In its decision dated 13 June 20225, the U.S.Supreme Court determined that Section1782 is not available in support of foreignprivate international commercial arbitrationsand at least some investor-state arbitrations.The ZF Automotive decision concerned two separate disputes,later consolidated:--The first dispute involved a private commercialarbitration between Luxshare Ltd., a Hong Kong-basedcompany and ZF Automotive U.S., Ing, a Michigan-basedmanufacturer and subsidiary of a German corporation.In support of its fraud allegations against ZF Automotivein a sales transaction, Luxshare sought evidence fromZF and its officers based in the U.S. relying on Section1782. The arbitration was seated in Berlin, governed byGerman law, administered and subject to the rules ofthe German Arbitration Institute: Deutsche Institutionfür Schiedsgerichtsbarkeit (“DIS”). The District Courtgranted the request and the U.S. Court of Appeals for theSixth Circuit denied ZF’s request for a stay.The second case involved an ad hoc investor-statearbitration, governed by the UNCITRAL Rules, broughtpursuant to the Russia-Latvian bilateral investmenttreaty between a Russian entity, the Fund for Protectionof Investors’ Rights in Foreign States, and the Republicof Lithuania. The arbitration related to the allegedexpropriation of AB bankas Snoras a Lithuanian bankwhose Russian investor assigned its rights to the Fund.The fund sought discovery from AlixPartners LLP, aNew York based consulting firm, and its CEO who wasappointed temporarily as Snoras’ administrator. TheDistrict Court granted the Fund’s discovery request andthe U.S. Court of Appeals for the 2nd Circuit affirmed thedecision.The U.S. Supreme Court has now clarified that a “foreigntribunal” is one that exercises “governmental authority”conferred by a single nation and an “international tribunal”is one that exercises governmental authority conferred bytwo or more nations. Therefore, an arbitral body may qualifyas such if the relevant foreign nation or nations authorisethe arbitration panel to exercise governmental authority –this is not likely in the context of international commercialarbitration. The Supreme Court therefore concluded thatnone of the arbitral panels qualified as such: (i) the firstdispute is a “creature of an agreement between private partieswho prescribe their own rules”6 so that no government isinvolved in creating the arbitral panel or prescribing itsprocedure, and (ii) Section 1782 did not apply to the seconddispute because “the [BIT] does not itself create the panel”but “instead it simply references the set of rules that governthe panel’s formation and procedure if the investor choosesthat forum.”7 It appears that access to Section 1782 ininternational commercial arbitration is now closed-off. Somemay celebrate this latest legal development.10WHAT NEXT?The U.S. Supreme Court has made clear that Section 1782does not apply to international commercial / constructionarbitration. This may now mean that arbitration agreementsin international construction contracts should be amendedby parties to expressly allow for broad / broader discovery.However, many of the limitations in respect of noncompliance will remain.Experts working in international commercial arbitrationsand who are based in the U.S. are likely to be happierfollowing the ZF Automotive opinion.With regards to investment arbitration, the ZF Automotiveopinion only concerned ad hoc investor-state disputes,governed by the UNCITRAL Rules. It therefore remainsunclear whether this ruling applies to investor-statedisputes conducted under the International Centre forSettlement of Investment Disputes (“ICSID”) Conventionsince an ICSID arbitral tribunal could meet the descriptionof an intergovernmental adjudicative body that exercisesgovernmental authority, for the following reasons:“ICSID was created by Member States through a treatyunder public international law as a permanent institutionthat serves a public purpose common to the Statesparticipating in it.ICSID is governed by a body composed of representativesof the States participating in the ICSID Convention. It isadministered by a Secretary-General, who is elected bythat intergovernmental body.ICSID is a publicly funded international institution.ICSID is an organization under public international lawwith legal personality. It enjoys the typical privileges andimmunities of an international organization under publicinternational law.The participating States, through designations of personsto the Panel of Arbitrators and through the appointmentof arbitrators in particular cases, enjoy a strong influenceon the composition of ICSID arbitral tribunals andannulment committees.The institution of ICSID arbitration proceedings is subjectto a screening process by the Secretary-General, an officerelected by a body composed of State representatives.The jurisdiction of an arbitration tribunal under theICSID Convention is subject to two separate expressionsof consent by the State party to the dispute. The firstexpression of consent is made through the ratificationof the ICSID Convention, and the second expressionof consent is made most frequently through a treaty orthrough national legislation. The focus on investmentdisputes between the host State and the foreign investormeans that the origin of the dispute lies most often in
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