In 1964, the U.S. Congress amended 28 U.S.C.§ 1782(a) to permit district courts to order the production of certain evidence “for use in a foreign or international tribunal.” Although Congress unquestionably intended in 1964 to broaden the applicability of the statute to include administrative and quasi-judicial proceedings beyond “judicial proceeding[s] . . . in any court in a foreign country,” courts have disagreed as to whether Congress intended the phrase “foreign or international tribunal” to include international arbitrations.
In the recent consolidated cases of ZF Automotive US, Inc. v. Luxshare, Ltd. and AlixPartners, LLP v. Fund for Protection of Investors’ Rights in Foreign States, the U.S. Supreme Court addressed whether the following two arbitral bodies constituted “foreign or international tribunal[s]": (i) an arbitration panel organized in accordance with a German-based private dispute resolution organization; and (ii) an ad hoc arbitration panel organized in accordance with the Arbitration Rules of the United Nations Commission of International Trade Law (“UNCITRAL”) that was selected pursuant to a bilateral investment treaty. In both cases, the courts below held that these arbitral bodies were “foreign or international tribunal[s]” under § 1782. The Supreme Court, however, found they were not on the basis that a “foreign or international tribunal” under § 1782 must be a governmental or intergovernmental adjudicative body, and neither arbitral body was “imbued with governmental authority.”
1. Meaning of “Tribunal” in 28 U.S.C. § 1782
The first issue addressed by the Supreme Court was “whether the phrase ‘foreign or international tribunal’ in § 1782 includes private adjudicative bodies or only governmental or intergovernmental bodies.” In addressing this question, the Court began with a narrow focus on the word “tribunal.” The Court, looking at dictionary definitions, acknowledged that the term can be used synonymously with “court,” but, in light of Congress’s amendments to § 1782, “tribunal” should be understood in the broader sense as referring to “any adjudicatory body.” Notably, the Court recognized that this broad meaning of tribunal does not itself exclude private adjudicatory bodies, but the Court explained that its analysis did not end there. Rather, the Court explained that the phrase “foreign or international” modified the meaning of “tribunal.” Accordingly, the Court held that “tribunal” as used in § 1782 means “an adjudicative body that exercises governmental authority.”
The Court supported its holding that a “tribunal” under § 1782 must exercise governmental authority by looking to the history of § 1782 and comparing the statute of the Federal Arbitration Act (“FAA”). In 1964, Congress amended § 1782 by replacing the phrase “judicial proceedings” with “proceeding in a foreign or international tribunals.” The Court explained that its decision to limit “tribunal” to bodies exercising governmental authority was consistent with Congress’ amendment, which it read to signal an expansion of the types of public bodies covered by the statute. This made sense, according to the Court, because the “animating purpose of § 1782 is comity: Permitting federal courts to assist foreign and international governmental bodies promotes respect for foreign governments and encourages reciprocal assistance.” Defining tribunal to include private arbitral bodies would not further this core purpose of § 1782 and would result in “significant tension” with the FAA, which, in the context of domestic arbitration, forecloses pre-arbitration discovery and only permits the arbitration panel to request discovery.
2. When Do International Arbitral Tribunals Qualify as “Tribunals”?
Having held that § 1782 requires a foreign or international tribunal to be governmental or intergovernmental, the Court next considered whether the two arbitral bodies at issue exercised governmental authority. The Court held that neither of the arbitral bodies at issue qualified as tribunals, with the status of the ad hoc arbitration panel presenting a “harder question” than the German private arbitration panel. The Court’s rationale for its conclusion, particularly with respect to the ad hoc arbitration, provides future § 1782 applicants with guidance as to whether an arbitral body may qualify as a tribunal under § 1782.
In assessing the ad hoc arbitration panel’s potential status as a § 1782 tribunal, the Court framed the “relevant question” as “whether the nations intended that the ad hoc panel exercise governmental authority.” Concluding that they did not, the Court, recognizing that “governmental and intergovernmental bodies may take many forms,” left the door open to the “possibility that sovereigns might imbue an ad hoc arbitration panel with official authority.” In doing so, the Court’s decision recognized several factors (or as the Court put it, “indicia,” “indications,” “features,” or “other evidence”) that are relevant to the issue of whether the relevant sovereign(s) intended for an arbitral body to exercise governmental authority:
- Whether the arbitral body is a pre-existing body or formed for the purpose of adjudicating disputes. The Court stated that the ad hoc arbitration panel was formed for the purpose of adjudicating investor-state disputes and as such was not a pre-existing tribunal.
- Whether the arbitral body is created by an international treaty itself or the sovereigns thereto are involved in its formation. The Court stated that the treaty did not create the ad hoc arbitration panel but rather merely references the set of rules that govern the panel’s formation and procedures.
- Whether the arbitral body is affiliated with a sovereign. The Court stated that the ad hoc arbitration panel “function[ed] independently” of the sovereigns, consisted of individuals chosen by the parties, and lacked an “official affiliation” with the sovereigns or any other governmental or intergovernmental entity.
- Whether the arbitral body receives government funding. The Court stated that the ad hoc arbitration panel did not receive any government funding.
- Whether the arbitral proceedings are public. The Court noted that the ad hoc arbitration panel’s proceedings maintained confidentiality.
- Whether the arbitral award is public. The Court noted that an award issued by the ad hoc arbitration panel could only be made public with the consent of both parties.
- Whether the tribunal’s authority exists because sovereigns “clothed the panel with governmental authority.” The Court stated that the ad hoc arbitration panel had authority because the parties consented to the arbitration, not because of any authority conferred.
Although the Court’s opinion mentions the aforementioned considerations for determining whether an arbitral body exercises governmental authority, the Court did not strive to rank these considerations. Nor did the Court suggest that these factors are exhaustive or mandatory. Thus, we anticipate that, in the wake of the Supreme Court’s opinion, some § 1782 applicants will continue to seek discovery for use in a foreign or international arbitration proceeding where the arbitral body possesses one or more of the aforementioned characteristics. The saga between § 1782 and arbitration continues, albeit in a more limited fashion.