December 18, 2019 Practice Points

In International Arbitration, Parties May Be Entitled to U.S. Discovery

The Sixth Circuit held that a commercial arbitration panel in Dubai hearing a case between private parties might be entitled to take discovery aided by the U.S. courts.

By John B. Pinney

On September 19, 2019, the Sixth Circuit unanimously held that a commercial arbitration panel in Dubai hearing a case between private parties was a “tribunal” within the meaning of 28 U.S.C. §1782(a) and therefore might entitle the parties to take discovery aided by the U.S. courts. Abdul Latif Jameel Trans. Co. Ltd. v. FedEx Corp., 2019 WL 4509287 (6th Cir. Case No. 19-5315). A decision by a Court of Appeals on this precise issue has been long awaited since the Supreme Court’s decision in Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004), which hinted in a footnote at this result. Prior to Intel, two Courts of Appeals, the Second Circuit in National Broadcasting Co., Inc. v. Bear Stearns & Co., Inc., 165 F.3d 184 (2d Cir. 1999), and the Fifth Circuit in Republic of Kazakhstan v. Biedermann, 168 F.3d 880 (5th Cir. 1999), had held otherwise. Since Intel, the district courts have decided the issue both ways.

In a unanimous opinion by Circuit Judge John K. Bush, the Sixth Circuit concluded that Congress intended that the judicial assistance afforded under §1782(a) is available for obtaining evidence for use in private international commercial arbitrations. In support of its decision, the court examined the legislative history and followed the Supreme Court’s lead in its analysis in the Intel case that held that the European Union’s Competition Commission, which was conducting an antitrust investigation of Intel, was a “tribunal.”

The case arose from an arbitration of a commercial dispute between FedEx International and Abudul Latif Jameel Transportation Co. Ltd (ALJ) (a Saudi corporation) pending before a private international commercial arbitration tribunal in United Arab Emirates under the rules of the Dubai International Arbitration Centre/London Court of International Arbitration (DIAC/LCIA). The arbitration involved a contract dispute between ALJ, the Saudi respondent, and FedEx International, the claimant. ALJ’s petition under §1782(a) sought to compel FedEx Corp., the U.S. parent of FedEx International, to produce documents and give deposition testimony for use in the DIFC/LCIA arbitration.

The district court in Memphis denied ALJ’s application on the basis of its conclusion that private international arbitration tribunals were not “tribunals” within the meaning of §1782(a). ALJ appealed to the Sixth Circuit. Although not relying directly on the 1999 Second and Fifth Circuit in the NBC and Biedermann cases, the district court held that, in order to be a tribunal within the scope of §1782(a), the “adjudicative body [must have] the characteristics necessary to be considered a ‘tribunal’ under §1782.” One of those required characteristics, it determined, was that decisions of the tribunal must be subject to judicial review. Finding that awards of the DIFC/LCIA tribunal were not subject to substantive judicial review, the district court held that the DIFC/LCIA arbitration tribunal hearing ALJ case was not a “tribunal” under §1782(a).

The Sixth Circuit rejected the district court’s functional analysis. Instead, the appellate court carefully examined the ordinary meaning of the word “tribunal as a matter of statutory construction,” considering dictionary definitions, use in legal writings, and other statutory uses of the word “tribunal.” That examination led to the following conclusion: “Here, the text, context, and structure of §1782(a) provide no reason to doubt that the word ‘tribunal’ includes private commercial arbitration panels established pursuant to contract and having authority to issue decisions that bind the parties.” 2019 WL 4509287, *8. Accordingly, the court squarely held that DIFC/LCIA arbitration panel was a “foreign or international tribunal,” reversing the district court’s judgment. The case was then remanded to the district court to apply the four discretionary factors set forth in Intel and decide whether ALJ’s requested production of documents and deposition testimony should be ordered. See, Intel, 542 U.S. at 264-65.

Practice Pointer

The Sixth Circuit’s decision, 20 years after NBC and Biedermann, will likely be a watershed and may well lead to general acceptance that §1782(a) may be applied by federal district courts for discovery in private international commercial arbitrations. While the Sixth Circuit’s decision directly conflicts with the NBC and Biedermann and could give rise to the Supreme Court taking up the issue, it seems more likely that the Sixth Circuit’s analysis ultimately will prevail, eventually leading to the overruling of NBC and Biedermann

As a concluding thought, the Sixth Circuit did not address directly and did not decide whether §1782(a) could be used for an international commercial arbitration seated in the United States. Given the statute’s use of the disjunctive for the phrase “foreign or international tribunal,” a strong argument can be made that it may.  

John B. Pinney is a senior trial lawyer at Graydon in Cincinnati, Ohio.

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