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The Second Circuit Confirms Its Precedent Denying § 1782 Discovery in Private International Commercial Arbitration, Maintaining Conflict Among Circuits

Posted by Marc R. Labgold, Ph.D. | Jul 15, 2020 | 0 Comments

In a decision issued on July 8, 2020, the Court of Appeals for the Second Circuit addressed two questions concerning international commercial arbitration: (1) whether private international commercial arbitrations are proceedings for which § 1782 may be invoked and, if not, (2) whether CIETAC arbitration is a private arbitration, and therefore outside the scope of 28 U.S.C § 1782.  In re Guo, No. 19-781, 2020 WL 3816098 at *5 (2d Cir. July 8, 2020).  

In simple terms, § 1782 provides for federal judicial assistance with respect to discovery of evidence from third parties, for use in foreign proceedings.  Upon the “application of any interested person,” a district court may, in its discretion, “order [a person] to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal”.  28 U.S.C. § 1782(a).

Section 1782 imposes mandatory requirements, including: “(1) the person from whom discovery is sought resides (or is found) in the district of the district court to which the application is made, (2) the discovery is for use in a foreign proceeding before a foreign [or international] tribunal, and (3) the application is made by a foreign or international tribunal or any interested person.” Mees v. Buiter, 793 F.3d 291, 297 (2d Cir. 2015), quoting Brandi-Dohrn v. IKB Deutsche Industriebank AG, 673 F.3d 76, 80 (2d Cir. 2012).

The Second Circuit had previously analyzed the contours of the statute's “foreign or international tribunal” requirement with respect to international arbitration in National Broadcasting Co. v. Bear Stearns & Co., 165 F.3d 184 (2d Cir. 1999) (“NBC”).  In NBC, the Court considered whether a private commercial arbitration administered by the ICC was a “proceeding in a foreign or international tribunal” for purposes of § 1782(a).  The Court concluded it was not, holding that the phrase “foreign or international tribunal” does not encompass “arbitral bod[ies] established by private parties.” Id. at 191. 

Subsequent to NBC, the Supreme Court addressed issues concerning §1782 discovery, but did not address whether §1782 applied to private international arbitration tribunals.  Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004).

The Second Circuit has now confirmed “NBC remains binding law in this Circuit.”  In re Guo, 2020 WL 3816098 at *5.

In In re Guo, the Claimant ("Guo") initiated an international arbitration pending in the People's Republic of China and administered by the China International Economic and Trade Arbitration Commission (“CIETAC”).  Guo filed his petition for discovery pursuant to 28 U.S.C. § 1782(a) in the United States District Court for the Southern District of New York, seeking discovery from four investment banks. The District Court, relying on NBC, denied Guo's petition concluding CIETAC is more akin to a private arbitral body than it is to a governmental tribunal or “other state-sponsored adjudicatory bod[y]”. Id. at *2.

On Appeal, the Second Circuit was “persuaded that CIETAC panels function in a manner nearly identical to that of private arbitration panels in the United States” concluding “CIETAC arbitration is best categorized as a private commercial arbitration for which § 1782 assistance is unavailable.” Id. at *8.  Accordingly, the Court concluded that “Guo may not rely on § 1782 to request discovery”.  Id.

While In re Guo resolves any doubt as to the current state of the law in the Second Circuit, it remains in conflict with the applicable precedents in the Fourth and Sixth Circuits.  

About the Author

Marc R. Labgold, Ph.D.

Marc R. Labgold, PhD, MCIArb, FBiam is a registered U.S. patent attorney with nearly 30 years of experience specializing in patent litigation and international commercial arbitration.  His clients are recognized leaders in their respective industries – including leaders in the biotech, chemical, pharmaceutica...

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