United States: U.S. Court Of Appeals Makes U.S. Discovery Available In Aid Of International Commercial Arbitration

On September 19, 2019, the United States Court of Appeals for the Sixth Circuit, for the first time, ruled that 28 U.S.C. § 1782 ("Section 1782") permits U.S. discovery in support of a private international commercial arbitration (i.e., involving privately constituted tribunals). The Sixth Circuit's decision has the potential to make U.S. discovery available in international arbitrations involving parties with a direct or indirect link to the United States. The decision creates a split among the U.S. circuits, setting the stage for the United States Supreme Court to weigh in on whether discovery in support of private international commercial arbitration should be available in all U.S. federal courts.

A. Background to Section 1782

Section 1782 allows U.S.-style discovery directed to a person or entity who "resides or is found" in the U.S. district where the application is sought "for use in a proceeding in a foreign or international tribunal." 28 U.S.C. § 1782(a). The tribunal or "any interested party" may request Section 1782 discovery. When faced with a Section 1782 application, the relevant U.S. district court must determine whether discovery is sought for use in a matter before a "foreign or international tribunal."  The statute does not define the term. 

The Second and Fifth Circuits considered the question of whether "foreign or international tribunal" included privately constituted tribunals in international commercial arbitrations in 1999 and held that it did not.1 The Second Circuit determined that, while "'foreign or international tribunal' does not unambiguously exclude private arbitration panels," the legislative history of Section 1782 reveals that Congress "intended to cover governmental or intergovernmental arbitral tribunals and conventional courts and other state-sponsored adjudicatory bodies."2 Therefore, the Second Circuit declined to apply Section 1782 to private international commercial arbitration.3 Shortly thereafter, the Fifth Circuit held the same on the basis that Congress intended "foreign or international tribunal," as used in Section 1782, to include "intentional government-sanctioned tribunals" but not "private international arbitrations."4 As a result, until the Sixth Circuit's recent decision, Section 1782 discovery appeared to be unavailable in private international commercial arbitration. 

If the application is made for use in a proceeding involving a "foreign or international tribunal" (within the meaning of Section 1782), the relevant U.S. district court must evaluate the discovery request by considering four factors identified by the Supreme Court in Intel Corp. v. Advanced Micro Devices, Inc.5 Those factors or guiding principles are:

  • First, when the person from whom discovery is sought is a participant in the foreign proceeding . . . , the need for § 1782(a) aid generally is not as apparent as it ordinarily is when evidence is sought from a nonparticipant in the matter arising abroad. . . .
  • Second, . . . a court . . . may take into account the nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance. . . .
  • [Third], a district court could consider whether the § 1782(a) request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States. . . .
  • [Fourth], unduly intrusive or burdensome requests may be rejected or trimmed.6

B. Factual Background and the District Court Decision

In Abdul Latif Jameel Transportation Company Limited v. FedEx Corporation,7 Saudi Arabian company Abdul Latif Jameel Transportation Company Limited (ALJ) was engaged in two separate private commercial arbitrations with FedEx International Incorporated ("FedEx International") arising from two service contracts. Both contracts contained arbitration clauses: one provided for arbitration in Dubai under the rules of the Dubai International Financial Centre London Court of International Arbitration (DIFC-LCIA), while the other provided for arbitration in Saudi Arabia under the rules and laws of Saudi Arabia.

Asserting that FedEx International's parent company, FedEx Corporation ("FedEx"), was heavily involved in bringing about the dispute, ALJ filed an application for Section 1782 discovery in the United States District Court for the Western District of Tennessee, where FedEx is headquartered. The district court denied ALJ's application on the basis that the tribunals in the Dubai- and Saudi Arabia-seated arbitrations were not a "foreign or international tribunal" within the meaning of 28 U.S.C. § 1782(a). ALJ appealed.

