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Sixth Circuit Changes Landscape Of Discovery In Aid Of International Commercial Arbitration

There has been considerable debate about what qualifies as a “tribunal” under 28 U.S.C. § 1782(a), which enables courts to order discovery from a party or non-party for use in a proceeding before “a foreign or international tribunal.” Recently, the Sixth Circuit held that this provision permits discovery for use in private international commercial arbitrations—a decision that is at odds with other precedents.


Discovery (also sometimes referred to as disclosure) in international commercial arbitration continues to be a hot topic. The United States has long been considered to be overly permissive. The long-arm statute under 28 U.S.C. § 1782(a) sets the United States apart from most other countries that shy away from discovery in aid of arbitration. Under § 1782(a), US federal district courts may order discovery from a party or non-party for use in a proceeding “in a foreign or international tribunal.” However, there is considerable debate about what qualifies as tribunal under this section.

On September 19, 2019, the Sixth Circuit held that this provision permits discovery for use in private commercial arbitrations. The court based this decision on the statutory text “as well as on context and history.” (See In re Application to Obtain Discovery for Use in Foreign Proceedings, 939 F.3d 710 (2019)).

This Sixth Circuit decision is at odds with other precedents. The decision comes 55 years after § 1782 was amended to include its current language, 20 years after the Fifth and Second Circuits determined that § 1782(a) does not apply to private commercial arbitrations, and 15 years after the Supreme Court determined the word tribunal contained in § 1782(a) applies to non-judicial proceedings. In this On the Subject, we briefly review the history of § 1782(a) and the various decisions interpreting it. We then discuss the Sixth Circuit’s recent decision, which may set the stage for future efforts to allow discovery in the United States for use in aid of an international commercial arbitration.

Section 1782: Before and After the Amendment of 1964

Section 1782 was enacted in 1948 to allow depositions “to be used in any civil action pending in any court in a foreign country with which the United States is at peace.” (See 28 U.S. Code § 1782). It was amended in 1964 to include the following language: “The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal.” (See 28 U.S. Code § 1782 (emphasis added)).

Although the word tribunal went undefined, it was clear that Congress intended to expand the scope of § 1782 and to include other decision-making authorities that were not exclusively courts in foreign countries. Yet, it was unclear from the outset whether private arbitration tribunals qualified as tribunals under § 1782, or if this section only applies to judicial and non-judicial proceedings where the decision-making authority is part of a governmental body.

The Second and Fifth Circuit’s Restrictive Reading of the Word ‘Tribunal’

The Second Circuit was the first federal court of appeals to address the question whether a private international tribunal is a tribunal under § 1782. It ruled in 1999 that an international commercial arbitration does not qualify as a tribunal under § 1782. (See National Broadcasting Co., Inc. v. Bear Stearns & Co., Inc., 165 F.3d 184 (2nd Cir. 1999)). Two months later, the Fifth Circuit agreed. (See Republic of Kazakhstan v. Biedermann Intern., 168 F.3d 880 (5th Cir. 1999)).

The Second Circuit highlighted that in its “view, the term ‘foreign or international tribunal’ is sufficiently ambiguous that it does not necessarily include or exclude an arbitral tribunal.” (See National Broadcasting Co., Inc. v. Bear Stearns & Co., Inc., 165 F.3d 184, 188 (2nd Cir. 1999) (emphasis added)). The court concluded that “Congress did not intend for that statute [§ 1782] to apply to an arbitral body established by private parties.” (See id. at 191 ).

To further support its conclusion, the Second Circuit argued that the term “international tribunal,” does not apply to private arbitration because this term was directly derived from sections 207d-207g of title 22 of the U.S.C. that dealt with arbitration involving government agencies or States. (Id. at 189 (emphasis added), citing to Hans Smit, Assistance Rendered by the United States in Proceedings Before International Tribunals, 62 Colum. L.Rev. 1264, 1264 (1962)). These repealed provisions were enacted by Congress in response to an arbitration proceeding that arose between the United States and Canada and a proceeding before the United Sates-German Mixed Claim Commission. Sections 207-207g authorized commissioners or members of international tribunals to administer oaths, to subpoena witnesses or records, and to charge witnesses with contempt.

