Discovery Under Section 1782 Denied Based on Finding That Chinese Arbitration Organization Was Not a “Foreign or International Tribunal”
Section 1782(a) permits a person to seek a court order for the production of documents for use “in a proceeding in a foreign or international tribunal. …” To obtain discovery under the statute, the petitioner must meet three requirements: (1) the person from whom discovery is sought must reside or be found in the district where the application was made; (2) the discovery must be for use in a foreign proceeding before a foreign or international tribunal; and (3) the applicant must be either a foreign tribunal or an interested person.
Here, the court relied on precedent in the Second Circuit holding that when Congress enacted section 1782, “it intended to cover governmental or intergovernmental arbitral tribunals and conventional courts and other state-sponsored adjudicatory bodies,” but did not intend to cover “arbitral bodies established by private parties.” Based on this precedent, the court found that the China International Economic and Trade Arbitration Commission (CIETAC) did not qualify as a foreign tribunal under section 1782(a). While the court acknowledged that CIETAC was originally established in 1954 by the Chinese government, the court explained that: (1) CIETAC’s jurisdiction is derived exclusively from the private agreement of the parties to arbitration proceedings; (2) the parties, not the state, are permitted to choose their own arbitrator; (3) the arbitrator’s decision is final and binding upon both parties; and (4) CIETAC itself emphasizes it is “independent of the administrative organs of the Chinese government, and free from any administrative interference in handling cases.” The court also noted that permitting parties to seek discovery through American courts under section 1782(a) would undermine significant advantages of arbitration, specifically, its efficiency and cost-effectiveness, and thereby conflict with the strong federal policy favoring arbitration. The court, therefore, held that CIETAC is not a “foreign or international tribunal” within the meaning of section 1782(a).
In re Application of Hanwei Guo, No. 1:18-mc-00561-JMF (S.D.N.Y. Feb. 25, 2019).