Uncertainty Continues Over Whether Federal Courts Can Order Discovery In Aid of International Arbitrations

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As we have discussed in previous posts, federal appeals courts in the United States are split over whether a private international arbitration constitutes a “foreign or international tribunal” within the meaning of 28 U.S.C. § 1782(a), which authorizes U.S. district courts to provide assistance to foreign or international tribunals by ordering discovery of persons in the district. In a very recent case, the United States District Court for the District of Columbia recognized this split, and directed the parties to provide additional briefing before deciding this hotly disputed issue.

In In re Application of: Food Delivery Holding 12 S.A.R.L., 1:21-mc-00005, 2021 WL 860262 (Mar. 8, 2021), Food Delivery Holding 12 S.a.r.l. (“FDH”) filed an application under 28 U.S.C. §1782 for an order to issue a subpoena for the taking of deposition and production of documents for use in a matter before the Dubai International Finance Centre-London Court of International Arbitration (“DIFC-LCIA”).

The Court began its analysis by noting that deciding whether to grant discovery under Section 1782 involves a two-step inquiry:

“ First, the court must determine whether it can order the requested relief—that is, whether it has the authority to do so; second, it must decide whether it should order the requested relief—that is, whether exercising its discretion to do so would further the statute’s “twin aims of ‘providing efficient assistance to participants in international litigation and encouraging foreign countries by example to provide similar assistance in our courts.’”

With respect to the first step, a district court has authority to grant the request when (1) the person from whom discovery is sought located within the district; (2) the discovery for use in a proceeding before a foreign or international tribunal and (3) the application is made by an interested person.

With respect to the second step, the Court looks at various factors, including “(1) whether the target of the discovery request is a participant in the foreign or international proceeding, (2) the nature of the foreign tribunal and character of its proceedings, (3) whether the application is an attempt to circumvent foreign proof-gathering restrictions or other policies, and (4) whether the request is unduly intrusive or burdensome.”

The D.C. Court noted that FDH’s application “stumbles just out of the gate” because it failed to acknowledge and to address “in any depth” the fact that the federal courts have reached different conclusions as to whether a private arbitration fits within Section 1782’s definition. The Court noted that the D.C. Circuit does not appear to have weighed in on this issue, and found that FDH did not overcome its initial burden of showing that the Court is authorized to grant the application. However, the Court allowed the parties to submit supplemental briefing specifically addressing this issue.

As this case confirms, in light of the uncertainty surrounding this issue and the lack of a definitive ruling in some Circuits, litigants facing this issue should be prepared to brief the issue, including by advising the Court of the conflicting case law.

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