Finally, the Second Circuit, as well as the Fifth Circuit, held that, on policy grounds, broad-ranging discovery under § 1782 will undermine the efficiency and cost-effective characteristics of arbitration. As such, they concluded that Congress did not intend § 1782 to be applicable to private commercial arbitrations.

In October 2019, the Second Circuit appeared to deviate from its previous decision —a point we address in more detail below.

The US Supreme Court and the Intel Case – The Word ‘Tribunal’ Remains Undefined for International Arbitration Proceedings

In 2004, the Supreme Court dealt with an analogous question regarding the term “foreign or international tribunal” of § 1782 in the Intel case. In Intel, the Supreme Court considered whether or not the Directorate-General for Competition of the Commission of the European Communities constituted a tribunal. The Supreme Court determined that it “ha[d] no warrant to exclude the Commission, to the extent that it acts as a first-instance decision maker, from §1782(a)’s ambit.” (See Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004)).

To support this conclusion, the Supreme Court highlighted the 1964 amendment to § 1782 in which Congress replaced the words “in any judicial proceeding pending in any court in a foreign country” with “in a proceeding in a foreign or international tribunal.” Based on this amendment, as well as on a Senate report on the proposed amendment to § 1782 that mentions the possibility of US judicial assistance in connection with administrative and quasi-judicial proceedings abroad, the Supreme Court concluded that the word tribunal applied to both judicial and non-judicial proceedings.

It is not clear if the Supreme Court considered the proceeding in front of the Directorate-General for Competition of the Commission of the European Communities as a “proceeding in a foreign or international tribunal” because of its administrative nature or because of its decision making authority. Thus, the question of whether an international commercial arbitration falls within § 1782 has remained unanswered by the United States’ highest court.

The Sixth Circuit Ruling – Green Light to International Commercial Arbitration

On September 19, 2019, the Sixth Circuit reviewed the question again and concluded that § 1782 applies to discovery in aid of private commercial arbitration. (See In re Application to Obtain Discovery for Use in Foreign Proceedings, No. 19-5315, 2019 WL 4509287 (6th Cir. Sept. 19, 2019)). The Sixth Circuit determined that “neither the phrase ‘foreign or international tribunal’ nor the word ‘tribunal’ is defined in the statute” and decided to look at the ordinary meaning of these words. (See In re Application to Obtain Discovery for Use in Foreign Proceedings, No. 19-5315, 2019 WL 4509287 (6th Cir. Sept. 19, 2019), citing to Artis v. District of Columbia, ––– U.S. ––––, 138 S. Ct. 594, 603, 199 L.Ed.2d 473 (2018)).

The court first examined the use of the word tribunal through the definitions in different dictionaries. The Sixth Circuit used legal and non-legal dictionaries, as well as different versions of dictionaries ranging from 1950 to 1996. It concluded that these sources “contain definitions of ‘tribunal’ broad enough to include private arbitration, while others contain narrower definitions that seem to exclude such proceedings.” (In re Application to Obtain Discovery for Use in Foreign Proceedings, 939 F.3d 710 (2019)1). Therefore, the court then considered how courts have used the word tribunal.

Starting its review from 1870, the Sixth Circuit looked at state and federal courts decisions to determine the usage of the word tribunal before the amendment of § 1782 in 1964. The Sixth Circuit concluded that word tribunal has long been understood by courts “to encompass privately contracted-for arbitral bodies with the power to bind the contracting parties.” (Id. at 722).

The Sixth Circuit then reviewed the use of the word tribunal in Title 28 of the U.S.C. and found only one additional instance where this word is used. Section 1781 addresses the transmittal of “a letter rogatory issued, or request made, by a foreign or international tribunal […to a…] tribunal, officer, or agency in the United States.” In the view of the Sixth Circuit, a private arbitral panel can make a request for evidence, so there is no indication that the word tribunal in § 1782 refers exclusively to judicial or other public entities, which provides “no reason to doubt that the word ‘tribunal’ includes private commercial arbitral panels.” (Id. at 723).

