Court of Appeals holds that private arbitral tribunal is a "foreign tribunal" for purposes of 28 United States Code Section 1782 | Practical Law

Court of Appeals holds that private arbitral tribunal is a "foreign tribunal" for purposes of 28 United States Code Section 1782 | Practical Law

Abby Cohen Smutny (Partner) and Lee A. Steven (Counsel), Leah Witters (Associate) and Daniel Hickman (Associate), White & Case LLP

Court of Appeals holds that private arbitral tribunal is a "foreign tribunal" for purposes of 28 United States Code Section 1782

Published on 05 Jul 2012 • USA (National/Federal)
Abby Cohen Smutny (Partner) and Lee A. Steven (Counsel), Leah Witters (Associate) and Daniel Hickman (Associate), White & Case LLP
The Eleventh Circuit Court of Appeals has upheld a district court’s grant of an application to obtain discovery under 28 U.S.C. § 1782 for arbitral proceedings in Ecuador, holding that the arbitral tribunal at issue is a foreign tribunal within the scope of section 1782.
In Consorcio Ecuatoriano de Telecomunicaciones SA v JAS Forwarding Inc., (11th Cir. June 25, 2012), Consorcio Ecuatoriano de Telecomunicaciones SA (CONECEL) and Jet Air Service Ecuador SA (JASE) entered into a foreign shipping contract. After a dispute arose, JASE initiated arbitration against CONECEL for non-payment. CONECEL, in turn, indicated that it planned to file both civil and private criminal claims related to the dispute in Ecuadorian courts. To assist with the arbitration and potential litigation, CONECEL filed an application under 28 USC § 1782 in US court seeking documents from the US branch of JASE.
Section 1782 provides that district courts may assist in the production of documents or testimony if four requirements are met:
  • "A foreign or international tribunal" or "any interested person" makes the request.
  • The request is for a document or testimony.
  • The evidence sought is "for use in a proceeding in a foreign or international tribunal".
  • The person from whom discovery is sought can be found in the district of the district court.
Even if the requirements are met, the district court has discretion to decide whether to grant the application.
Finding that the requirements were met, the district court granted the application, and JASE appealed. The only section 1782 requirement disputed on appeal was whether the arbitral proceeding was a "proceeding in a foreign or international tribunal."
The Eleventh Circuit began its analysis by explaining that "tribunal" is intended to be a broad term and includes not only courts, but administrative and quasi-judicial proceedings. The court then analysed the tribunal at issue, relying on factors used by the Supreme Court in Intel Corp. v Advanced Micro Devices, Inc., 542 U.S. 241 (2004) to determine whether the directorate-general of a European Commission was a tribunal under section 1782:
  • Whether the arbitral panel is a "first-instance adjudicative decisionmaker".
  • Whether the panel allows gathering and submitting evidence.
  • Whether the panel can "determine liability and impose penalties".
  • Whether the panel's decision is "subject to judicial review."
JASE argued that section 1782 did not apply because the decision of the arbitral panel in question was not subject to judicial review because its "determinations of fact and law are not reviewable by appeal." The court rejected this argument because the parties did not dispute that courts could nullify awards for procedural defects or constitutional violations. Even if the award was subject to review only on limited grounds, it was still subject to review.
Finding that all the section 1782 requirements had been met, and that the district court did not abuse its discretion, the Court of Appeals affirmed the district court's decision to grant the application.
This case demonstrates the broad interpretation courts are likely to give to the definition of "tribunal" in their effort to assist foreign tribunals in compiling evidence and testimony.