On July 15, 2021, the Second Circuit reinforced the availability of § 1782 discovery to most investor-state arbitrations. In The Application of the Fund for Protection of Investor Rights, the court held that an investment arbitration, unlike a private commercial arbitration, can serve as the basis for § 1782 relief, even though the investment arbitration in question is not governmentally funded, is confidential, and the arbitrators are private individuals. 

In 2011, the Lithuanian government nationalized a bank. That prompted the Fund for Protection of Investor Rights in Foreign States ("Fund"), a Russian corporation, to commence an ad hoc arbitration against the Government of Lithuania pursuant to the Bilateral Investment Treaty between Russia and Lithuania. The Fund filed an application under 28 U.S.C. § 1782 in U.S. District Court, seeking discovery from the administrator overseeing the bank's Lithuanian bankruptcy proceeding. The District Court granted the Fund's application, and the bankruptcy administrator appealed, claiming that the investor-state tribunal was not a "foreign or international tribunal" within the meaning of § 1782. 

Drawing upon its opinion in In re Guo, 965 F.3d 96 (2d Cir. 2020), the Second Circuit took a functional approach in determining whether the arbitration could be considered governmental in nature. It stressed that the tribunal does not derive its authority from a private contract, but rather from a treaty. It also pointed to the United Nations-developed UNCITRAL procedural rules governing the underlying dispute. 

While the court did not establish a "bright-line rule" that section 1782 discovery is available for all treaty arbitrations, its opinion reinforces the potential for such relief in support of most investor-state arbitrations. In Servotronics v. Rolls-Royce PLC, the U.S. Supreme Court is also considering the availability of § 1782 relief to international private commercial arbitrations. The applicability of § 1782 to investor-state arbitration is not squarely before the Court, but the U.S. government has submitted an amicus brief urging the Court not to extend § 1782 relief to treaty cases.