Originially from: World Arbitration and Mediation Review (WAMR)

State Law Remedies to the Federal Rule
of no Discovery in aid of Foreign Arbitral Proceedings
by Brian M. Cogan & David A. Sifre,
Stroock & Stroock & Lavan, LL.P.(New York, New York)
Introduction
U.S. federal courts have been highly accommodating in authorizing
discovery by U.S. residents of information for use in foreign litigation.
Most courts allow discovery even though a formal request has not been
made by the foreign tribunal, and similar discovery is not available in the
forum where the litigation is pending. The U.S. courts long ago abandoned
any requirement of reciprocity in deciding matters of discovery, reasoning
that such an approach would set an example for foreign states to emulate.
The U.S. Court of Appeals for the Second Circuit (perhaps the most
influential commercial court in the United States) recently decided a case
in which it placed substantial restrictions on the availability of U.S.
discovery procedures for foreign proceedings. In National Broadcasting
Company, Inc. v. Bear Stearns & Co., Inc., 165 F. 3d 184 (2d Cir. Jan. 26,
1999) ("National Broadcasting"), the court held that federal courts are
powerless to compel U.S.-based discovery when the foreign proceeding is
a private arbitration, rather than a state-sponsored court proceeding. Given
the important role of arbitration as a dispute-resolution mechanism in
international transactions, the decision will have-far reaching
consequences. Nevertheless, procedures exist under state laws which,
although they do not provide the same access to discovery as their federal
counterparts, may be used to fill the gap left by the National Broadcasting
decision.