AuthorCostabel, Attilio M.

    Section 1782 (**) of Title 28 of the United States Code is a tool of American Federal Civil Procedure that has recently gained increased interest. (1) It was built to assist foreign and international tribunals, and litigants before such tribunals, to get testimony or production of documents or things "for use in a proceeding in a foreign or international tribunal." (2) Federal district courts are competent to authorize such discovery giving the appropriate orders. (3)

    The history of [section] 1782 dates back more than one and a half century. Established for the purpose of synchronizing the American civil procedure with the international practice of Letters Rogatory, its present provision is the result of preoccupation of Congress for the extensive increase of the international transactions and resultant litigation. (4)

    Section 1782 is commonly described as "aid to foreign litigation," but recently it became apparent that the Statute may often be more of a problem than an "aid." (5) Conflicts arose among courts about the requirements for granting the aid, and the Supreme Court's seminal case Intel Corporation v. Advanced Micro Devices (6) seemed to have supplied an answer to all conflicts.

    Unfortunately, this was not the case, and it is not surprising, given that outside the United States there is no system identical to the American one; instead, many systems may be grossly or totally incompatible. (7) For example, some European systems may reserve to the forum judge the power to interrogate witnesses, and the depositions "American style" are abhorred and forbidden. (8) In such cases, the recourse of foreign parties to [section] 1782 may amount to illegal circumvention of the mandatory rules of the forum. (9)

    It so happened that many conflicts continued to exist, and some new ones started brewing in the recent years, such as the one that is the theme of this article: whether the parties to a foreign arbitration proceeding may avail themselves of the "aid" of [section] 1782. (10)

    As of today, the courts are sharply divided on the answer to this question, a good number holding that arbitration panels do qualify as "tribunals" under [section] 1782, (11) and a good number holding that they do not. (12)

    Examining the references of these cases reveals an even deeper conflict. For example, the In Re Babcock court held that an International Chamber of Commerce ("ICC") arbitration qualified as a tribunal under [section] 1782 and the KeyCite of the decision shows only nine negative treatments out of sixty seven cases, (13) while in In re an ARBITRATION in London, England between Norfolk Southern Corporation, the court held that a private arbitration in London, England, did not qualify as "tribunal," because the Intel Court's reference to "arbitral tribunals" included state-sponsored arbitral bodies but excluded purely private arbitrations, got only two negative treatments out of twenty two. (14)

    The disparate treatment may be due to the nature of the ICC as an "institutional" arbitration organization and the "private" nature of the London arbitration under review in that case, probably "ad hoc," but it is the visible symptom of the conflict. In other words, not all "arbitration panels" are created equal and there is no uniform treatment for all--the search for an answer still eludes the Court for want of uniformity. (15)

    On this background developed the saga of Servotronics. (16)


    An arbitration took place in London under the English CIArb (17) between Servotronics, Inc. of New York, the manufacturer of a valve for aircraft engines, and Rolls Royce, PLC, of London. (18) The dispute arose around the failure of a valve supplied by Servotronics to Rolls Royce during a test conducted in South Carolina on a Dreamliner aircraft of the Boeing Company. (19) The valve's failure caused damages to the aircraft. (20)

    Boeing sued Rolls Royce who eventually settled and sought indemnity from Servotronics, with whom they had a long-term agreement that included a CIArb Arbitration clause. (21) Upon initiation of arbitration, Servotronics filed an ex parte application in the U.S. District Court for the Northern District of Illinois asking for a subpoena compelling Boeing to produce documents for use in the London arbitration, under 28 U.S.C. [section] 1782(a). (22)

    The judge initially granted the requested subpoena and Rolls-Royce moved to quash, arguing that [section] 1782(a) does not permit a district court to order discovery for use in a private foreign commercial arbitration. (23) Boeing intervened and joined the motion to quash. (24) The judge then reversed course and quashed the subpoena, agreeing with Rolls-Royce and Boeing that [section] 1782(a) does not authorize discovery assistance in private foreign arbitrations. (25)

    Servotronics appealed, and the Seventh Circuit affirmed, holding that "A 'foreign or international tribunal,' within the meaning of the statute authorizing a district court to provide discovery assistance to such a tribunal, is a state-sponsored, public, or quasi-governmental tribunal, and the term does not include private foreign arbitration." (26)

