The Supreme Court resolved a circuit split and issued a long-awaited decision holding that broad U.S.-style discovery under 28 U.S.C. § 1782 is not available in private foreign arbitrations. In the past decade, litigants in international arbitrations had been attempting to use section 1782 more frequently to obtain comprehensive discovery that would otherwise typically be unavailable in arbitration abroad. Now the Supreme Court has put an end to that practice.
The Court consolidated two different appeals that each questioned whether section 1782, which authorizes federal district courts to order discovery from U.S. entities for use “in a foreign or international tribunal,” extends to private arbitrations, as opposed to only governmental or quasi-governmental proceedings. For years, federal courts have grappled with this question. The Second, Fifth, and Seventh Circuit Courts of Appeal have held that a “foreign or international tribunal” does not include private international arbitration, while the Fourth and Sixth Circuits disagreed. In a unanimous opinion, the Supreme Court adopted the former view, concluding that private arbitral bodies are not “foreign or international tribunals” within the meaning of section 1782. As a result, parties engaged in private foreign arbitration may no longer seek expansive discovery in the United States under the statute.
