Academic journal article Suffolk Transnational Law Review

Eleventh Circuit Holds Private Commercial Arbitration Panel Is a "Tribunal" for Purposes of 28 U.S.C. 1782

Academic journal article Suffolk Transnational Law Review

Eleventh Circuit Holds Private Commercial Arbitration Panel Is a "Tribunal" for Purposes of 28 U.S.C. 1782

Article excerpt

Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., 685 F.3d 987 (11th Cir. 2012).

In a global economy, the ability to obtain evidence located in foreign jurisdictions is necessary for international arbitration to be effective. (1) Yet, despite worldwide efforts to address this persistent concern, United States courts have continued to disagree on whether to grant judicial assistance to certain foreign governmental agencies. (2) In Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., (3) the United States Court of Appeals for the Eleventh Circuit took a prolific step toward authorizing broad discovery assistance when it interpreted "tribunal" according to 28 U.S.C. [section] 1782. (4) The Court rejected the defendant's challenge that the requested evidence was not being used in a proceeding, concluding that a private commercial arbitration panel was a foreign tribunal within the meaning of the statute. (5)

Consorcio Ecuatoriano de Telecomunicaciones S.A. (CONECEL) and Jet Air Service Ecuador S.A. (JASE) had a contractual relationship for over a decade. (6) However, in 2008, the relationship between the two parties deteriorated after CONECEL conducted an internal audit and determined that JASE had been improperly overbilling by millions of dollars. (7) JASE denied the allegations and claimed CONECEL failed to pay multiple invoices in 2008. (8) CONECEL intends to file a civil action against its former employees for collusion in the civil-mercantile court of competent jurisdiction in Quito, Ecuador. (9) Because, under Ecuadorian law, a party must present its evidence up front along with the pleadings, CONECEL sought assistance under 28 U.S.C. [section] 1782. (10)

On July 14, 2010, CONECEL filed an ex parte application for judicial assistance in the District Court for the Southern District of Florida in order to obtain evidence pursuant to 28 U.S.C. [section] 1782. (11) On July 20, 2010, the district court granted the ex parte application and authorized CONECEL to issue and serve a subpoena on JAS USA seeking the discovery outlined in CONECEL's application. (12) JASE moved to intervene to quash the subpoena and to vacate the order granting the application. (13) On petition for review, the Eleventh Circuit affirmed the district court's decision to grant the section 1782 discovery application, holding that the arbitration tribunal before which JASE and CONECEL's dispute is now pending is a foreign tribunal for purposes of the statute. (14)

The growth of international business activities has increased the frequency of transnational conflicts. (15) Motivated to avoid the costs and uncertainty of litigation among the world's diverse judicial systems, parties have frequently utilized arbitration as an alternative for resolving disputes. (16) Nevertheless, for international arbitration to continue as a viable option, judicial assistance in obtaining evidence is needed worldwide. (17)

Since the mid-nineteenth century, Congress has authorized the federal courts to grant discovery requests in connection with foreign proceedings. (18) Congress enacted its first statute in 1885 to permit federal courts to assist foreign bodies in acquiring evidence within the United States. (19) Recognizing the Act of 1855's shortcomings, Congress passed new legislation in 1863.20 In 1948, Congress modified the Act of 1863, codifying the amended version as 28 U.S.C. [section] 1782.21 Accepting the reality that the even more changes were necessary to deal with evolving needs of the international community, Congress created the Commission on International Rules of Judicial Procedure in 1958.22 Today, the Committee's findings from 1964 remain in effect and reflect the current version of 28 U.S.C. [section] 1782. (23)

The plain reading of 28 U.S.C. [section] 1782 authorizes the federal courts to cover proceedings "in a foreign or international tribunal. …

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