Many commercial disputes, including franchise disputes, are resolved by arbitration. Section 7 of the Federal Arbitration Act (the FAA) allows the arbitrator to issue a subpoena to a third-party witness, and that subpoena may be enforced by a federal court. As will be discussed, this rarely suffices as a discovery device because it has been interpreted narrowly and federal subject matter jurisdiction is challenging. Now the U.S. Supreme Court has eliminated the ability to obtain discovery in international dispute resolution that is not issued by a governmental entity. The challenging question is whether third-party discovery is available in private arbitration as a matter of right.

  • The Supreme Court limits discovery to foreign governmental tribunals.

Federal law, 28 U. S. C. Section 1782(a), is a provision authorizing a district court to order the production of evidence “for use in a proceeding in a foreign or international tribunal.” If the provision were interpreted to allow private arbitrations merely held in a foreign country to have a federal discovery mechanism, then the provision would create significant tension with the Federal Arbitration Act (FAA), which governs domestic arbitration, because Section 1782(a) provides broader discovery than the FAA allows.