Finally, the Sixth Circuit considered, on the one hand, the Second and Fifth Circuit rulings; and, on the other hand, the ruling from the Supreme Court in Intel.

With regard to the Second and Fifth Circuit decisions, the Sixth Circuit considered that these courts turned to a legislative history analysis too early in the interpretation process without diving into the linguistic and historic use of the word tribunal first. Furthermore, the Sixth Circuit emphasized that relying on the legislative history alone is not advisable. Scholars and judges have noted that congressional reports are not an appropriate guide to assess the meaning of the text of a statute because those congressional reports have not gone through the same process of debate and bicameralism as the legislative text.

With regard to the Supreme Court ruling, the Sixth Circuit noted that the Supreme Court did not exclude tribunal from applying to private international arbitration. In fact, the Sixth Circuit highlighted that the Supreme Court noted that “[i]n light of the variety of foreign proceedings resistant to ready classification in domestic terms, Congress left unbounded by categorical rules the determination whether a matter is proceeding ‘in a foreign or international tribunal.’” (See Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 263 (2004)). Thus, the Sixth Circuit concluded that the Supreme Court did not limit the word tribunal to proceedings in front of public entities only.

Latest Developments in US Courts

Earlier this year, the Second Circuit distanced itself from its own 1999 decision. On October 7, 2019, the Second Circuit issued a ruling refusing a request made by Mexican investors and US asset management firms for discovery from Santander under § 1782. This case concerning the failing of the Banco Popular Español (BPE) that triggered a forced sale of BPE to Santander, which ultimately resulted in losses to the Mexican and US investors. The court refused the discovery request on the basis that Santander’s contact to the Southern District of New York were insufficient to subject it to the district court’s personal jurisdiction. Nevertheless, it highlighted that “there is no per se bar under § 1782 to extraterritorial discovery.” (See In re del Valle Ruiz, 939 F.3d 520, 524 (2019)). Through this decision, the Second Circuit opened the door to hear discovery requests in the international arbitration context and distanced itself from its previous decision.

In addition, on October 31, 2019, a few weeks after the Second Circuit issued its ruling in the Santander case, Judge Beth Bloom of the US District Court for the Southern District of Florida issued an order allowing a Brazilian energy trading company to obtain documents for an ongoing arbitration in Brazil. Her decision was based on § 1782, but Judge Bloom did not provide reasons for granting the ex parte request made by the Brazilian company. (See In Re Bio Energias Comercializadora De Energia Ltda, Court Order Case No. 19-mc-24497-BLOOM).

The Future of Discovery in Aid of Commercial Arbitration Under § 1782

The application of § 1782(a) to international commercial arbitration is still under debate. On the one hand, the 1999 Second and Fifth Circuit court decisions clearly established that § 1782(a) does not apply to international arbitration because international commercial arbitration does not fit into the legislative history of § 1782. On the other hand, the Sixth Circuit held the opposite in September 2019. Other recent cases support the notion that US courts are more open than they were 20 years ago to granting discovery in aid of international arbitration. This is underscored by the Second Circuit’s latest decision on the issue, recognizing that there is no per se bar to the use discovery in aid of international arbitration.

It remains to be seen what comes next and whether the Supreme Court will be asked to address (again) whether and when § 1782(a) can be used in aid of international commercial arbitration. In the interim, parties seeking assistance from the courts under § 1782 will want to consider carefully where in the United States they file such requests.

© 2022 McDermott Will & EmeryNational Law Review, Volume IX, Number 351

About this Author

Lisa Richman, Attorney, McDermott

Lisa M. Richman focuses her practice on international dispute resolution matters, with a particular emphasis on international commercial arbitration and public international law. She has experience representing clients in a broad range of matters, including in the areas of international commercial and investment arbitrations, securities enforcement, securities litigation, general commercial litigation disputes and insurance coverage.