Evidence gathering in aid of foreign proceedings: The US Supreme Court removes § 1782 from the toolkit for private arbitrations


Much has been written over recent years about 28 United States Code (USC) §1782. This is the US legislation that permits district courts to order the production of evidence or witness testimony “for use in a proceeding in a foreign or international tribunal.” 

§ 1782 has been seen by litigants in non-US proceedings as a unique and powerful tool for obtaining evidence from US residents. Given the US's traditionally broad approach to discovery, the identification of a relevant witness located in the US can enable a party to foreign proceedings to obtain significantly broader discovery than that which would have been available in the relevant domestic forum.

There have, however, been several areas of uncertainty about the precise scope and availability of § 1782, including whether or not private arbitrations should be rightly classified as "tribunals" within the meaning of §1782. 

Inconsistency in the US Courts

The last time the US Supreme Court considered § 1782 was in the 2004 case of Intel Corp. v. Advanced Micro Devices, Inc.. As the body at issue was the Commission of the European Communities, the Supreme Court was not required to decide whether or not a private arbitral body qualified as a "foreign or international tribunal". Nevertheless, in obiter commentsthe Court cited favourably academic commentary stating that the term "tribunal" included "investigating magistrates, administrative and arbitral tribunals, and quasi-judicial agencies, as well as conventional civil, commercial, criminal, and administrative courts” (emphasis added).

Since then, a deep divide has emerged between the various Courts of Appeals on this issue, with the Second and Fifth Circuits refusing to permit discovery for use in private commercial arbitrations, whilst the Fourth and Sixth Circuits supported a wider interpretation of § 1782.  For example, in March 2020, the Court of Appeals for the Fourth Circuit held in Servotronics, Inc. v. The Boeing Co that a commercial arbitration panel was a "foreign or international tribunal," and that US district courts may provide discovery assistance under § 1782.  A mere two months later, the Second Circuit came to the opposite conclusion in the case of In Re Guo.

The recent US Supreme Court decision

The issue was considered squarely by the Supreme Court in March 2022 when it heard together the cases of ZF Automotive US, Inc. v. Luxshare, Ltd (on appeal from the Sixth Circuit) and AlixPartners, LLP, et al. v. Fund for Protection of Investors’ Rights in Foreign States (on appeal from the Second Circuit).  The underlying facts of the two disputes are not relevant for the purposes of this article, save to say that the former was a private commercial DIS arbitration seated in Germany, and the latter was an ad hoc UNCITRAL arbitration initiated under a bilateral investment treaty.

The Supreme Court took a contextual approach to statutory interpretation. It observed that, although the word "tribunal" on its own would have borne a broad meaning that would not have excluded private arbitral panels, it was crucial that the meaning of the word was modified due to the use of the adjacent words "foreign or international".  Attached to these modifiers, the word "tribunal" was best understood as an adjudicative body that exercised government authority.  The Supreme Court went on to consider § 1782 from a purposive lens, noting that the relevant statute had always "been about respecting foreign nations and the governmental and intergovernmental bodies they create". 

Notably, the Court declined to make any reference to the public policy issues that had been ventilated at trial. Counsel in favour of the narrow interpretation warned against the US courts being flooded with discovery applications, while opposing counsel stressed that providing assistance to foreign-seated commercial arbitral tribunals through a broader interpretation would promote cross-border commercial arbitration and international comity.

Applying the definition it formulated, the Supreme Court concluded that neither of the arbitrations at issue in the cases before it fell within the scope of §1782.

International arbitration practitioners may be disappointed by the decision, which may encourage some parties to favour traditional court litigation over arbitration when considering dispute resolution clauses in their contracts. Nevertheless, the certainty provided by the decision should be welcomed after years of ambiguity and inconsistent judgments by the lower courts.

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