Critical evidence, needed for the resolution of a dispute abroad, may be located in the United States. A key witness, whose testimony is essential to the foreign litigation, may reside in the U.S., or important financial or other documentary evidence may be found only in this country. As we have discussed in previous articles, section 1782 of the United States Code ("section 1782") offers a powerful tool for the collection of evidence in the U.S. for use in foreign legal proceedings.

The statute allows either a foreign tribunal or a party to foreign proceedings to apply directly to a U.S. federal court for an order directing that a witness be examined or that evidence be disclosed for purposes of a foreign legal proceeding. The procedure is highly efficient; by taking advantage of section 1782, foreign litigants can often avoid and bypass the unwieldy and time-consuming requirements of letters rogatory or requests for evidence collection under the Hague Convention on the Collection of Evidence Abroad in Civil or Commercial Matters.

Foreign Private Arbitrations

The value of section 1782 has been conclusively demonstrated in connection with foreign court proceedings or similar judicial or quasi-judicial proceedings. As we reported in a 2013 article, however, there remains an important open question whether section 1782 may be used to collect evidence in the U.S. for foreign private arbitrations to which a governmental entity is not a party.

At the moment, the law remains unsettled, and the federal courts across the U.S. are still divided on the question whether section 1782 may be used to gather evidence in this country for use in foreign private arbitrations. In January 2014, the U.S. Court of Appeals for the Eleventh Circuit withdrew an earlier opinion, issued in 2012, which had held that foreign private arbitral bodies are "foreign tribunals" in connection with proceedings before which evidence may be collected in the U.S. pursuant to section 1782. Thus, the only currently binding appellate rulings on the issue are from the Courts of Appeals for the Fifth and Second Circuits, which do not recognize foreign private arbitral bodies as foreign tribunals for section 1782 purposes. Notwithstanding these appellate rulings, however, a number of federal district level courts have found to the contrary, and have allowed use of section 1782 to collect evidence for use in purely private foreign arbitrations.

The scope of the rulings of the various federal courts, whether at the district or appellate level, is in any event limited geographically to the areas under the particular courts' jurisdiction. Thus, when considering whether to seek evidence for use in a foreign private arbitration, one must look carefully at the controlling case law in the U.S. federal district where the evidence or witness is listed. Also, for reasons more fully discussed in our prior article, where an arbitration arises out of a contractual arbitration clause that prohibits judicial review, a section 1782 application may face an uphill battle no matter where in the U.S. the section 1782 application is made. The U.S. Supreme Court may ultimately step in to resolve the issue reflected in the conflicting case law referenced above, but until then great care must be taken, and counsel should be consulted, before deciding whether to launch an application seeking evidence for use in a foreign private arbitral proceeding.

Collecting Evidence from a Foreign Sovereign's Lawyers: The "Prestige" Litigation

Section 1782 was the subject of a July 2014 ruling by the Second Circuit Court of Appeals in a case arising out of the 2002 oil spill from the vessel Prestige off the coast of Spain. At issue were records in the possession of attorneys in New York, who had represented the Spanish government some years ago in New York proceedings relating to the oil spill. Litigants in later proceedings in Spain, including the captain of the Prestige, asserted that certain witness statements, which had been submitted in the prior New York proceedings and prepared with the assistance of the New York attorneys, contained falsehoods. Those litigants asserted that the true facts were helpful to them, and would help to exonerate them in the Spanish proceedings. Accordingly, they made an application under section 1782 to take the testimony of the New York attorneys and for disclosure of the attorneys' records relating to the preparation of the declarations.

The Court of Appeals held that the district court had not abused its discretion in denying the section 1782 request because, inter alia, the Spanish proceedings for which the evidence was sought were essentially at a close. The Court of Appeals also ruled, however, that the evidence might be relevant to future appellate proceedings in Spain, and therefore ordered the New York attorneys not to destroy the relevant records for a period of five years. In so doing, the court specifically overruled the objection that the section 1782 application was essentially one against a foreign sovereign (Spain), such that the documents would be protected under the Foreign Sovereign Immunities Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.