Section 1782 of Title 28 of the U.S. Code enables district courts to order a person to provide testimony or to produce documents at the request of a foreign “tribunal” for use in a proceeding before that “tribunal.”1 Section 1782, however, leaves the scope of the term “tribunal” open. The question thus arises whether arbitral panels qualify as “tribunals” for purposes of Section 1782. On surveying the case law, one commentator suggested that a “majority” of U.S. courts have held that “at least some species” of international arbitral panels qualify as “tribunals” within the meaning of 1782.2 This assertion does not shed light on when and why a district court might decide that an arbitral panel qualifies as a “tribunal.”

To these latter questions, there are no simple answers. Courts have developed divergent tests for evaluating the status of arbitral panels. The minority position recognizes only public arbitral panels as tribunals; the majority position recognizes both public and private arbitral panels as tribunals for purposes of Section 1782.

This division between these two positions arises because Supreme Court dicta in Intel v. Advanced Micro Devices3 stands in tension with precedent in the U.S. Court of Appeals for both the Second and Fifth circuits. In Intel, the Supreme Court advanced a broad reading of the term “tribunal” that suggested to many lower courts that private arbitral panels could qualify as tribunals. By contrast, the Fifth Circuit has explicitly excluded private arbitral panels from the scope of tribunals, as does the Second Circuit.4 Since Intel did not directly overrule cases in either of those circuits, tension remains in the case law.

This article follows a historical trajectory, beginning with the language and history of Section 1782. It then examines precedent that excludes private arbitral panels from the meaning of “tribunal.” It will also examine dicta in Intel, which establishes the basic rationale for accepting a broader reading of “tribunal.” To reconcile these two positions, the article seeks to state clearly which courts recognize private arbitral panels as “tribunals” and to explain why, as a matter of policy, they do so.

Significantly, even where courts hold that an arbitral panel may qualify as a tribunal, the court need not always grant discovery. Qualifying as a tribunal is a condition precedent to the court’s exercise of discretion. If the court concludes, however, that granting discovery would frustrate the purposes of arbitration, it may recognize the panel as a tribunal but refuse to grant discovery on equity or policy grounds.

Language and History

Section 1782(a) provides that “[t]he district court of the district in which a person resides…may order him to give his testimony…or to produce a document for use in a proceeding in a foreign or international tribunal…. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign tribunal or upon the application of any interested person.” By its language, the statute grants discretion to federal district courts to aid foreign tribunals or litigants in foreign proceedings by providing access to information that may not be obtainable in the foreign jurisdiction.

The language of 1782 has not always been this broad. Prior to 1964 revisions, Section 1782 had referred to judicial proceedings pending before “a court in a foreign country.”5 As the Supreme Court pointed out in Intel, the substitution of the word “tribunal” for the words “court” or “judicial proceeding” reflected an attempt to broaden the scope of the statute’s reach.6 Thus, there is some evidence in the changed language alone that Congress intended to expand the sweep of 1782.

Fifth and Second Circuits

Courts in the Second and Fifth circuits have limited the reach of Section 1782 to exclude arbitration proceedings. In Republic of Kazakhstan v. Biedermann International,7 the Fifth Circuit held that private arbitral panels are not included under the language of Section 1782. The court provided two central reasons. First, examination of the history of the statute led to the conclusion that the revisions sought to “facilitate discovery for international government-sanctioned tribunals.”8 Such an intention does not extend to private arbitral bodies. Second, providing help to international private arbitral bodies could grant them broader discovery ability than would apply in domestic arbitration. These two factors, taken together, led the court to conclude that Section 1782 could not be exploited by parties involved in private arbitration.

In a similar vein, the Second Circuit in NBC v. Bear Stearns9 held that private arbitral tribunals are not included in Section 1782, for two reasons. First, the court held, Congress did not intend to include such panels under the heading of “tribunal.” Second, the purpose of arbitration is to provide a speedy and efficient resolution of disputes. Extending broader discovery rights to parties in such proceedings may inhibit achievement of that goal.

Supreme Court in ‘Intel’

The dispute in Intel arose out of antitrust claims brought by Advanced Micro Devices (AMD) against Intel in Europe. AMD lodged a complaint against Intel before the Competition Bureau of the European Commission. To bolster its claims, AMD petitioned to compel Intel to produce documents produced by Intel in prior litigation.

