Eleventh Circuit Court of Appeals Resolves a Disputed Issue of Law - U.S. Discovery is Available in Private International Commercial Arbitration Proceedings

Eleventh Circuit Court of Appeals Resolves a Disputed Issue of Law - U.S. Discovery is Available in Private International Commercial Arbitration Proceedings

By Elliot E. Polebaum and Eugene N. Hansen and Helene Gogadze One of the challenges for parties and counsel in international arbitration is obtaining evidence from third parties because arbitral tribunals generally lack the authority to compel third parties to produce evidence. However, when the third parties are located in the United States and the seat of the arbitration is outside of the United States, there may now be an opportunity to obtain third party discovery in private international commercial arbitration. In a recent decision, the U.S. Court of Appeals for the Eleventh Circuit resolved a disputed issue of law and decided that parties in international commercial arbitration may petition the district court in the United States to take discovery from third parties located in the district. The decision is binding on the courts in the Eleventh Circuit, which includes the states of Florida, Georgia and Alabama, and will likely be influential in other circuits in future determinations on the availability of U.S. discovery in private international commercial arbitration proceedings. Section 1782 of Title 28 of the United States Code has attracted attention from parties and counsel in international arbitration. Section 1782 permits "any interested person" to seek from a United States district court a discovery order directing a person located within the district to produce documents, other tangible evidence, and testimony "for use in a proceeding in a foreign or international tribunal." A number of U.S. courts, including the Second Circuit and Fifth Circuit, have limited the application of § 1782, deciding that the judicial assistance of U.S. courts is not available to obtain evidence for use in private international arbitration proceedings. According to these courts, a "foreign or international tribunal" does not include an international arbitration tribunal.1

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