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1782 Discovery Blog: The U.S. Supreme Court Will Consider Application Of §1782 Discovery To International Commercial Arbitration

by | May 4, 2021 | 1782 Blog

In Servotronics, Inc. v. Boeing Co., 954 F.3d 209, 210 (4th Cir. 2020) the Fourth Circuit recently held a private arbitration panel convened in England, is a “foreign or international tribunal” under § 1782(a) and, therefore, the district court has authority to permit discovery of Boeing employees in South Carolina in connection with that private arbitration.  The Sixth Circuit in Abdul Latif Jameel Transp. Co. v. FedEx Corp., 939 F.3d 710 (6th Cir. 2019), overruled a district court’s denial of an application by a Saudi corporation to take discovery from U.S. based FedEx Corporation for use in an arbitration proceeding in Dubai, under the rules of the Dubai International Financial Centre-London Court of International Arbitration.

The Fourth and Sixth Circuits were not persuaded by earlier decisions from the Second and Fifth Circuits, Republic of Kazakhstan v. Biedermann Int’l, 168 F.3d 880 (5th Cir. 1999) and National Broadcasting Co., Inc. v. Bear Stearns & Co., Inc., 165 F.3d 184 (2d Cir. 1999) that held that only “state sponsored” arbitrations fall within the scope of §1782.  Some district courts in other circuits have also permitted discovery for private international arbitration.  The United States Court for the Northern District of California in In HRC-Hainan Holding Co., LLC v. Yihan Hu, 2020 U.S. Dist. LEXIS 32125, at *11-12 (N.D. Cal. Feb. 25, 2020), which encompasses Silicon Valley, authorized discovery for use in private arbitration before the China International Economic and Trade Arbitration Commission.

However, the Seventh Circuit in Servotronics, Inc. v. Rolls-Royce PLC, 975 F.3d 689 (7th Cir. 2020), addressing the issue as a question of first impression, declined Servotronics’ request for discovery assistance in connection with a private arbitration in the United Kingdom.  On March 22, 2021, the Supreme Court agreed to hear Servotronics’ challenge to this decision on the presented issue of whether a party to a private, commercial foreign arbitration proceeding, such as one governed by the U.K. Arbitration Act and Rules of the Chartered Institute of Arbitrators, may apply for an order under Section 1782, as the Fourth and Sixth Circuits have held, or excludes such tribunals, as the Second, Fifth, and now the Seventh Circuit, have held.  There is no predicting which direction the Supreme Court will take and a decision may not come until 2022.

Thomas C. Sullivan is an attorney in the Philadelphia office of Marks & Sokolov LLC. Mr. Sullivan represents Western, Russian and Ukrainian clients in complex commercial disputes including civil RICO, securities fraud, Foreign Corrupt Practices Act, Convention on the International Sale of Goods and ICC Arbitration matters.  He has litigated numerous Section 1782 discovery matters throughout the United States and was recently published in Obtaining U.S. Discovery For Use In Non-U.S. Tribunals Pursuant To 28 U.S.C. § 1782 (Chapter 7), Juris Publishing, LLC, 2020.

 

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