United States: US Court Of Appeals For The Eleventh Circuit Holds That Parties In Foreign Commercial Arbitrations May Seek Discovery In The United States

Originally published June 28, 2012

Keywords: foreign commercial arbitration, discovery, Consorcio Ecuatoriano de Telecomunicaciones

The US Court of Appeals for the Eleventh Circuit, in Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc.,¹ has held that a foreign arbitration panel is a "tribunal" within the meaning of 28 U.S.C. §1782, thereby authorizing parties to such arbitrations to seek discovery from a United States district court pursuant to that statute.  

Section 1782 authorizes a US district court to order a person residing in that district to produce documents and provide testimony "for use in a proceeding in a foreign or international tribunal." Prior to 2004, two federal courts of appeals (the 2d and 5th Circuits) had held that an arbitration panel is not a "tribunal" within the meaning of §1782. But dicta from the US Supreme Court in Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004), suggested otherwise, and most district courts thereafter have deemed arbitration panels to be tribunals for purposes of §1782. However, some district courts and commentators have suggested that only investment treaty arbitrators, and not international commercial arbitrators, qualify as a tribunal under §1782.

The Eleventh Circuit decision in Consorcio Ecuatoriano is the first appellate court decision to address this "tribunal" issue squarely since the Supreme Court's Intel decision. The Eleventh Circuit ruled that the arbitral panel at issue, which is sited in Ecuador, is a tribunal because it is a first-instance decision-maker with authority over the gathering and submission of evidence and with the power to issue binding orders that are subject to judicial review. 

This ruling is likely to be controversial, because it may enable parties to circumvent the limited document disclosures that typically are available in international arbitration by seeking broad discovery from a US affiliate of the opposing arbitral party. We therefore expect to see further battles over this issue in other federal circuits, and perhaps definitive Supreme Court resolution in the future.

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Footnotes

1 No. 11-12897, 2012 WL 2369166 (11th Cir. June 25, 2012).

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