One of the challenges for parties and counsel in international arbitration is obtaining evidence from third parties because arbitral tribunals generally lack the authority to compel third parties to produce evidence. However, when the third parties are located in the United States and the seat of the arbitration is outside of the United States, there may now be an opportunity to obtain third party discovery in private international commercial arbitration. In a recent decision, the US Court of Appeals for the Eleventh Circuit resolved a disputed issue of law and decided that parties in international commercial arbitration may petition the district court in the United States to take discovery from third parties located in the district. The decision is binding on the courts in the Eleventh Circuit, which includes the states of Florida, Georgia and Alabama, and will likely be influential in other circuits in future determinations on the availability of US discovery in private international commercial arbitration proceedings.

Section 1782 of Title 28 of the United States Code has attracted attention from parties and counsel in international arbitration. Section 1782 permits “any interested person” to seek from a United States district court a discovery order directing a person located within the district to produce documents, other tangible evidence, and testimony “for use in a proceeding in a foreign or international tribunal.” A number of US courts, including the Second Circuit and Fifth Circuit courts of appeals, have limited the application of § 1782, deciding that the judicial assistance of US courts is not available to obtain evidence for use in private international arbitration proceedings. According to these courts, a “foreign or international tribunal” does not include an international arbitration tribunal.1

Subsequently, the 2004 ruling of the US Supreme Court in Intel Corp. v. Advanced Micro Devices, Inc., provided seminal guidance on the scope of § 1782.2 The Supreme Court endorsed a broad interpretation of the term “tribunal” and refused to impose “categorical limitations” on the application of this statute. In determining whether the Directorate-General for Competition of the European Commission was a “tribunal” under § 1782, the Supreme Court reviewed its functions to consider: (i) whether the body acted as a first-instance adjudicative decision maker; (ii) whether it permitted the gathering and submission of evidence; (iii) whether it had the authority to determine liability and impose penalties; and (iv) whether its decision was subject to judicial review. Applying this functional analysis, the Supreme Court decided that the Directorate- General functioned as a “foreign tribunal” and therefore fell within the scope of § 1782.3 The Supreme Court did not analyze or decide whether an international arbitral tribunal is a “tribunal” under the statute.

Since Intel, courts have split on the question whether the Supreme Court’s decision and statutory construction mandate inclusion of international arbitral tribunals within the ambit of § 1782. Courts have been more willing to provide judicial assistance in aid of inter-governmental arbitral tribunals than to private international arbitrations conducted under the auspices of private arbitration institutions.4

The Eleventh Circuit recently became the first US appellate court to rule that § 1782 can be utilized to obtain evidence for use in a proceeding before a private international arbitration tribunal. In Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., a buyer of transportation logistics sought discovery in Florida for use in a private arbitration proceeding pending against the buyer in Ecuador.5 The court applied Intel’s functional analysis and held that the private arbitration tribunal was a “tribunal” under § 1782 because (i) it acted as a first-instance adjudicative decision maker; (ii) it permitted the gathering and submission of evidence; (iii) it had the authority to determine liability and impose penalties; and (iv) its final award was subject to judicial review in Ecuadorian courts, albeit review that does not extend to the merits and is largely limited to procedural defects in arbitration proceedings and other constitutional challenges.6 Hence, the Eleventh Circuit has now opened the door to a broader use of § 1782 to reach not only “statesponsored” tribunals, but also private arbitral tribunals.

Importantly, however, even where § 1782 statutory requirements are met, the district court retains discretion to decide whether or not to provide assistance. The court must weigh a number of discretionary factors set forth by the Supreme Court in Intel. Thus, for example, courts are more likely to provide judicial assistance against a nonparty in international arbitration than against a party over whom a foreign tribunal can exercise jurisdiction. The court is less likely to order discovery where it believes that the foreign tribunal will not be receptive to the obtained evidence. The court will also consider whether a request is an attempt to circumvent foreign proof-gathering restrictions or other policies. In addition, the court may limit the scope of burdensome discovery. Therefore, the potential success of a § 1782 discovery application will depend not only on whether the court considers private international arbitral tribunals to fall within § 1782, but also on the circumstances of the particular case as to which the court may exercise discretion.

While the debate over the interpretation of § 1782’s application to a “foreign or international tribunal” continues, and will ultimately have to be resolved by the US Supreme Court, the Consorcio decision is significant. It may influence other US federal courts of appeals in other circuits faced with the same question of statutory construction, and in the meantime, while waiting for the Supreme Court to resolve the debate, it provides an opportunity to take discovery in aid of private international commercial arbitration proceedings of third parties located within its jurisdiction.