Insurance and reinsurance arbitrations outside the United States sometimes require the taking of evidence in the United States. Under federal law, “[t]he district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation.” 28 U.S.C. § 1782. Whether a private, commercial arbitration proceeding is considered a “foreign tribunal” for purposes of 1782 has been a controversial issue. Recently, in a non-insurance case, a New York federal court held that an arbitration before the London Maritime Arbitration Association is a “foreign tribunal.”
Although this case is not an insurance or reinsurance case, it is instructive in the context of private commercial arbitration, which is where most insurance and reinsurance arbitrations are found (when not in court). In In Re Ex Parte Application of Kleimar N.V., a New York federal court was asked by a party to a London arbitration to issue a discovery order and subpoena on a third-party. No. 16 MC 355, 2016 WL 6906712 (S.D.N.Y. Nov. 16, 2017). The court allowed the discovery and the third-party moved to strike the discovery order and the subpoena. Among the arguments was that the London arbitration was not a “foreign tribunal” and, therefore, the requirements of § 1782 were not met. This very same scenario can happen in a London insurance or reinsurance arbitration, where the parties seek discovery in the United States.
In holding that the London arbitration was a “foreign tribunal” for purposes of § 1782, the court relied on a US Supreme Court case suggesting that foreign private arbitrations come within the scope of § 1782. Intel Corp. v. Advanced Miro Devices, Inc., 542 U.S. 241 (2004). The court noted that the Second Circuit has held that foreign private arbitration proceedings are excluded from qualifying as § 1782. Those cases, however, were all before the more recent Supreme Court dicta and the Second Circuit has yet to rule on this issue post-Intel.
The court also noted the other circuit and district courts that have found a private foreign arbitration to be a “foreign tribunal.” In fact, the court related that several courts have already found that the London Maritime Arbitration Association is a foreign tribunal.
The focus in this case (and in others) has been on an arbitration taking place under the auspices of an arbitral organization. If, however, the arbitration is not before an arbitral body, will an ad hoc private foreign arbitration still be considered a “foreign tribunal”? The answer to this question, and whether the Second Circuit will join some of the other circuits and find that private foreign arbitrations are a “foreign tribunal,” will have to wait for another day.