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U.S. Supreme Court to Address Discovery in International Arbitrations

Diana Kruze


  • The U.S. Supreme Court will decide in Servotronics, Inc. v. Rolls-Royce PLC if 28 U.S.C. § 1782 permits U.S. discovery for private international arbitrations, resolving a circuit split on whether "foreign or international tribunal" includes private commercial arbitrations.
  • Section 1782 allows federal courts to authorize subpoenas for evidence in the United States for use in foreign tribunal proceedings.
  • To qualify, applicants must show the discovery is for a foreign tribunal, they are interested parties, and the respondent is within the court’s district.
  • Courts consider factors like burden, foreign jurisdictional reach, and attempts to bypass foreign discovery restrictions.
U.S. Supreme Court to Address Discovery in International Arbitrations
Monty Rakusen via Getty Images

In Servotronics, Inc. v. Rolls-Royce PLC, the U.S. Supreme Court will likely address the hotly contested issue of whether 28 U.S.C. § 1782 allows applicants in private international arbitrations to seek U.S. discovery from federal courts. Under section 1782, a petitioner may obtain evidence through a district court for use in a “foreign or international tribunal.” Circuit courts have been split over whether the definition of “foreign tribunal” includes private commercial arbitrations. The Supreme Court’s decision in Servotronics will likely have profound implications on the availability of U.S. discovery in international arbitrations.

Discovery under 28 U.S.C. § 1782

Under section 1782, a federal court may grant an applicant the authority to issue subpoenas in the United States to obtain documents and testimony. To qualify, the applicant must establish that (1) the discovery will be used in an actual or contemplated “foreign tribunal” proceeding; (2) the applicant is an interested person in that proceeding; and (3) the responding party from whom the discovery is sought resides (or is otherwise found) within the court’s district.

If the applicant satisfies these statutory requirements, a district court has the discretion to grant discovery after considering the following additional factors: (1) whether the request is unduly intrusive or burdensome; (2) whether the discovery sought is within the foreign tribunal’s jurisdictional reach; (3) whether the applicant’s request in the U.S. is an attempt to circumvent foreign proof-gathering restrictions; and (4) the nature of the foreign tribunal, the character of the proceeding abroad, and the receptivity of the foreign court or agency to U.S. judicial assistance. Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004).

If discovery is allowed, section 1782 can be a powerful tool to gather evidence in the United States for use in a proceeding located abroad, especially where the applicable rules in the international arbitration are more restrictive.

Section 1782, however, does not explicitly define what constitutes a “foreign tribunal,” and the Supreme Court’s prior decision in Intel does not address this issue. This lack of clarity has led to a circuit split.

The Circuit Split

Three U.S. circuit courts (the Second, Fifth, and Seventh) have held that a private international arbitration is not a “foreign tribunal” for purposes of section 1782 and hence ruled against the availability of discovery.

In 1999, the Second Circuit applied a restrictive definition of “foreign international tribunal,” finding that a private international arbitral tribunal falls outside the scope of section 1782. See Nat’l Broad. Co. v. Bear Stearns & Co., 165 F.3d 184 (2d Cir. 1999); see also Hanwei Guo v. Deutsche Bank Sec., 965 F.3d 96, 100 (2d Cir. 2020). Similarly, the Fifth Circuit found that the legislative history and policy behind section 1782 supported a finding that private international arbitrations outside the United States did not qualify. See Republic of Kazakhstan v. Bidermann Int’l, 168 F.3d 880, 883 (5th Cir. 1999). In 2020, the Seventh Circuit followed suit, similarly finding that a private international arbitral tribunal is not a “foreign tribunal” for purposes of a section 1782 application. See Servotronics, Inc. v. Rolls-Royce PLC, 975 F.3d 689 (7th Cir. 2020); cf. GEA Grp. AG v. Flex-N-Gate Corp., 740 F.3d 411, 419 (7th Cir. 2014) (international arbitration “might be considered to be a § 1782 tribunal”), narrowed and explained by Servotronics Inc. v. Rolls-Royce PLC, 975 F.3d 689 (7th Cir. 2020).

