Litigation and Alternative Dispute Resolution

U.S. Supreme Court Narrows Ability to Obtain Discovery in U.S. for Use in Foreign Private Arbitrations

Authors: Kyle J. Kolb and Rodger T. Quigley

With the continued growing use of arbitrations to resolve international disputes, whether U.S. courts can be used to obtain discovery for use in any foreign arbitration has been a hotly contested issue. The disagreement among U.S. courts on the issue meant review by the Supreme Court was likely.

This week, the Supreme Court issued a major decision regarding the requirements imposed under 28 U.S.C. 1782 (“Section 1782”) in ZF Automotive US, Inc., v. Luxshare, Ltd. Section 1782 authorizes parties that are interested in proceedings pending in a “foreign or international tribunal” to obtain discovery from U.S.-based persons to use in that foreign proceeding.

This is the first opinion issued by the Supreme Court on the requirements imposed under Section 1782 since its foundational decision in Intel.[1] The Court was asked to decide whether Section 1782 can be used to obtain discovery in the U.S. for use in private arbitrations abroad. The Court held that Section 1782 may not be used for that purpose in many instances.[2] This opinion did not otherwise limit the use of Section 1782 applications for discovery for foreign court proceedings, but it is nonetheless the Supreme Court’s first say on the scope of the statute in 18 years. The Court’s ZF Automotive opinion, which resolved a split amongst the lower courts, is a critical step towards clarifying Section 1782’s use going forward.

Section 1782 authorizes parties that are interested in proceedings pending in a “foreign or international tribunal” to obtain discovery from U.S.-based persons to use in that foreign proceeding. The Supreme Court was asked to decide the meaning of the phrases of “foreign tribunal” or “international tribunal” as applied to the two types of private arbitrations at issue in the case before them, which consolidated two cases into a single appeal. The Court found—unanimously (even after a spirited oral argument)—that neither of the arbitrations fit the statutory scheme, so Section 1782 discovery could not be obtained.

The first arbitration at issue was a “purely private” foreign commercial arbitration pending in Germany, which the U.S. District Court for the Eastern District of Michigan had ruled was a proceeding pending before a “foreign tribunal.”[3] The arbitration was required under a private contract between the parties to the arbitration, and the arbitration was pending before an arbitral body that was established under a German statute. The Sixth Circuit Court of Appeals denied a stay of the trial court’s ruling, and the Supreme Court then granted certiorari to allow the appeal to proceed.

The second arbitration at issue, which was consolidated with the first in the appeal to the Supreme Court, was one pending before an arbitral forum provided for under a bilateral investment treaty between Lithuania and Russia, regarding a dispute between a Russian national who had invested in a Lithuanian bank. The Second Circuit Court of Appeals applied a multi-factor test to determine that this arbitral forum was a “foreign or international tribunal” and allowed for the Section 1782 discovery to proceed.[4]

The consolidated appeals in ZF Automotive presented a ripe opportunity for the Court to weigh in. The Supreme Court’s opinion first applied a textual analysis to the text of Section 1782, finding that the use of “foreign” or “international” in the phrases “foreign tribunal” or “international tribunal” requires more than the location of the arbitration be outside the U.S. For example, the Court found that, “for a tribunal to belong to a foreign nation, the tribunal must possess sovereign authority conferred by that nation.” The Court found this interpretation to be supported by the statutory history behind Section 1782 and when viewed in light of the limitations on discovery in U.S. arbitrations governed by the Federal Arbitration Act. Summarizing, the Court held that “a ‘foreign tribunal’ is one that exercises governmental authority conferred by a single nation, and an ‘international tribunal’ is one that exercises governmental authority conferred by two or more nations. Private adjudicatory bodies do not fall within §1782.”

This definitional holding was easier for the Supreme Court to apply to the arbitration pending in Germany pursuant to a private contract, which the Court held could not be a “foreign or international tribunal.” With respect to the arbitration commenced under the bilateral investment treaty, the Court highlighted that whether it qualified as a “foreign or international tribunal” was a closer question. Future Section 1782 applicants may therefore have to litigate that issue in cases where the arbitral body has some intergovernmental aspects. The Court also noted that even quasi-private foreign arbitrations that serve as the “first-instance decisionmaker” that could later be reviewed in a foreign court could be considered a “foreign or international tribunal” for purposes of Section 1782’s requirements.

With those questions and others still working through the courts below, the use of Section 1782 remains a significant option for litigants involved in foreign arbitration proceedings to consider.


For more information on this alert or other restructuring & finance litigation matters please contact:

Kyle J. Kolb at +1 212 592 1514 or kkolb@herrick.com
Rodger T. Quigley at +1 212 592 1577 or rquigley@herrick.com

© 2022 Herrick, Feinstein LLP. This alert is provided by Herrick, Feinstein LLP to keep its clients and other interested parties informed of current legal developments that may affect or otherwise be of interest to them. The information is not intended as legal advice or legal opinion and should not be construed as such.


[1] Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004).

[2] ZF Automotive US, Inc., v. Luxshare, Ltd., 596 U.S. ___, 2022 WL 2111355 (2022).

[3] See Luxshare, Ltd. v. ZF Automotive US, Inc., No. 2:20-mc-51245, 2021 WL 2705477 (E.D. Mich. July 1, 2021).

[4] Fund for Prot. of Inv. Rts. in Foreign States Pursuant to 28 U.S.C. § 1782 for Ord. Granting Leave to Obtain Discovery for use in Foreign Proceeding v. AlixPartners, LLP, 5 F.4th 216 (2d Cir. 2021).

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