It frequently occurs that critical evidence, needed for the resolution of a dispute abroad, is located in the United States. A key witness may reside in the U.S., or important financial or other documentary evidence may be found only in this country. As we have discussed in previous articles, section 1782 of Title 28 of the United States Code ("section 1782") offers a powerful tool for the collection of evidence in the U.S. for use in foreign legal proceedings. The statute allows either a foreign tribunal or a party to foreign proceedings to request a federal court to direct that a witness be examined or evidence disclosed for purposes of a foreign proceeding. No doubt, with the growth of global commerce and the concomitant growth of international disputes, section 1782 has become an increasingly important tool for litigants and legal practitioners worldwide. The value of the statute in connection with foreign court proceedings or similar judicial or quasi-judicial proceedings has been conclusively demonstrated.

There remains an important open question, however, whether section 1782 may be used to collect evidence in the U.S. for foreign private arbitrations to which a governmental entity is not a party.

In June 2012, the U.S. Court of Appeals for the Eleventh Circuit held that section 1782 may be used to collect evidence for use in purely private foreign arbitrations.1 The effect of that ruling, however, is geographically limited, and the decision is binding authority only within the jurisdictional boundaries under that court's purview (Georgia, Alabama, Florida). The Second and Fifth Circuits have ruled to the contrary, and the jurisdictional effect of those courts' rulings is similarly geographically limited (Second: New York, Connecticut, Vermont; Fifth: Texas, Mississippi, Louisiana). Moreover, various individual federal district courts in a number of federal circuits have reached divergent conclusions regarding whether section 1782 can be used to collect evidence for use in foreign private arbitrations. The end result is that, until the U.S. Supreme Court weighs in on the issue, the availability of section 1782 relief for purposes of foreign private arbitrations may depend in part on the geographical location within the U.S. where the witness or evidence is located.

In 2004, in Intel Corp. v. Advanced Micro Devices, Inc.,2 the U.S. Supreme Court clarified most of the rules applicable with respect to section 1782. Most significant among the court's rulings was that there is no requirement that the evidence sought in the U.S. pursuant to section 1782 be "discoverable" under the laws of the forum country. In other words, for purposes of most foreign proceedings, a foreign litigant may be able to obtain a broader range of evidence through section 1782 proceedings in the United States than might generally be obtained under the laws of the jurisdiction where the dispute is pending. For example, the pretrial deposition of a witness might be taken in the U.S. pursuant to section 1782, even if such depositions are not permitted under the laws of the forum state. Similarly, a foreign litigant might be able to seek production pursuant to section 1782 of broad classes of documents, notwithstanding that the forum state's laws might require a greater degree of specificity with respect to the documents requested.

The court also held that foreign legal proceedings need not actually be pending at the time of the section 1782 application, but need only be within reasonable contemplation. The court identified three statutory requirements for section 1782 relief, specifically: (1) the request for evidence must be made by a foreign or international tribunal or by any interested party; (2) the person to be examined or the evidence to be disclosed must be found within the district in which the federal district court sits; and, most important for the current discussion, (3) the evidence must be "for use in a proceeding in a foreign or international tribunal."

The court also made it clear, however, that even if the three requirements are met, the grant of section 1782 relief remains within the district court's discretion. Factors to be considered include: (1) whether the person from whom evidence is sought is a participant in the foreign proceeding (section 1782 relief generally being more appropriate where the person is not a party to the foreign proceedings); (2) the nature of the foreign tribunal and the character of the foreign proceedings, and the receptivity of the foreign government or court agency abroad to United States federal court judicial assistance; (3) whether the section 1782 request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States; and (4) whether the request is unduly intrusive or burdensome.

In Intel, the Supreme Court did not address the question whether a foreign arbitral body is a "foreign or international tribunal" for purposes of the final statutory requirement noted above. Rather, the question in that case was whether the Directorate-General of Competition of the European Communities ("DGC"), an antitrust enforcement unit of the European Union, qualified as such a tribunal. In finding the DGC to be a foreign tribunal within the meaning of section 1782, the court stressed that a DGC proceeding "leads to a dispositive ruling, i.e., a final administrative action both responsive to the complaint and reviewable in court." Since 2004, appellate and district courts have struggled to determine whether, applying such criteria, foreign arbitral panels may be considered foreign or international tribunals within the meaning of section 1782.