Two circuits, on the other hand, have come to the opposite conclusion. The Fourth Circuit found that section 1782 provides for a broad interpretation of “foreign tribunal” that would include a private international arbitral tribunal. Servotronics, Inc. v. Boeing Co., 954 F.3d 209 (4th Cir. 2020). The Sixth Circuit also held that “foreign or international tribunal” can encompass private arbitral tribunals, relying on the plain and common meaning of those terms. See Abdul Latif Jameel Transp. Co. v. FedEx Corp. [PDF], 939 F.3d 710 (6th Cir. 2019).

With respect to the other circuits, the Third and Ninth Circuits have cases pending on the issue but have yet to issue a decision. See In re EWE Gasspeicher GmbH, No. 19-mc-109-RGA, 2020 WL 1272612 (D. Del. Mar. 17, 2020) (finding that private commercial arbitrations are not “tribunals” under section 1782), appeal docketed, No. 20-1830 (3d Cir. Apr. 24, 2020); HRC-Hainan Holding Co., LLC v. Yihan Hu, No. 19-mc-80277-TSH, 2020 WL 906719 (N.D. Cal. Feb. 25, 2020) (finding that private commercial arbitrations are “tribunals” under section 1782), appeal docketed, No. 20-15371 (9th Cir. Mar. 4, 2020). The Eleventh Circuit previously found that “tribunal” in section 1782 encompasses private international arbitration, but that decision was later vacated for unrelated reasons. See Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA) Inc., 685 F.3d 987, 994–95 (11th Cir. 2012), vacated and superseded, 747 F.3d 1262 (11th Cir. 2014).

The Servotronics Cases

The parties in Servotronics v. Rolls-Royce are actually at the heart of two cases that were decided by different courts in opposite ways.

Their dispute began in 2016 when a tailpipe fire damaged a Boeing aircraft in South Carolina. Rolls-Royce, which supplied the plane’s engine, settled with Boeing, paying over $12 million. Rolls-Royce then demanded compensation from Servotronics, the company that had created the engine’s allegedly faulty valve. Rolls-Royce ultimately filed an arbitration claim in England against Servotronics. During discovery in the arbitration proceeding, Servotronics filed section 1782 applications in Illinois and South Carolina.

In the Chicago case, Rolls-Royce moved to quash various subpoenas on the grounds that a private foreign arbitration proceeding is not a “foreign tribunal.” The Seventh Circuit ultimately ruled in Rolls-Royce’s favor. Although it found that the meaning of “foreign tribunal” would currently include private arbitral panels in both common and legal parlance, the term was more narrowly defined as “a judge” or “governmental authority” adjudicatory body in 1964 when Congress amended section 1782. This narrower definition, the Seventh Circuit concluded, excludes private, foreign-seated arbitrations. Moreover, a broad interpretation of the word “tribunal” in section 1782 would create a conflict with the Federal Arbitration Act, as the act offers narrower discovery rights in domestic arbitrations. See Servotronics, Inc. v. Rolls-Royce PLC, 975 F.3d 689 (7th Cir. 2020).

Conversely, in Servotronics, Inc. v. Boeing Co., the South Carolina discovery application involving the same parties and facts, the Fourth Circuit concluded that section 1782 discovery should be allowed in international private arbitrations. In so holding, the Fourth Circuit relied on (1) the long-held understanding among lawyers and judges that the definition of “tribunal” includes foreign arbitrations, and (2) the Supreme Court’s decision in Intel to include public agencies with quasi-judicial authority within the definition of “tribunals.” Servotronics, Inc. v. Boeing Co., 954 F.3d 209 (4th Cir. 2020).

An Eventual Supreme Court Decision

The Supreme Court will address these conflicting decisions in the next term. With strong arguments on both sides, it is difficult to predict how the Supreme Court will rule. The arbitration community itself is polarized over what is the right result; several U.S. and international arbitration associations have filed conflicting amicus briefs. The U.S. Department of Justice also joined the melee, contending that discovery should not be allowed. Argument is currently set for October 2021. Regardless of the ultimate decision, the Supreme Court’s ruling in Servotronics will, it is hoped, provide much-needed clarity on the availability of U.S. discovery in private international arbitrations.