Arbitration Bodies Should Be Considered Tribunals under S. 1782
Boesel, Scott R., Albany Law Review
The purpose of this Note is to analyze the Second Circuit's decision in NBC v. Bear Stearns & Co.(1) and its interpretation of Title 28, [sections] 1782 of United States Code. The statute governs the obtaining of evidence in the United States for use in judicial proceedings abroad.(2) The relevant language of the statute for purposes of this Note is the phrase "foreign and international tribunals." The court in NBC concluded that an International Chamber of Commerce [I.C.C.] arbitration proceeding was not considered a tribunal within the scope of the statute.(3) This Note will argue that arbitration tribunals were intended to be included within the scope of [sections] 1782 and the Second Circuit should not have used the tribunal distinction as the basis for its decision.
Prior to NBC, there existed a difference of opinion regarding the "foreign and international tribunal" language of [sections] 1782.(4) The Southern District of New York concluded in In re Technostroyexport(5) that an arbitral body was intended to be included in the language of [sections] 1782, but the court would not bypass the arbitrator's authority and allow discovery.(6) Because the Technostroyexport court did not cite to any authority for its determination that arbitration tribunals were to be included in the language of the statute, a subsequent Southern District ruling ignored the Technostroy holding; the court in In re Medway Power Ltd.(7) ruled that arbitration was not intended by Congress to be included within the scope of [sections] 1782.(8) In the NBC case, the judges attempted to resolve the split between the two prior cases involving this issue.(9)
Part II of this Note will discuss the In re Technostroyexport, Medway and NBC decisions and distinguish the different situations in each case.(10) It is the position of this Note that the decision by the Technostroy court to include arbitral tribunals within the language of [sections] 1782 should have been followed in Medway and NBC. The statute should be read to encompass arbitration by a private international tribunal such as the International Chamber of Commerce International Court of Arbitration (I.C.C. Court).
Part III of the Note will document the increased use of arbitration in recent years as well as the history and organization of the I.C.C. Court in relation to this increase.(11) Part IV will examine the legislative history and the secondary authority behind the creation of [sections] 1782.(12) Part V will combine Parts II, III and IV to analyze why the decision in the NBC case was flawed.(13) The sixth and final part of this Note suggests that district courts should not deny discovery requests by arbitrarily interpreting Congress' intent when enacting the statute, but should use the broad discretion granted by [sections] 1782 to make their decision.(14)
II. THE CASE HISTORY
A. NBC Case
In January of 1998, the District Court for the Southern District of New York was asked to decide `whether to enforce subpoenas served by NBC upon parties with whom it was involved in arbitration proceedings.(15) The district court held that private commercial arbitration is not included in the language of [sections] 1782.(16) The Court of Appeals for the Second Circuit affirmed this decision.(17) The arbitration proceeding was to take place through the I.C.C. Court based in Paris, France.(18) The dispute involved NBC and TV Azteca (Azteca), a Mexican television broadcasting company, and five of Azteca's financial advisors (Azteca parties).(19)
The background of the case is necessary to introduce the underlying issue. In 1994, Azteca and NBC entered into an agreement in which NBC was to supply services and programs to Azteca in exchange for a compensation warrant from Azteca.(20) A dispute about the compensation warrant arose in 1997.(21) Azteca claimed the compensation included the right of NBC to purchase 10% of Azteca's then privately held stock and the right to participate in 10% of any future securities offerings in which Azteca might be involved. …