The Supreme Court, which ultimately considered the request, addressed the scope of the word “tribunal.” Relying on legislative history and an article written by Professor Hans Smit, a drafter of the 1964 revisions to Section 1782, the Supreme Court suggested that the term “tribunal” should extend to cover many “quasi-judicial” tribunals.10 In his article, Smit suggested (and the court quoted approvingly) that “the term ‘tribunal’…includes investigating magistrates, administrative and arbitral tribunals, and quasi-judicial agencies, as well as conventional civil, commercial, and administrative courts” in addition to the European Court of Justice.11

The Intel court identified three factors to consider in determining whether a body qualifies as a “tribunal” for the purposes of Section 1782: (1) whether the decision of the panel will lead to a dispositive ruling (a written, binding decision); (2) whether the proceeding is “responsive to a complaint”; and (3) whether the decision is reviewable in court. Each of these factors tends to show that an adjudicative body is a “tribunal.”

The factors cited by the Supreme Court in Intel do not distinguish between public and private tribunals. Rather than looking to the formal designation of the tribunal, the Supreme Court urged courts to investigate the underlying functions performed by the panel. This kind of functional analysis runs counter to the approach offered by the Second and Fifth circuits. This part of the Intel opinion, however, technically constituted dicta, and since the Supreme Court did not expressly overrule either NBC or Republic of Kazakhstan, those precedents remain extant in their respective circuits.

Cases Since ‘Intel’

Most district courts have followed the lead of the Supreme Court. As a basic guideline, the more public the tribunal, the more likely a district court is to treat it as falling under the ambit of Section 1782. Thus, for instance, if the arbitral panel is convened under the auspices of a Bilateral Investment Treaty (BIT)— i.e., if it is created by an agreement between two nations—then the court will treat it as a tribunal. Likewise, if the panel follows UNCITRAL rules, it is more likely to qualify as a tribunal.12

Three cases illustrate this tendency. In In re Application of Veiga,13 the court allowed discovery for a tribunal convened according to the demands of a BIT and that followed UNCITRAL rules. Likewise, in Chevron v. Shefftz,14 the court held that an international panel operating under rules of UNCITRAL qualified as a foreign tribunal.15

Finally, OJSC Ukrnafta v. Carpatsky Petroleum16 demonstrates that even courts in the Second Circuit may question precedent limiting the reach of Section 1782. The court in OJSC determined that a proceeding was sufficiently “public” to fall within the scope of the term “tribunal” because the proceeding was “government sanctioned,” and governed by UNCITRAL rules. The court in OJSC also relied on the fact that any decisions of the arbitral panel would be reviewable in court.

At least one court has gone further, asserting that there is no principled distinction between public and private arbitral panels. In In re Babcock Borsig,17 the court held that the ICC (a private arbitral body) qualifies as a tribunal for purposes of Section 1782. This Babcock opinion explicitly rejected the reasoning in NBC and Republic of Kazakhstan because of Intel.18 The Babcock court asserted that “there is no textual basis upon which to draw a distinction between public and private arbitral tribunals, and the Supreme Court in Intel repeatedly refused to place categorical limitations on the availability of [Section] 1782(a).”19

The Babcock case emphasized the first Intel factor. The court placed significant emphasis on the fact that the arbitral panel was a “first-instance decision-maker” and that its rulings were dispositive.20 This holding highlighted how courts weigh the various Intel factors. The fact that a panel makes a dispositive decision affecting the rights of parties may weigh more heavily than the particular procedural rules followed by a panel.

Courts in the Fifth Circuit, however, remain hesitant to extend Section 1782. Explicitly recognizing that their line of precedent has not been overturned, they often refuse to permit discovery to parties involved in private arbitrations abroad. In El Paso v. La Comision Ejecutiva Hidroelectrica Del Rio Lempo,21 the Fifth Circuit held, in an unpublished decision, that an arbitrated panel is not a tribunal for purposes of Section 1782.

