The Fourth Circuit Joins the Sixth in Approving Discovery in Aid of International Arbitration Tribunals Pursuant to 17 U.S.C. § 1782

April 13, 2020

Last September in In Re: Application To Obtain Discovery For Use In Foreign Proceedings, Abdul Latif Jameel Transp. Co. v. FedEx Corp., et al, 939 F.3d 710 (6th Cir. 2019), the Sixth Circuit became the first U.S. Court of Appeals to decide that Section 28 U.S.C. § 1782 enables parties to seek assistance with discovery for use in a private commercial arbitration

Prior to Abdul Latif Jameel, the Second Circuit and the Fifth Circuit had found that Section 1782 does not apply to private arbitration because international commercial arbitration tribunals are not “foreign or international tribunals” within the meaning of Section 1782.  See NBC v. Bear Stearns & Co., 165 F.3d 184 (2d Cir. 1999); Republic of Kazakhstan v. Biedermann Int’l., 168 F.3d 880 (5^th Cir. 1999).  In discussing those cases, the Sixth Circuit said that it was not convinced by their reasoning regarding the plain meaning of “tribunal” or by their analysis of the legislative history. 

The Sixth Circuit also focused on the Supreme Court’s decision in Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004), in which the Supreme Court granted Section 1782 discovery in a non-judicial proceeding before the European Directorate General for Competition (“the Commission”), and which post-dates NBC and Republic of Kazakhstan.  In Intel, the Supreme Court held that the meaning of “foreign or international tribunal” did not exclude the Commission, to the extent it acts as a first-instance decisionmaker.  Intel, 542 U.S. at 258.  The Supreme Court also pointed out that, in 1964, Section 1782 had been amended to replace the phrase “in any judicial proceeding pending in any court in a foreign country” with “in a proceeding in a foreign or international tribunal,” which suggested a broadening of the scope of Section 1782 beyond traditional judicial proceedings.  Id. at 248.  The Sixth Circuit thus reasoned that, while Intel does not compel the inclusion of private arbitration within the scope of Section 1782, nothing in Intel caused the Sixth Circuit to doubt its textual analysis.

The Fourth Circuit has now joined the Sixth in authorizing parties in private commercial arbitration to seek discovery in the United States pursuant to Section 1782.  Servotronics v. The Boeing Company, et al, 2020 WL1501954 (4^th Cir., March 30, 2020).  Servotronics involved a request to obtain testimony from residents of South Carolina in support of an arbitration pending in the United Kingdom under the rules of the Chartered Institute of Arbitrators.  The Fourth Circuit, citing the Sixth Circuit’s decision in Abdul Latif Jameel with approval, held that the English arbitration tribunal was an international tribunal within the meaning of Section 1782. 

The Fourth Circuit, in Servotronics, arguably went further than the Sixth Circuit did in Abdul Latif Jameel.  The Sixth Circuit held that international commercial arbitration tribunals were “foreign or international tribunals” within the scope of Section 1782 because the term should be given its ordinary dictionary meaning which is not limited to government sponsored tribunals.  The Fourth Circuit, instead, in response to an argument by Boeing that “tribunal” as used in Section 1782 refers only to an entity that exercises government-conferred authority, held that U.S. arbitration tribunals have government-conferred authority pursuant to the FAA.  Likewise, the Fourth Circuit said, arbitration tribunals in England have government-conferred authority under the 1996 UK Arbitration Act.  Thus, the Fourth Circuit concluded, even if it were to apply the more restrictive definition of “foreign or international tribunal” adopted by the earlier Bear Stearns and Biedermann cases that “tribunal” under Section 1782 only extends to entities acting with authority of the state, it would find that international arbitration tribunals are “tribunals” within the scope of Section 1782.

With two courts of appeals now having approved the use of Section 1782 in support of international commercial arbitration and two courts of appeal having rejected it, the issue may eventually be finally resolved by the United States Supreme Court.  Notably, there are two additional cases pending in other circuit courts of appeal that may further develop the issue.  Servotronics is appealing another rejection of a 1782 petition based on the same underlying case as the Fourth Circuit decision in the Seventh Circuit, and that appeal has been pending for nearly a year.  In re Servotronics, Inc., No. 1:18-cv-07187 (N.D. Il. 2019), appeal filed sub nom., Servotronics v. Rolls Royce PLC, No. 19-1847 (7^th Cir.).  Also, the recent grant by a federal district court in California of a 1782 petition in support of a commercial arbitration in China is now on appeal before the Ninth Circuit.  HRC Hainan Holding Co., LLC v. Yihan Hu, 2020 WL 906719 (N.D. Cal. February 25, 2020), appeal, No. 20-15371(9^th Cir.).

Author: Sherman Kahn