Originally from Limits to Party Autonomy in International Commercial Arbitration

INTRODUCTION

Should U.S.-style discovery be a feature of private arbitration? Traditionally, the answer has been a clear “no.” Avoiding U.S. discovery was understood to be one of the main reasons for choosing arbitration over litigation and, indeed, for avoiding the U.S. court system. In a remarkable turn, however, parties to both investor-state and commercial arbitrations taking place outside the United States have begun to request discovery. Even more remarkably, they have begun to call on U.S. federal courts for assistance in obtaining such discovery under a federal statute entitled “Assistance to foreign and international tribunals and to litigants before such tribunals,” codified at 28 U.S.C § 1782. The U.S. courts have diverged in their responses to these requests,  mostly because the applicable statutory provision is ambiguous  and the only U.S. Supreme Court decision to interpret it did not squarely consider its relevance in the context of commercial arbitration.  Section 1782, permits, but does not require, U.S. federal courts to provide discovery assistance to “foreign or international tribunals.” It is unclear whether private arbitral tribunals with foreign or international characteristics fall within the scope of this term, and, if they do, how U.S. federal courts ought to exercise their discretion in granting or denying requests.

We believe that cases involving requests to U.S. courts for discovery under 28 U.S.C. § 1782 raise a policy question of first-order importance in the law of civil procedure: to what extent can private parties, invoking the authority of a private agreement, control the resources of the publicly sponsored courts?  In other words, to what extent can private parties contract for procedure available only in a public court when they already have contracted for a non-public dispute resolution process that is characterized by an absence of such procedure?  Two of the authors have examined a variant on this topic, but that earlier work focused exclusively on parties to litigation who try to opt out of the ordinary rules of civil procedure while remaining within the public court system for the resolution of their dispute.  Now we consider parties to private foreign or international arbitration who try to opt into the public courts and the ordinary rules of civil procedure for the purpose of obtaining information while remaining in the arbitral system. 

Each of these scenarios raises the same general policy concerns about contracting for procedure, but the application to foreign or international arbitration forces us to consider at least two new issues. One of those issues is whether the U.S. courts should take the same approach to requests for discovery in connection with foreign or international arbitration as they do in connection with domestic arbitration. In other words, should contracting for procedure be equally acceptable whether it is in aid of domestic, foreign, or international arbitral proceedings? Another issue is whether requests for discovery for use in private arbitration merit the same response as requests connected to proceedings before public bodies such as foreign courts, or tribunals authorized by treaties? Or to put it another way, is placing U.S. judicial resources at the disposal of participants in private proceedings abroad any different from putting them at the disposal of participants in non-U.S. public proceedings?