New York Federal Courts Expand Discovery for Use in Foreign Tribunals

In two important decisions, New York federal courts significantly expanded the scope of discovery under 28 U.S.C. § 1782, the law that allows foreign litigants to obtain evidence in the United States for use in foreign tribunals.

Section 1782 provides that a federal court may order a U.S. person (including a company) “to give his testimony or statement or to produce a document or other thing for use in a proceeding a foreign or international tribunal.”

The question on which federal courts have not agreed is whether the term “tribunal” included private foreign-based arbitrations as well.  The recent trend has been to include arbitrations within the scope of “tribunals,” but it was not until the New York district court decided In re Ex Parte Application of Kleimar late last year that this issue had been squarely ruled on by a New York federal court.  The decision opens to the door for American-style discovery in New York in aid of foreign commercial arbitrations and presents significant opportunities for interested parties, including those involved in arbitrations outside the U.S.

In another, unrelated, matter, the same court (though a different judge) ruled that the words “for use” in § 1782 do not require that the foreign arbitration or litigation be ongoing.  The case of Petition of Esther Kiobel, involved a § 1782 application to obtain records from the law firm Cravath, Swaine & Moore for use in an arbitration in the Netherlands which was being contemplated but had not yet been commenced.  Cravath argued that the petitioner’s statement that she “expected” to file the action shortly was too speculative to permit discovery under § 1782.  The court disagreed, ruling that so long as the foreign proceeding is “within reasonable contemplation,” discovery under § 1782 was appropriate.

The two decisions represent a continuing trend to expand the scope of discovery for use in foreign proceedings under § 1782.