New York University Public Law and Legal Theory Working Papers

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Article

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Forthcoming in Franco Ferrari, ed., The Limits to Party Autonomy in International Commercial Arbitration

Abstract

We examine whether the parties to international commercial arbitration ought to have access to discovery through the federal courts of the United States. 28 U.S.C § 1782 permits U.S. courts to compel the exchange of information “for use in a proceeding in a foreign or international tribunal.” It is unclear whether this language covers proceedings before private arbitral tribunals. As far as policy is concerned, previous approaches to this question have focused on an important tension. On the one hand, judicially compelled discovery appears to be incompatible with the speed and simplicity often regarded as essential characteristics of private arbitration. On the other hand, when an arbitration agreement contemplates such discovery, courts ought to give effect to the fundamental policy of respecting the will of the parties. We suggest that courts considering § 1782 applications ought to go beyond these essentialist and contractarian approaches and take into account broader public interests. This requires consideration of: the interests of non-parties who may be targeted for discovery; the burden the proceedings might place on U.S. courts and implications for the courts’ ability to generate and deliver public goods; whether the proceedings will circumvent existing limitations on discovery or in some other way compromise the integrity of U.S. courts; and the impact on providers of U.S. legal services. We support our policy analysis through a detailed review of recent applications under § 1782, including those that did not result in published opinions. Our empirical analysis reveals as-yet unrecognized ways in which § 1782 has been used by private parties to international commercial arbitration to circumvent both foreign and domestic limitations on pre-filing discovery and pre-judgement asset discovery. These findings, which we hope will motivate further inquiry, suggest that U.S. courts ought to be cautious in their willingness to extend § 1782 discovery to private litigants in international commercial arbitration and that systemic oversight is warranted to ensure that § 1782 applications do not adversely affect U.S. courts.

Date of Authorship for this Version

11-2015

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