Many courts, both prior and subsequent to the Intel decision, have made a distinction between foreign private arbitrations on the one hand and arbitrations conducted pursuant to international treaty obligations or under international arbitration regimes on the other hand—finding section 1782 relief to be available with respect to the latter but not the former.

As noted above, however, a number of courts have taken the position that even private arbitrations not conducted pursuant to international treaty obligations or under international arbitration regimes fall within the meaning of "foreign tribunal" for purposes of section 1782.

An examination of the most recent cases reflects that courts have begun to focus on the availability of judicial review, one of the factors touched upon by the Supreme Court in the Intel decision, as perhaps the most important feature rendering an arbitral body a "foreign tribunal" within the meaning of the statute. Indeed, this seems to have been the approach taken by the Eleventh Circuit Court of Appeals a few months ago and by a number of lower district courts in various federal districts throughout the United States over the past two to three years. Thus, where the parties to a foreign private arbitration have been able to demonstrate that a contractual right or statutory scheme permits judicial review of an arbitration award, these courts have generally seemed willing to deem the arbitral body a foreign tribunal and thus to allow section 1782 discovery to proceed.

One corollary to an approach that stresses the importance of judicial review as a factor rendering an arbitral body a foreign tribunal for purposes of the statute is that, where it can be demonstrated that there is no opportunity for judicial review, section 1782 relief will very likely be denied. Thus, if an arbitration clause in a contract specifically prohibits the parties from seeking judicial review of any arbitration award, section 1782 relief may be unavailable—even in jurisdictions otherwise reading the statute broadly to include foreign private arbitrations. A threshold question in any specific case should therefore be whether there is a prohibition against judicial review in the governing contractual arbitration clause.

It remains an open question whether the courts that have focused on the availability of judicial review as the determinative factor rendering private arbitral bodies "foreign tribunals" for purposes of section 1782 are correct in their analysis. Stated differently, whether the U.S. Supreme Court, when ultimately faced with the question, will deem foreign private arbitral bodies to be "foreign tribunals" is not a foregone conclusion. In Intel, the Supreme Court was addressing the status of a quasi-governmental administrative body, the decisions of which would appear to have been subject to full judicial review—in essence to appellate review on all questions of law and fact. The scope of judicial review of arbitral decisions, however, is often quite strictly circumscribed by law, as it is in the U.S. and other jurisdictions—and indeed even under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Judicial involvement in the arbitration under such statutory schemes may therefore be limited to a kind of oversight of the arbitral process rather than the kind of judicial review the U.S. Supreme Court had in mind when it stressed such review as a characteristic feature of a "foreign tribunal" for purposes of section 1782.

The U.S. Supreme Court may also find that other considerations militate against a finding that foreign arbitral bodies are "foreign tribunals." For example, certain courts, including the U.S. Courts of Appeal for the Fifth and Second Circuits, have noted the anomaly that would arise if, through the use of section 1782, a participant in a foreign arbitration could obtain broader discovery than U.S. law would allow to a participant to a purely domestic U.S. arbitration. Similarly, allowing broad section 1782 discovery in connection with private arbitrations could be argued to undermine the simple and streamlined arbitral resolution of disputes for which parties have bargained.

Until the U.S. Supreme Court resolves the matter, we can only advise our clients and the legal counsel abroad with whom we cooperate that there is no easy answer at present to the question whether evidence may be gathered in the U.S. for use in a foreign private arbitration. A contractual provision prohibiting judicial review of an arbitral decision would likely make seeking such evidence an uphill battle. Even absent such a prohibition, however, the significantly different views on the issue expressed by various U.S. federal courts suggest that, for the time being, the precise geographical location of the witness or evidence will be one of the most important factors dictating whether section 1782 relief will be available. In light of the foregoing, the decision whether to seek evidence in the U.S. for use in a foreign private arbitration pursuant to section 1782 should be made only after both a review of the controlling contractual documents and close consultation with counsel.

Footnotes

1. Application of Consorcio Ecuatoriano de Telecomunicaciones S.A., 685 F. 3d 987 (11th Cir. 2012).

2. 542 U.S. 241 (2004).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.