Two recent decisions with an international flavor: First, Consorcio Ecuatoriano de Telecomunicaciones, S.A. v. JAS Forwarding (USA), Inc.: a party to a pending arbitration in Ecuador filed an application in federal district court under 28 U.S.C. § 1782 seeking discovery for use in the foreign arbitration proceeding. The U.S. Court of Appeals for the Eleventh Circuit affirmed the district court’s order permitting the discovery, holding that the Ecuadorean arbitration was a “proceeding in a foreign or international tribunal” under § 1782 because it acts as a first-instance adjudicative decisionmaker, it permits the gathering and submission of evidence, it has the authority to determine liability and impose penalties, and its decision is subject to judicial review.
Second, ESAB Group, Inc. v. Zurich Insurance PLC: a foreign insurance company issued global liability policies that provided coverage to a South Carolina manufacturer. The policies contained provisions requiring the resolution of disputes in Swedish arbitral proceedings in accordance with Swedish law. South Carolina has a statute that invalidates arbitration agreements in insurance policies. The insurer argued that the arbitration agreements were valid and enforceable under Chapter 2 of the Federal Arbitration Act, which enacts the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The manufacturer argued that pursuant to the McCarran-Ferguson Act, Chapter 2 of the FAA is “reverse-preempted,” and the arbitration agreements were invalid under South Carolina law. The U.S. Court of Appeals for the Fourth Circuit held that because McCarran-Ferguson is limited to domestic affairs, Chapter 2 of the FAA falls outside of its scope, and it affirmed the order compelling arbitration in Sweden.