Kleimar N.V., the plaintiff in a London arbitration against defendant Dalian Dongzhan Group Co. Ltd. (Dailan), filed an ex parte application with the New York District Court seeking the issuance of a discovery order and subpoena on Vale S.A., a third-party entity located in the United States. The District Court granted the application permitting discovery and asked that any challenges to the order be brought in a motion to quash. Kleimar subsequently served Vale with the subpoena and Vale moved to vacate the discovery order and quash the subpoena.
The principal issue in the case was whether the London Maritime Arbitration Association was a "foreign tribunal" under 28 U.S.C. § 1782, which permits a U.S. district court to approve the discovery over a person or entity found in the U.S. for use in a proceeding in a foreign or international tribunal. Putting aside Second Circuit precedent which had excluded private foreign arbitrations, the district court relied upon the 2004 U.S. Supreme Court case of Intel Corp. v. Advanced Miro Devices, Inc., wherein the Supreme Court's interpretation of § 1782 left open the possibility that a private foreign arbitration could fall within its scope. The Court also found that the third-party was located in New York for the purposes of § 1782 because it traded on the New York Stock Exchange, regularly filed forms with the Security and Exchange Commission and had significant ties to an American entity that conducted systematic and regular business in New York. As such, the Court deemed the requirements of § 1782 were met and denied Vale's motions. In re Ex Parte Application of Kleimar N.V., Case No. 16–mc–355 (USDC S.D.N.Y. Nov. 16, 2016).
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