In one of the most anticipated international arbitration-related court decisions in years, a federal court ruled that parties may be ordered to produce evidence in foreign international arbitrations. Departing from its sister courts, the 6th U.S. Circuit Court of Appeals on Sept. 20, 2019, held that U.S. federal courts can order parties to turn over evidence in international commercial arbitrations abroad under Section 1782 of the United States Code.
In relevant part, the statute at issue provides that:
The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation.
—28 U.S.C. § 1782(a) (emphasis added)
Prior 2nd and 5th Circuit decisions found that the word “tribunal” in the statute was not intended to authorize federal courts to assist discovery in foreign international arbitrations. (See Republic of Kazakhstan v. Biedermann Int’l, 168 F.3d 880, 883 (5th Cir. 1999); see also National Broadcasting Co., Inc. v. Bear Stearns & Co., Inc., 165 F.3d 184, 190 (2d Cir. 1999).) Finding the scope of the word ambiguous, the 2nd and 5th Circuit courts reviewed the statute’s legislative history and policy considerations before determining that “tribunal” refers only to “governmental or intergovernmental arbitral tribunals and conventional courts and other state-sponsored adjudicatory bodies.” (See NBC, 165 F.3d at 190; see also Biedermann, 168 F.3d at 882.)
Unpersuaded, the 6th Circuit — guided by a Thomas Jefferson quote requiring reason to be fixed “firmly in her seat, and call to her tribunal every fact, every opinion” — examined dictionary definitions, the word’s usage in legal writing, and its use throughout the statute to reach a different conclusion: “tribunal” in § 1782(a) encompasses private, contracted-for commercial arbitrations.
This analysis arose in a case that originated from an arbitration administered by the Dubai International Financial Centre-London Court of International Arbitration (DIFC-LCIA) between Abdul Latif Jameel Transport Co. Ltd. (ALJ), a Saudi corporation, and FedEx, a U.S.-based corporation. ALJ filed a § 1782(a) discovery application in the U.S. District Court for the Western District of Tennessee, where FedEx is headquartered, seeking a subpoena for documents and deposition testimony of a FedEx corporate representative. Reversing the district court’s denial, the 6th Circuit ruled that the DIFC-LCIA arbitration panel constituted a “tribunal” under the statute and thus the district court may order § 1782(a) discovery for use in the proceeding before that panel. Accordingly, the 6th Circuit remanded the matter back to the district court to reconsider whether ALJ’s application should be granted in accordance with the U.S. Supreme Court decision in Intel Corp. v. Advanced Micro Devices Inc., 542 U.S. 241 (2004).
Clearly, the 6th Circuit’s decision creates a circuit split as to the application of § 1782(a) in private, international arbitration. And the split may get wider soon: A pending discovery dispute before the 7th Circuit requires the court to determine the scope of “tribunal” in relation to a private, UK arbitration between Servotronics Inc. and Boeing Co. Until the Supreme Court steps in to provide clarity and resolve the split, district courts within the 6th Circuit — and other U.S. Circuit Courts of Appeals that may adopt its interpretation — can expect an influx of litigants embroiled in foreign commercial arbitrations seeking intervention through the vehicle of § 1782. In other words, stay tuned!