The court relied on the reasoning outlined in Republic of Kazakhstan: the danger of conflict between 28 U.S.C. Section 1782 and 9 U.S.C. §7 (which restricts discovery for domestic arbitration). Further, the El Paso court suggested, permitting discovery may frustrate an essential purpose of arbitration, to provide a speedy alternative to litigation. Finally, the court observed that Intel simply did not resolve the question of discovery with respect to private arbitral panels.

Likewise, in In re Application of Operadora DB Mexico S.A. de CV,22 the U.S. District Court for the Middle District of Florida held that an ICC panel is not a foreign tribunal because (1) the plain language of Section 1782 does not require the court to so hold, and (2) functionally, panel decisions should be reviewable in court in order to qualify as “tribunals” and arbitration awards are subject to only limited judicial review. The court also suggested that parties might attempt to exploit Section 1782 to gain unfair advantage.23

Conclusion

Because the Supreme Court has not directly addressed the question of private arbitral panels, their status under Section 1782 remains unclear. Although courts recognize public arbitral panels as falling under the ambit of Section 1782, the Fifth Circuit and at least some courts within the Second Circuit do not recognize private arbitral panels as falling under Section 1782. Courts look to the factors outlined in Intel to determine the status of a particular arbitral panel.

Of course, even if a panel qualifies as a tribunal, a U.S. court may not always grant discovery. Courts look to the difference in character between arbitration and litigation in deciding whether to permit discovery. Where it becomes evident that the advantages of arbitration may be stymied by discovery, courts may refuse to grant discovery.24 Likewise, where it is evident that one party seeks to exploit U.S. courts for tactical advantage in a foreign proceeding, the court may also refuse discovery.25

Steven C. Bennett is a partner at Jones Day in New York. Stephen P. Farrelly, a summer associate at the firm, assisted in the preparation of this article.

Endnotes:

1. 28 U.S.C. 1782 provides that “[t]he district court of the district in which a person resides…may order him to give his testimony…or to produce a document for use in a proceeding in a foreign or international tribunal…. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign tribunal or upon the application of any interested person.”

2. Tyler Robinson, “The Extraterritorial Reach of 28 U.S.C. §1782 in aid of Foreign and International Litigation and Arbitration,” 22/2 The American Review of International Arbitration 135, 136 (2011).

3. 542 U.S. 241 (2004).

4. For an example from the Fifth Circuit, see Republic of Kazakhstan v. Biedermann International, 168 F.3d 880 (5th Cir. 1999). For an example from the Second Circuit, see National Broadcasting v. Bear Stearns, 165 F.3d 184 (2d Cir. 1999).

5. Act of May 24, 1949, ch. 139, §93, 63 Stat. 89, 103 (1949).

6. Intel, 542 U.S. at 258.

7. 168 F.3d 880 (5th Cir., 1999).

8. Id. at 882; (emphasis added).

9. 165 F.3d 184 (2d Cir. 1999).

10. 542 U.S. 241 (2004).

11. 542 U.S. at 258 (citing Hans Smit, International Litigation Under the U.S. Code, 65 Colum. L. Rev. 1015, 1027 (1965))

12. The text of the UNCITRAL Arbitration Rules appear at www.uncitral.org.

13. 2010 WL 4225564 (D.D.C. 2010) at *8-9.

14. 2010 WL 4985663 (D. Mass. 2008).

15. This case sets a baseline in the District of Massachusetts: so long as a proceeding adheres to UNCITRAL rules, the panel qualifies as “public” and hence as falling under the auspices of Section 1782. (at *260).

16. 2009 WL 2877156 (D. Conn. 2009).

17. 583 F.Supp.2d 233 (D. Mass. 2008).

18. (Id. at 239).

19. (Id.; internal citations omitted.)

20 (Id. at 238).

21. 341 Fed. App’x. 31 (5th Cir. 2009).

22 2009 WL 2423138 (M.D. Fla., Aug. 4, 2009).

23. In addition to undermining the efficiency of arbitration, allowing discovery might suggest “a party’s attempt to manipulate U.S. court proceedings for tactical advantage” (at *4).

24. Intel, 542 U.S. at 264-265: “[A] district court is not required to grant a §1782(a) discovery application simply because it has the authority to do so…. Also, unduly intrusive or burdensome requests may be rejected or trimmed.”

25. Id.: “Specifically, a district court could consider whether the §1782(a) request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States.”