October 15, 2020 Articles

Debate Continues as Seventh Circuit Limits Section 1782 to Governmental Tribunals

Does “foreign or international tribunal” include a private arbitral tribunal? Two Servotronics cases give opposite results.

By Eric van Ginkel

In January 2016, Boeing employees were testing a new Boeing 787 Dreamliner at Boeing’s facility near the Charleston International Airport, when one of the Rolls-Royce engines malfunctioned. Upon further inspection, it appeared that a defective valve was blocking the fuel supply to the engine. When the workers tried to fix the problem, the engine caught fire, causing substantial damage to the aircraft. Boeing demanded compensation from Rolls-Royce, and in March 2017, Rolls-Royce settled Boeing’s claim for $12.8 million. 

Servotronics had supplied Rolls-Royce with the allegedly defective engine valve. When settlement failed, Rolls-Royce initiated arbitration against Servotronics for indemnification of the $12.8 million it had paid to Boeing. The arbitration, governed by the rules of the Chartered Institute of Arbitrators (CIArb), is being held in London.

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