Supreme Court Restricts 28 U.S.C. § 1782 Discovery in Aid of Arbitration

Jones Day

The U.S. Supreme Court has held that 28 U.S.C. § 1782 authorizes discovery to assist only governmental or intergovernmental adjudicative bodies, and not private adjudicative bodies like the international commercial and ad hoc investor-state arbitrations before the Court.

On June 13, 2022, the Supreme Court held that 28 U.S.C. § 1782—which authorizes district courts to order testimony or document production "for use in a proceeding in a foreign or international tribunal"—"reaches only governmental or intergovernmental adjudicative bodies." Neither the international commercial arbitration nor the ad hoc investor-state arbitration before the Court "fit[] that bill." 

The Court's decision involved two underlying cases. In ZF Automotive US, Inc. v. Luxshare, Ltd., a U.S. company and a Hong Kong company had agreed to resolve disputes in a private commercial arbitration. Before initiating arbitration, Luxshare sought § 1782 discovery from ZF. In AlixPartners, LLP v. The Fund for Protection of Investors' Rights in Foreign States, a Russian corporation commenced an ad hoc arbitration under UNCITRAL Rules against the Government of Lithuania as provided in the Russia–Lithuania Bilateral Investment Treaty ("BIT"). The Fund then sought § 1782 discovery from AlixPartners. In both cases, the lower courts granted the requested discovery. 

The Supreme Court reversed, unanimously holding that § 1782 "requires a 'foreign or international tribunal' to be governmental or intergovernmental," and that neither adjudicative body qualified. The Court reasoned that, attached to the modifiers "foreign or international," "'tribunal' is best understood as an adjudicative body that exercises governmental authority." Specifically, it found that a "foreign tribunal" is "a tribunal imbued with governmental authority by one nation," while an "international tribunal" is "a tribunal imbued with governmental authority by multiple nations." The Court explained that this interpretation was confirmed by the statute's history and avoided tension with the Federal Arbitration Act. 

The Court found the ZF case to be "straightforward" because a private commercial dispute governed by a private contract to be arbitrated through private dispute resolution was plainly not governmental. 

The Court commented that the AlixPartners case presented a "harder question," but reached the same result. The Court noted that the BIT gave investors the option to resolve disputes before a governmental body but the investor here chose arbitration before an ad hoc panel, the treaty itself did not create the panel, the panel functioned independently of the two sovereigns with arbitrators chosen by the parties, and there were no "other possible indicia of a governmental nature." The Court thus found no intent to confer governmental authority on this panel.  

The Court did not "foreclose[] the possibility that sovereigns might imbue an ad hoc arbitration panel with official authority." Thus, future questions may arise as to the meaning of "imbued with governmental authority" and as to where certain tribunals fall on each side of that line.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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