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Navigating the Uncharted Water of §1782: Impact on International Arbitration and Evidence Collection

Yuvraj Sharma*



In recent years, an increasing number of U.S. courts have been involved in cases dealing that revolve around the interpretation and application of 28 USC §1782. This has made section 1782 more popular among foreign parties involved in legal or arbitration proceedings outside the United States who want to leverage the broad discovery procedures available in the U.S. However, the language of the statute has generated significant debate about its applicability. The central question revolves around whether it can be used in private commercial arbitrations and whether U.S. courts can compel the production of document loaded in other countries. This article specifically addresses the later question and explores how the current legal landscape impacts international arbitration and what is the applicability of this with respect to India.


Understanding Section 1782 and its application International Arbitration


Section 1782 enables a U.S. federal district court to assist foreign legal proceedings by ordering the production of documents and witness depositions. Typically initiated through a unilateral application, its docent requires the foreign proceeding to be active but must be reasonably contemplated. For this assistance, three criteria must meet: “1) the request originates from a foreign or international tribunal or an interested party”, “2) the requested information is intended for use in a foreign or international tribunal”, and “3) the person subject to discovery reside or is found in the district where the request is made”. If these conditions are satisfied, the district court may, at its dictation, grant the request. The Supreme Court’s intel decision introduced four factors for courts to consider when exercising the discretion:

  1. Whether the subject of discovery is a party to the foreign proceedings (which makes it harder to obtain discovery).

  2. The willingness of the foreign court to accept U.S. assistance.

  3. Is the §1782 request being made in an effort to bypass limitation on gathering evidence in a foreign jurisdiction?

  4. Is the request unduly invasive or imposing an excessive burden on the party being asked to provide the asked information?

Before the Intel decision, two circuit court had ruled on whether section 1782 applied to Private International Arbitration (“Nat. Broad co. v. Bear Stearns & Co., Inc. and Republic of Kazakhstan v. Biederman Int’l”). Both courts had concluded that section 1782 did not apply to such cases. However, in Intel, Justice Ginsberg cited Professor Hans Smit, a key contributor to Section 1782’s drafting, who stated that the term “tribunal” included arbitration. This led to 18 years of section 1782 cases being brought in support of arbitration, creating a split in district and circuit courts. The Supreme Court took up the case to resolve this division.


The Uncertainty surrounding of use section 1782 discovery


The Servotronics Inc. v. Rolls Royce Plc (“Servotronics”) case, which revolves around the interpretation of Section 1782 in U.S. Law. The key issue was whether an international tribunal can be classified as a “foreign or international tribunal” under section 1782, determining its applicability in International Arbitration cases. Notably Two U.S. circuit courts, the Fourth and Seventh circuits, reached conflicting conclusions on this matter. The Fourth Circuit allowed Section 1782 discovery in International arbitration cases, while the Seventh circuit denied it. This circuit split had created legal uncertainty and prompted Servotronics to appeal the case to the Supreme Court in December 2020. The historical context of the case and the diverse interpretations across different legal circuit have been comprehensively documented in various sources, and for brevity, these details will not be further elaborated on this post.  What’s notable is that multiple parties, including the U.S. Department of justice, have significance amicus brief in the Supreme Court proceedings, highlighting the significance of the issue and the potential implications of the court’s decision.


A closer look of Implications of ruling

The Supreme Court’s decision in this case settles a legal dispute and clarifies the rules for getting information in International arbitrations in the U.S. Now, it’s straightforward if the arbitration group is private, it’s not subject to U.S. discovery rules under §1782. This decision makes international arbitration more predictable but limits the choices for people making contracts. If the courts had allowed information gathering in private arbitrations, parties could choose whether to follow standards rules or exclude U.S. discovery into here agreements.

The decision is likely good news for U.S. parties but not so great for foreign parties. People in arbitration now know they can’t use §1782 to get information in the U.S This clarity has pros and cons. Foreign parties can no longer seek information in the U.S., which was allowed in some areas. But parties in the U.S. may like this decision because it limits the information they can access in foreign arbitration, making things fairer between them and the people they are making agreement with.

Section 1782, which allows parties U.S. discovery for international arbitration, has gained more attention recently. This is particularly true for private international commercial arbitration outside the U.S. However, while it can be a valuable tool for obtaining information that might otherwise be hard to access, it also raises important issue in the context of arbitration.

Arbitration is meant to be a less burdensome alternative alive to litigation, with discovery usually limited by chosen arbitration rules or the law of the arbitration’s location often outside the U.S. But using section 1782 to get overseas discovery can significantly expand the available information beyond what arbitration forums discovery rules, but the fact that the requested information can’t be obtained there doesn’t determine the outcome.

This has significant implications for International arbitration. In district allowing extraterritorial Section 1782 discovery, companies within their jurisdiction may be compelled to produce documents from their affiliates in unrelated countries, which would otherwise be off-limits in the arbitration. Similarly, section 1782 could force testimony from witnesses, including third parties, that might not otherwise be use in the arbitration.

Arbitration is typically based on party’s agreement, including the choice of rules and the arbitration’s location, which dictate the extent of discovery, non-U.S. entities may not even know about it when signing arbitration agreements. Some argue that unilateral section 1782 applications could violate arbitration agreements.

Notably section 1782 potential uses have faced critics. Some courts are concerned about potential abuse and “forum shopping” for information unrelated to the U.S commentators also point out that using Section 1782 in foreign arbitrations may lead to controversial results, such as allowing preheating discovery for arbitrations outside the U.S., which domestic parties cannot do under the Federal Arbitration Act.

