USA Trends and Developments Contributed by: Matthew Kirtland, Denton Nichols and Courtney Hikawa, Norton Rose Fulbright US LLP
their authority from the parties’ consent, they are not imbued with governmental authority, which means parties cannot use Section 1782 to collect evidence for use in proceedings before such panels. While ZF Automotive settled the question for pri - vate commercial disputes, it arguably left unresolved whether US discovery could be taken for use before tribunals constituted under ICSID rules. Because sovereign nations fund ICSID and sign the underlying ICSID Convention, some practitioners believed ICSID tribunals might qualify as the requisite “governmental authority” for purposes of Section 1782. The Second Circuit (which hears appeals from fed - eral first-instance courts in New York, Connecticut and Vermont) was the first court of appeals (and thus far the only one) to resolve this question. In Webuild S . p . A . v WSP USA Inc . (2024), it held that an ICSID tribunal lacks the necessary “governmental authority” required by ZF Automotive . It reasoned that the exist - ence of governmental involvement at the institutional level of ICSID, however substantial, does not mean that a given ad hoc ICSID tribunal is itself imbued with governmental authority ( Webuild S . P . A . v WSP USA Inc ., 108 F.4th 138, 144 (2d Cir. 2024)). This rul - ing effectively extended ZF Automotive ‘s prohibition on Section 1782 discovery to ICSID tribunals, at least for federal courts sitting within the Second Circuit’s territorial jurisdiction. In light of these case law developments, parties wish - ing to gather evidence from persons in the US for use in arbitrations outside the US may need to explore other options.
For example, Section 1782 still applies when the for - eign proceeding is before a national court. Many types of foreign court proceedings – such as efforts to freeze assets in contemplation of post-award enforcement, requests for interim court orders pending the arbitra - tion, or ancillary court proceedings to compel arbitra - tion or to challenge an arbitral award – may relate to an arbitration. In that event, parties may be able to use Section 1782 to obtain evidence for use in those court proceedings, and in turn that evidence may possibly be used in the related arbitration as well. Another option is to turn to US state law in place of federal law. For example, a New York law allows courts to order the production of evidence “to aid in arbitra - tion”, without any textual limitation on where the arbi - tration must take place (N.Y. C.P.L.R. § 3102 (c)). The bar for taking discovery under this law is high though – courts will grant such discovery requests only in “extraordinary circumstances”, not simply because it would be desirable or convenient ( AXA Equitable Life Ins . Co . v . Kalina , 101 A.D.3d 1655, 1656, 956 N.Y.S.2d 743, 744–45 (2012)). Still, in Zampolli v Range Developers (2019), a New York state court used this New York law to order the production of financial books, records and other documents so that a party could “present a proper case” in an arbitration seated in London ( Zampolli v Range Developers , 2019 WL 5394487 (N.Y. Sup. Ct. 22 October 2019)). The case shows that state law in some parts of the US may still provide an avenue, even though Section 1782 is largely no longer avail - able for foreign arbitrations as a matter of federal law.
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