Eleventh Circuit Vacates Opinion Holding International Arbitrations "Foreign Tribunals" under 28 U.S.C. § 1782 | Practical Law

Eleventh Circuit Vacates Opinion Holding International Arbitrations "Foreign Tribunals" under 28 U.S.C. § 1782 | Practical Law

The US Court of Appeals for the Eleventh Circuit vacated a prior decision holding that international arbitrations are "foreign tribunals" for purposes of discovery under 28 U.S.C. § 1782 in Application of Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc. In its new ruling, the court held that deciding the issue of whether an arbitration is a foreign tribunal for purposes of 28 U.S.C. § 1782 was not essential to resolution of the parties' dispute because discovery was available on other grounds.

Eleventh Circuit Vacates Opinion Holding International Arbitrations "Foreign Tribunals" under 28 U.S.C. § 1782

by Practical Law Litigation
Published on 14 Jan 2014 • USA (National/Federal)
The US Court of Appeals for the Eleventh Circuit vacated a prior decision holding that international arbitrations are "foreign tribunals" for purposes of discovery under 28 U.S.C. § 1782 in Application of Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc. In its new ruling, the court held that deciding the issue of whether an arbitration is a foreign tribunal for purposes of 28 U.S.C. § 1782 was not essential to resolution of the parties' dispute because discovery was available on other grounds.
On January 10, 2014, the US Court of Appeals for the Eleventh Circuit vacated its previous decision in Application of Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc. (No. 11-12897, (11th Cir. Jan. 10, 2014); 685 F.3d 987 (11th Cir. 2012)). In its earlier opinion, the court had ruled that a private arbitral tribunal should be considered a "foreign tribunal" for purposes of discovery under 28 U.S.C. § 1782. After oral argument, the court decided sua sponte to vacate that ruling because discovery was available on other grounds. Therefore, determining whether a private arbitral panel may be considered a foreign tribunal was unnecessary.
A party to a shipping billing dispute, Consorcio Ecuatoriano de Telecomunicaciones (CONECEL), filed an application for discovery under 28 U.S.C. § 1782 in the Southern District of Florida for use in proceedings in Ecuador. CONECEL was party to an arbitration regarding nonpayment under a contract and planned to bring related civil and private criminal suits. CONECEL provided a detailed explanation of its internal investigation into the matter in its memorandum of law. It also described the anticipated civil and criminal suits. Additionally, CONECEL's legal counsel submitted a declaration to further explain the bases for the actions the company planned to bring. In its most recent holding, the Eleventh Circuit ruled that the district court properly ordered discovery because the anticipated civil and private criminal suits "were within reasonable contemplation."
In holding that the potential actions should be considered foreign proceedings, the court noted that the history of Section 1782, including several revisions broadening the language of the statute, revealed that Congress wished to "strengthen the power of district courts to respond to requests for international assistance." Discovery was appropriately granted even though proprietary and confidential information was requested because the application was narrowly tailored and covered only information that was undeniably at issue between the parties.
In light of the court's new opinion, the question of whether a private arbitral panel would qualify as a foreign tribunal for purposes of discovery under 28 U.S.C. § 1782 remains unsettled in the Eleventh Circuit.