This browser is not actively supported anymore. For the best passle experience, we strongly recommend you upgrade your browser.
viewpoints
Welcome to Reed Smith's viewpoints — timely commentary from our lawyers on topics relevant to your business and wider industry. Browse to see the latest news and subscribe to receive updates on topics that matter to you, directly to your mailbox.
| 2 minutes read

The Supreme Court Bars International Arbitration from Sec. 1782 Discovery


The Supreme court has acknowledged that “Congress has long allowed federal courts to assist foreign or international adjudicative bodies in evidence gathering.”  ZF Automotive Us, Inc., Et Al. V. Luxshare, Ltd., No. 21–401, slip op. at 1 (S.Ct. June 13, 2022). The current iteration of the statute permitting such assistance, 28 U.S.C. §1782, “permits district courts to order testimony or the production of evidence under the broad US discovery rules ‘for use in a proceeding in a foreign or international tribunal.’” Id.  

On June 13, 2022, the U.S. Supreme Court addressed the conflict in the circuits regarding whether Section 1782 applies to international arbitration tribunals.  It held that it does not. Id. at 1.  The issue the Court addressed was whether a “foreign or international tribunal” includes private adjudicative bodies (such as international arbitration tribunals) or only governmental or intergovernmental bodies.  Id. at 5.   The court construed the operative language in Section 1782 as follows:  

“[F]oreign tribunal” and “international tribunal” complement one another; the former is a tribunal imbued with governmental authority by one nation, and the latter is a tribunal imbued with governmental authority by multiple nations.  

Id. at 9.  The Court recognized that the statutory history of section 1782 sought the improvement of “the rendering of assistance to foreign courts and quasi-judicial agencies,” and did not reference private adjudicative bodies such as arbitration tribunals.  Id. at 10.  International arbitration tribunals are private adjudicatory bodies not imbued with such governmental authority.  Id. at 11. 

Further, Section 1782 provides much broader U.S.-style discovery than provided by the FAA. Id. at 11 (citing as examples differences in who can request discovery and the availability of prearbitration discovery).  Extending Section 1782 to international arbitration tribunals would create a mismatch in the scope of permissible discovery between domestic and international arbitration under which international arbitration would have much broader litigation-style discovery rights. Id.   

The tribunal summarized its reasoning as follows: 

In sum, we hold that §1782 requires a “foreign or international tribunal” to be governmental or intergovernmental. Thus, a “foreign tribunal” is one that exercises governmental authority conferred by a single nation, and an “international tribunal” is one that exercises governmental authority conferred by two or more nations. Private adjudicatory bodies do not fall within §1782. 

Id. at 11.  To ensure that the issue was fully settled, the opinion was issued on a consolidation of two proceedings, one was a traditional international commercial arbitration, and the other was an investor/state UNCITRAL proceeding under a bilateral investment treaty. Id. at 13-16 (finding that neither type of arbitration tribunal was imbued with governmental authority).   

Accordingly, Section 1782 discovery is no longer available in support of international arbitration proceedings.    

Tags

arbitration, discovery, section 1782

Latest Insights