    Servotronics then filed a petition of certiorari with the Supreme Court, where the question at long debated in the Courts below was finally articulated in a precise text:

    Whether the discretion granted to district courts in 28 U.S.C. [section] 1782(a) to render assistance in gathering evidence for use in "a foreign or international tribunal" encompasses private commercial arbitral tribunals, as the Fourth and Sixth Circuits have held, or excludes such tribunals without expressing an exclusionary intent, as the Second, Fifth, and, in the case below, the Seventh Circuit, have held. (27) The event stirred great interest in both the business and legal communities, and a plethora of Amicus Briefs were filed: seven in support of Respondents, Rolls-Royce PLC and The Boeing Company, (28) four in support of Petitioner, Servotronics, (29) and two, interestingly, in "support of neither." (30)

    The case was set for argument in August 2021, but soon after the Petitioner filed a letter notifying the Clerk of intention to file a Rule 46 motion to dismiss, and on September 29, 2021, the Court ordered dismissal upon joint stipulation of the parties. (31)

    Thus, the important question remains unanswered, and the deep conflict keeps reigning sovereign.


    Much ado about nothing? End of the story? Not so fast.

    At the same time as Servotronics, two other cases were unfolding on precisely the same issue: whether a [section] 1782 discovery aid could be allowed to litigants in a foreign arbitration.

    In Luxshare, LTD. v. ZF Automotive US, Inc., (32) a business dispute involving hundreds of millions of dollars in potential damages, arose between Luxshare, LTD and ZF Automotive US, Inc ("ZF USA"). Intending to start an arbitration proceeding in Munich, Germany, Luxshare applied to the Eastern District of Michigan and requested discovery under [section] 1782 from ZF USA and two of its Officers. (33) The Court granted Luxshare discovery on July 1, 2021 and granted its motion to compel on August 17, 2021. (34)

    In Fund for Protection Of Investors Rights in Foreign States v. Alixpartners, LLP, (35) a Russian corporation assignee of shareholder in a bankrupt nationalized private bank, challenged the expropriation of shareholder's bank interest by recourse to an arbitral panel established by a bilateral investment treaty between Lithuania and the Russian Federation. (36) The Fund for Protection sought assistance from the Southern District Court of New York, in order to obtain discovery from AlixPartners, LLP, a company with principal place of business in New York, for use in the arbitration proceeding. (37) The Court granted Fund for Protection recourse to [section] 1782 on July 15, 2021, a month before Luxshare obtained its motion to compel in its companion case. (38)

    ZF Automotive, the intended Plaintiff in the planned arbitration and the Petitioner in the Luxshare case, was now aware of the pending certiorari in Servotronics, and being wary that Servotronics might soon become moot (thus remaining with the only alternative of an uncertain appeal against Luxshare), filed petition for certiorari on December 7, 2020. (39) In fact, Servotronics was dismissed, as we know, on September 29, 2021. (40)

    In response to Servotronics' dismissal, Alixpartners took action and filed its own petition for certiorari, which was granted by the U.S. Supreme Court on December 19, 2021. (41) Both petitions emphasize that the ongoing circuit split and the uncertainty that it creates inflicts serious harm and that the uncertainty must be resolved by the Court, making sure that the vital question receives a conclusive answer. (42)

    It was fair to foresee that the Supreme Court would oblige, having already granted certiorari in Servotronics, its petition dismissed not by the will of the Court. (43) Alixpartners also asked that its case be decided together with ZF Automotive, (44) both asking the identical question (regardless of the different type of arbitration panels) and again the Supreme Court obliged, distributing for Conference both cases at the same date of December 3, 2021, then rescheduled for Conference on December 10, 2021 and granting certiorari the same day. (45)

    The stage is now set for a major pronouncement of the Supreme Court.

  4. [section] 1782 SERIES--SEASON 1--SERVOTRONICS

    Whether or not a new tide of Amicus Briefs will mount in the Companion Cases, the whole legal landscape has been widely traveled and explored in Season One, and one already has enough to dare to guess an answer to the question.

    In fact, the material available helps one understand why there is a conflict in the first place. Nowhere in the [section] 1782 Statute is there an explicit indication that Arbitration Panels are not given the discovery help of [section]...

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