "intended to cover governmental or intergovernmental arbitral tribunals and conventional courts and other state-sponsored adjudicatory bodies."2 Therefore, the Second Circuit declined to apply Section 1782 to private international commercial arbitration.3 Shortly thereafter, the Fifth Circuit held the same on the basis that Congress intended "foreign or international tribunal," as used in Section 1782, to include "intentional government-sanctioned tribunals" but not "private international arbitrations."4 As a result, until the Sixth Circuit's recent decision, Section 1782 discovery appeared to be unavailable in private international commercial arbitration.

If the application is made for use in a proceeding involving a "foreign or international tribunal" (within the meaning...

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