Moreover, obtaining internal documents of non-US. Entities through their U.S. affiliates jurisdiction extension could have far reaching consequences. English courts, for example have been hesitant to restrain section 1782 discovery. Foreign jurisdiction hasn’t enacted similar mechanism as the U.S., and some have expressed discomfort with Section 1782.  Overall while tribunal and courts outside the U.S. are open to evidence obtained through section 1782, there are still limits and concerns about its applications.

A closer look at legal stance in India

In the context of Indian law, the Code of Civil Procedure, 1908 (CPC) places strict limitations on the discovery process, ensuring it is not overly broad or speculative. Discovery tools, such as interrogatories, are subject to relevance, and affidavits of documents generally hold conclusive weight. However, when dealing with legal matters involving entities or individuals from the United States, there is a unique avenue available. Through an application in a U.S. Federal Court under 28 USC §1782 once can obtain U.S. style discovery allowing broader access to documents and the examinations of witness a process that often leads to pre-trial settlements.

Shifting the focus, the recent 2015 Amendments to the Arbitration and Conciliation Act of 1996 in India has reinstated, to some extend the principle established in the Bhatia International judgement. This amendment, affecting Section 2(2) of the 1996 Act, affirms that the provisions of Part-I, including interim relief, are applicable to all arbitrations, including those with a foreign seat, unless expressly or implicitly excluded the parties. The term “subject to an agreement to the contrary” introduces a level of ambiguity, as it does not specify whether the agreement must be express or implied.

In case without an express contrary agreement, Indian courts have issued judgements on the concept of an ‘implied agreement’ to exclude the application of Part I of the 1996 Act and its Section 9. This is implied exclusion of Indian Arbitration Law in foreign seated arbitrations has been a subjected of extensive debate among legal practitioners and scholars. To understand the impact of the 2015 Amendment Act on international commercial arbitration governed by foreign law, it is essential to delve into the legal stance on ‘implied exclusion.’

Indian courts have provided examples of situations in which they used implied exclusion to exclude Part I's application. This exclusion is predicated on a number of variables, such as the arbitration agreement's controlling law, the seat of the arbitration, and the procedural procedures of international arbitral institutions. A few prominent cases that highlight this strategy include Videocon Industries Ltd. v. Union of India, Yograj Infrastructure Ltd. vs. Ssangyong Engineering Construction Co. Ltd., Hardy Oil Gas Ltd. vs. Hindustan Oil Exploration Company Ltd., and Harmony Innovation Shipping Ltd. v. Gupta Coal India Ltd.

These cases highlight that specific provisions in the contract, such as the seat of arbitration, the governing law of the agreement, and the law governing the conduct of arbitration, can imply the exclusion of Part I of the 1996 Act. However, a recent unreported judgement by the Madras High Court took a difference stance. The court held that in a Pre-Balco Arbitration Agreement, even with the explicit selection of foreign law, it parties allow approaching Indian Courts for interim measures, Section 9 of the Act becomes valid and applicable. The court emphasizes the importance of the precise language used in contracts and arbitration agreements, noting that the current case is unique since it has a retention or saving clause, which was not present in previous decisions. This emphasizes how complex legal circumstances might be in international arbitration and how important it is to have precise language in arbitration agreements. Legal disputes in Indian courts are likely to arise from the different interpretations that result from different judgments, especially when it comes to preliminary topics.

Concluding Remarks


The court's latest ruling is an important step forward for international arbitration and the rules governing the gathering of evidence in these cases. This historic decision has far-reaching effects, and a thorough appreciation of its significance necessitates examining a number of crucial aspects of the opinion.

Firstly, international arbitration now has much-needed clarity thanks to the court's ruling. It sets a standard for the collection and presentation of evidence in these kinds of disputes, thereby impacting the arbitration procedure as a whole. Parties involved in international arbitration proceedings may now anticipate the rules and guidelines guiding the evidence gathering process thanks to this increased clarity.

Second, notwithstanding its prior assistance in obtaining evidence in instances involving international arbitration, the United States is now limited in its involvement by the current rule. The landscape of international arbitration has changed significantly as a result of this restriction on U.S. court aid, since parties are now required to rely more on the arbitration process itself rather than requesting substantial support from U.S. courts.

Furthermore, it is imperative to bear in mind that the current decision in Intel Corp v. Advanced Micro Devices, Inc. is not as far-reaching as it was in the past. The Intel Corp case opened the door to more extensive U.S. assistance in foreign lawsuits. The New Ruling limits the situations in which U.S. courts can help in international arbitration issues, marking a change from this more expansive understanding. The recent decision primarily focuses on private arbitral bodies, as opposed to those with clear government authority. This distinction is crucial because it defines the types of cases affected by the ruling. Matters involving private arbitral bodies will see more significant changes in the way evidence is handled.  It remains uncertain whether this decision applies to international treaty-based institution such as ISCID. The extend of the ruling’s application to these institution’s, which have distinct procedural rules, is still a matter of debate.

Lastly, as is stands, §1782, which governs the assistance of U.S. courts in the discovery process, does not apply to international commercial and significant investment arbitration. This means that for the foreseeable future, the discovery in International arbitration. Parties involved in these arbitration cases will need to adapt to this new legal landscape and find alternative means of evidence collection and presentations.


*Yuvraj Sharma, 4th year, BA. LL.B from the School of Law, Narsee Monjee Institute of Management Studies, Hyderabad.

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