28 U.S.C. § 1782 and International Arbitration: Evolution, and Future Challenges

In 1947, Philip C. Jessup recognized the “wide-spread international recognition and authority” of “private arbitration tribunals.” According to the Supreme Court’s ruling in 2022, private arbitration tribunals are not proper tribunals and may not access discovery under § 1782, creating tension in a more globalized world.

§ 1782 has long been seen as a powerful mechanism for obtaining evidence located in the United States in aid of foreign proceedings. Its broad scope made it particularly attractive in international arbitration, where evidentiary tools are generally more limited.

The growing reliance on § 1782 in arbitral contexts raised concerns about party autonomy, efficiency, and confidentiality–arbitration principles that ultimately shaped the Supreme Court’s restrictive interpretation.

This seminar paper examines the evolution of § 1782 and its application to international arbitration, analyzes the doctrinal shift culminating in ZF Automotive, and explores the future challenges arising from the Court’s emphasis on governmental authority as the defining criterion for access to § 1782.

Legal Framework of 28 U.S.C. § 1782

In 1855, Congress first allowed American courts to assist foreign courts in gathering evidence. The big change came in 1964, when a Commission formed by Congress in 1958 reflected the unanimous implementation by Congress of the recommendations of the Commission on International Rules of Judicial Procedure.

The new § 1782 abandoned the old Congress’ cautious approach to international judicial cooperation in favor of adopting a “spirit of liberality,” aiming “to make assistance as broadly available as possible.”

Even though the § 1782 mechanism is a great tool for other countries to access discovery, we cannot deny that one of the main goals of Congress was to place the United States as the prevalent arbitration hub.

Smit, Robinson and Brazier stated that, “with the expansion of international commerce and the increased prevalence of international litigation, America abandoned this hesitant approach to judicial assistance [] [h]oping  to encourage foreign courts [] recogniz[e] that the United States has a broader interest in the effective resolution of international disputes.”[1] 

Courts had held that the § 1782 amendment was intended “to facilitate the conduct of litigation in foreign tribunals, improve international cooperation in litigation, and put the United States into the leadership position among world nations in this respect.”[2] Moreover, the Senate itself stated that the “Congress hoped to encourage foreign countries to revise their judicial procedures similarly,”[3] with the expectation that other countries would adopt some tools of the Unites States’ procedural system.

Overview of § 1782 and Its Application to International Arbitration

§ 1782 adopts a liberal approach to international judicial assistance in evidence-gathering or discovery, shedding many of the limitations of prior statutory provisions relating to judicial assistance. “It reflects the United States’ view of its role in the international [arbitration] community: that of a willing assistant to foreign tribunals and parties and of a role model for other nations, [] making its assistance available to other nations and international tribunals without requiring reciprocity as a pre-condition.”[4]

Every circuit court can formulate different requirements, but the statutory language requires: (1) the person from whom discovery is sought must reside or be found in the district of the district court to which the application is made; (2) the discovery must be for use in a proceeding before a foreign or international tribunal, including criminal investigations[5] conducted before formal accusation; and (3) the request must be made by a foreign or international tribunal or any interested person. Once those requirements are met, the court may grant discovery.

The first requirement is easy to meet. The problem arises in the second and especially in the third requirement, since the meaning of “foreign or international tribunal” have been discussed for the past 20 years, until 2022, when the U.S. Supreme Court consolidated two cases and seemed to put a stop to the discussion regarding the scope of the statute.

§ 1782 presents many advantages for international arbitration since it allows parties access discovery, a process only available–in the broadest scope–in the United States. At the same time, presents challenges, being “[a] common [one] [] where the seat of arbitration is located outside the [U.S.], and the [respondent] to a § 1782 petition has headquarters [or others] falling within the ambit of Fed. R. Civ. P. 26(b)(I) in the United States”.

International arbitration principles such as party-autonomy, privacy and confidentiality, due process, fair and equitable treatment among others, may be compromised in the “incorporation of limited and much qualified U.S. common law-style discovery into arbitration proceedings pursuant to § 1782 rubric [] [as it] undermines the policy objectives that arbitration fervently seeks to promote.”

Other Cross-Border Discovery Methods

Discovery is only available in six global jurisdictions and is not available in any civil law jurisdictions. There are other methods of obtaining cross-border discovery within the United States: 28 U.S.C. § 1781 and § 1783. The former, “governs the transmission of “letters rogatory,” and the latter “gives U.S courts a statutory power to compel the attendance in United States who is in foreign country”. However, none of these sections is comparable to the power and possibilities that § 1782 allows, especially for international arbitration.

A second alternative is diplomatic or consular channels. However, it is not a reliable source for countries that does not have a good diplomatic relationship with the United States, for instance, in Latin America, the most reliable country is Chile, and in Asia would be Singapore.

Lastly, § 1793 allows a U.S. federal court to compel an expatriate American citizen or green card holder either to proceed documents or to travel form a foreign country to the U.S. for purposes of testifying. The scope is extremely narrow and “remains completely untested ground,” and it will not be relevant to most of arbitration cases.

Purpose and Policy Objectives of § 1782

The animating purpose of § 1782 is comity and promoting respect for foreign governments and encouraging reciprocal assistance.

Legislative history shows that the “purpose behind the proposed [amendment] was to encourage other nations to follow the lead of the United States and to adjust their procedures in order to improve practices of international cooperation and litigation.” However, no foreign procedures had been adjust in a way that can compare to the § 1782, and nations relied on the Section to benefit from the advantages of discovery.