C. The Sixth Circuit's Analysis

The Sixth Circuit reversed, holding that Section 1782 permits discovery for use in private international commercial arbitration because it falls within the definition of "tribunal." To reach its decision, the Sixth Circuit examined legal and English dictionary definitions of "tribunal" and the use of the term in legal writing around 1964, when the relevant language was added to Section 1782 by amendment. The Sixth Circuit concluded, "These sources show that American lawyers and judges have long understood, and still use, the word 'tribunal' to encompass privately contracted-for arbitral bodies with the power to bind the contracting parties."8 

Circuit Judge John Bush, writing for the court, also found support for this broader definition of "tribunal" in Intel, in which the Supreme Court permitted Section 1782 discovery in support of proceedings conducted by the Directorate-General for Competition of the Commission of the European Communities (the "Commission"), a non-judicial proceeding. Because the Commission "acts as a first-instance decisionmaker," the Supreme Court had "no warrant to exclude" the Commission "from § 1782's ambit."9 So, too, here, held the Sixth Circuit. In so finding, the Sixth Circuit rejected FedEx's argument, which relied on the Second and Fifth Circuit's 1999 holdings, that only parties to arbitrations involving governmental or intergovernmental arbitral tribunals may use Section 1782 discovery. The Sixth Circuit's reading of Intel found "no limiting principle suggesting that the ordinary meaning of 'tribunal' does not apply here."10 

The Sixth Circuit held that the Dubai-seated tribunal constituted under the DIFC-LCIA Arbitration Rules qualified as a "tribunal" under Section 1782 but stopped short of granting ALJ's application for Section 1782 discovery.11 Instead, the Sixth Circuit remanded the case back to the district court so that the district court could consider the application under the Intel factors. 

D. A New Avenue for Discovery in International Arbitration

The Sixth Circuit's holding opens the door for U.S. federal courts to order discovery under Section 1782 in support of private international commercial arbitration. Section 1782 provides that any "interested party" may apply for discovery if the person or entity from whom discovery is sought resides "or is found" in the U.S. district. What it means to be "found" in a U.S. district will be subject to interpretation, but there is potential for broad interpretation. However, the Sixth Circuit's decision is not without limits. A district court reviewing a Section 1782 application must first apply the four Intel factors described above, which allow the court broad discretion. 

E.  Supreme Court Review

By including tribunals constituted in private international commercial arbitrations within the definition of a "foreign or international tribunal," the Sixth Circuit broke from two sister circuits: the Second and Fifth Circuits.12 If FedEx appeals, the Supreme Court may grant certiorari so that it can resolve this split. That way, the Supreme Court could provide definitive guidance on the meaning of "foreign or international tribunal." Until then, international parties should be aware that Section 1782 discovery may be available in private international arbitration, where a party "resides" or can be "found" in the Sixth Circuit—or in any other U.S. jurisdiction that decides to follow the Sixth Circuit's reasoning. 


1 Nat'l Broad. Co., Inc. v. Bear Stearns & Co., Inc., 165 F.3d 184 (2d Cir. 1999); Republic of Kazakhstan v. Biedermann Int'l, 168 F.3d 880 (5th Cir. 1999).

2 Nat'l Broad. Co. v. Bear Stearns & Co., 165 F.3d at 188, 190 (emphasis in original).

3 Id. at 191 ("In sum, policy considerations of some magnitude reinforce our conclusion, based upon an analysis of the text and legislative history of § 1782, that Congress did not intend for that statute to apply to an arbitral body established by private parties."). 

4 Republic of Kazakhstan v. Biedermann Int'l, 168 F.3d at 882-83. 

5 542 U.S. 241 (2004).

6 Id. at 264-65 (internal quotations and citations omitted).

7 No. 19-5315 (6th Cir. Sept. 19, 2019).

8 No. 19-5315, Slip Op. at 14. 

9 Id. at 258. 

10 No. 19-5315, Slip Op. at 19.

11 The Sixth Circuit addressed the availability of Section 1782 discovery only as to the Dubai-seated tribunal because the application of Section 1782 to the Saudi Arabia-seated tribunal was rendered moot when the tribunal issued an award dismissing ALJ's claims shortly before the Sixth Circuit appeal.  No. 19-5315, Slip Op. at 5-7.

12 See Nat'l Broad. Co., Inc. v. Bear Stearns & Co., Inc., 165 F.3d at 190 (concluding that term "tribunal" includes only "governmental or intergovernmental arbitral tribunals and conventional courts and other state-sponsored adjudicatory bodies"); Republic of Kazakhstan v. Biedermann Int'l, 168 F.3d at 882 (same).

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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