In reviewing § 1782, the Commission pursued two policy objectives. Both were grounded in the view that the United States’ interest in ensuring the efficient and fair resolution of disputes does not lose force simply because proceedings take place outside its borders, and that the country has a distinct interest in encouraging stable international relations by offering the widest possible framework for cooperation in transnational arbitration.

Emblematic Cases: Intel and the Discretionary Factors

Prior to the Intel decision, courts were hesitant to apply § 1782 to private arbitration. While it was justified in prior years, that decision left foreign parties in a vulnerable position if they decoded to arbitrate against American parties.

In Intel, the Supreme Court identified some factors that a district court must take into consideration in the use of its discretionary power. Some of those factors are the nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court-judicial assistance.

These factors limit the scope and nature of discovery in an arbitral context, “having the effect of ‘internationalizing’ the efforts.’” Intel dissented vote state that “the status of a foreign entity as a “tribunal” may be subject to doubt if the entity possesses few tribunal-like characteristics, such as lacking independent adjudicators or not conducting adversarial proceedings based on proofs and argument.”

The U.S Supreme Court’s ruling in Intel created a split on whether § 1782 can be used in aid of private arbitration. According to the Second, Fifth and Seventh Circuits, private international commercial tribunals are not foreign or international tribunals within the scope of § 1782. On the other side, Sixth Circuit for years held that “discovery may be taken in aid of private arbitration.”

Until ZF[6]–almost two decades after–a significant number of courts held that the Section could be extended to private, international arbitration, but another set of courts held that the Section could not be extended[7], creating a sense of ambiguity and uncertainty until 2022.

ZF Automotive and the Concept of “Foreign or International Tribunal”

Interesting are the outcomes and rationale from Zf Automotive. Since the § 1782 change from “any court in a foreign country” to “foreign or international tribunal” reflects the intended to remedy the limitations previously imposed on the kind of adjudicatory body that the American courts could assist, recognizing that “the interest of the United States in peaceful settlement of international disputes is not limited to controversies to which it is a formal party,” nor to those occurring before tribunals “established by a treaty to which the United States was a party”[8] or those occurring in foreign courts.

The Commission noted that the “word ‘tribunal’ is used to make it clear that assistance is not confined to proceedings before conventional courts.” The real question is what a conventional and non-conventional courts are.

The modern hint was given in those awards. Defining “Tribunal” in context standing alone, can be used broadly to refer to any adjudicatory body. Statutory history shows Congress used “tribunal” in the broader sense to include administrative and quasi-judicial proceedings abroad, not just formal courts. However, when “tribunal” is attached to the modifiers “foreign or international,” the phrase is “best understood to refer to an adjudicative body that exercises governmental authority.”

The Court established that the analysis focuses on the source of the tribunal’s authority. On one hand, “foreign tribunal” is one that exercises governmental authority conferred by a single nation. On the other hand, an “international tribunal” is one that exercises governmental authority conferred by two or more nations. This means those nations have imbued the tribunal with official power to adjudicate disputes.

Smit on the contrary–in 1998–held that the “drafters wanted to make the assistance provided for available to all bodies with adjudicatory functions,” however, it would be an odd assumption to make about a private adjudicatory body, which is typically governed by the rules prescribed by the private parties who created it.

To sum up, only governmental or intergovernmental adjudicative bodies imbued with governmental authority either by one or multiple nations satisfy the statute requirements, limiting private international arbitration.

Post-ZF and The Supreme Court’s New Approach to § 1782

Before ZF, several entities and bodies that have been held to fall within the scope of the statute shared few to little characteristics with traditional courts. There were cases when some entities and bodies were not part of the judicial branch and district courts still allowed discovery.

After the clear decision of the U.S. Supreme Court, federal courts may start limit the applicability of § 1782 to fall within the Supreme Court’s “new boundaries.” Thus, “it is likely that a broad range of bodies will be found to fall within those boundaries and continue to be considered “foreign or international tribunals” under the statute pursuant to the wide spectrum established in Intel[].”

The real question is which entities can fall under the scope? The following chart illustrates which entities were considered international or foreign tribunals.

The “binding factor” concerns whether the entities or bodies conducting the proceedings can issue a binding decision subject to judicial review. This issue is particularly relevant in arbitration awards, where the scope is narrower, as there is no judicial review or “second instance,” and the awards are final.

Interesting will be in a few years know how the new cases will be solved with the new approach. According to the new criteria, it seems like some of the above-mentioned agencies would not be considered as foreign or international arbitration, at least, with certainty not bar associations.

Conclusion and Future Challenges

Since the Supreme Court has set a very high threshold, § 1782 discovery will usually not be available in most international arbitrations, whether they are based on contracts or investment treaties. Still, § 1782 discovery may be used in limited situations, such as before certain special arbitral tribunals with enough governmental authority, or to assist court proceedings connected to arbitration abroad, including actions to enforce or annul arbitral awards.

Federal district courts must be mindful of both the strong federal policy favoring arbitration by the Supreme Court and the parties’ arbitration agreement and it is precisely at this point where the parties after ZF must take a more delicate approach to avoid negative outcomes.

Lastly, the parties must think before drafting any arbitration compromise since parties will likely choose arbitration as a dispute resolution method, and to avoid any inconvenient when seeking discovery in the U.S. it is important to acknowledge the rationale behind ZF and choose a forum or seat that can be encapsulate within the definition of international or foreign tribunal.

Nevertheless, the parties must be extra precautions during the negotiations, and perhaps they will be able to obtain discovery with the same scope as § 1782 and “[t]hese arbitration clauses can be seen as “private statutes” that govern most aspects of the relationship between applicable parties to the contract.”