Republic of Kazakhstan v. Biedermann International

Revised March 19, 1999

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 98-21072
Summary Calendar

APPLICATION OF THE REPUBLIC OF KAZAKHSTAN,

Petitioner-Appellee,

v.

BIEDERMANN INTERNATIONAL,

Claimant-Appellant,

Appeal from the United States District Court for the
Southern District of Texas

March 17, 1999

Before HIGGINBOTHAM, JONES, and BARKSDALE, Circuit Judges:

EDITH H. JONES, Circuit Judge:

In support of a proceeding before the Arbitration

Institute of the Stockholm Chamber of Commerce, the Republic of

Kazakhstan (“Kazakhstan”) instituted the underlying action in the

Southern District of Texas for assistance in discovery pursuant to

28 U.S.C. § 1782. Kazakhstan requested that the district court

order Murdock Baker, Jr., not a party to the arbitration, to submit

to a deposition and produce certain documents related to

Kazakhstan’s opponent Biedermann International (“Biedermann”). The

district court ordered the requested discovery and denied
Biedermann’s request for reconsideration and motion for emergency

stay. On expedited appeal of the district court’s final order,1

this court stayed the discovery. Having reviewed the parties’

submissions and examined the language and history of § 1782, we

elect to follow the Second Circuit’s recent decision that § 1782

does not apply to private international arbitrations. See National

Broad. Co. v. Bear Stearns & Co., ___ F.3d ___, No. 98–7469, 1999

WL 27053. (2d Cir. Jan. 26, 1999).

Review of the scope of § 1782 is de novo. See Pritchard

v. U.S. Trustee (In re England), 153 F.3d 232, 234 (5th Cir. 1998).

When interpreting a statute, this court examines the plain, common

sense meaning of the statute’s language. See id. at 235 (“Courts

properly assume, absent sufficient indication to the contrary, that

Congress intends the words in its enactments to carry their

ordinary, contemporary, common meaning.”) (internal punctuation and

citations omitted). If this language is unambiguous, the inquiry

is ended. See United States v. Investment Enters., Inc., 10 F.3d

263, 274 (5th Cir. 1994) (“Except in rare circumstances, judicial

inquiry is complete when the terms of a statute are unambiguous.”).

As the Second Circuit observed, however, the meaning of “foreign or

international tribunal” is ambiguous and must be construed in light

of the background and purpose of the statute.

1
See 28 U.S.C. § 1291; Okubo v. Reynolds (In re Letters
Rogatory from the Tokyo Dist. Prosecutor’s Office), 16 F.3d 1016,
1018 n.1 (9th Cir. 1994).

2
 From its adoption in 1855 through its amendment in 1964,

§ 1782 permitted a district court to provide discovery assistance

only to a party involved in judicial proceedings pending before a

“court in a foreign country.”2 In 1964, Congress amended the

statute. Section 1782 now reads, in pertinent part:

The district court of the district in which a
person resides or is found may order him to
give his testimony or statement or to produce
a document or other thing for use in a
proceeding in a foreign or international
tribunal. The order may be made . . . upon
the application of any interested person . . .
.

28 U.S.C. § 1782 (emphasis added). The decision to substitute the

term “tribunal” for “court” was deliberate, evidencing Congress’s

intention to expand the discovery provision beyond “conventional

courts” to include “foreign administrative and quasi-judicial

agenc[ies].” See S. Rep. No. 1580, § 9 (1963), reprinted in 1964

U.S.C.C.A.N. 3782, 3788.

But the new version of § 1782 was drafted to meld its

predecessor with other statutes which facilitated discovery for

2
Act of May 24, 1949, ch. 139, § 93, 63 Stat. 89, 103 (1949);
see also Act of June 25, 1948, ch. 646, § 1782, 62 Stat. 869, 949
(1948) (“any civil action pending in any court in a foreign
country”); Act of March 3, 1863, ch. 95, § 1, 12 Stat. 769, 769
(1863) (“in any suit for the recovery of money or property . . . in
any foreign court . . . in which a government of such foreign
country shall be a party”); Act of March 2, 1855, ch. 140, § 2, 10
Stat. 630, 630 (1855) (“from any court of a foreign country”). For
an extensive discussion of § 1782’s legislative history, see
National Broad. Co., 1999 WL 27053, at *4-6, and In re:
Application of Nat’l Broad. Co., No. M-77 (RWS), 1998 WL 19994, at
*4-7 (S.D.N.Y. Jan. 21, 1998).

3
international government-sanctioned tribunals. See, e.g., National

Broad. Co., 1999 WL 27053, at *5-*6 (discussing combination of

§ 1782 with 22 U.S.C. §§ 270-270g). Neither the report of the

Commission that recommended what became the 1964 version of § 17823

nor contemporaneous reports of the Commission’s director4 ever

specifically goes beyond these types of proceedings to discuss

private commercial arbitrations. There is no contemporaneous

evidence that Congress contemplated extending § 1782 to the then-

novel arena of international commercial arbitration.5 References

3
Section 1782’s amendment in 1964 arose from recommendations
of the Commission and Advisory Committee on International Rules of
Judicial Procedure. See Act of Sept. 2, 1958, Pub. L. No. 85-906,
72 Stat. 1743, 1743-45 (1958); see also National Broad. Co., 1999
WL 27053, at *4.
4
Professor Hans Smit directed the Commission’s work.
Following Congress’s 1964 amendment of § 1782, Smit noted the
expansion of the statute to include, inter alia, “international
arbitral tribunals.” See Hans Smit, International Litigation Under
the United States Code, 65 Colum. L. Rev. 1015, 1027 n.73 (1965);
see also id. at 1026 n.71 (“‘tribunal’ embraces all bodies
exercising adjudicatory powers, and includes . . . administrative
and arbitral tribunals”). See, also Hans Smit and Arthur R.
Miller, International Co-Operation in Civil Litigation -- A Report
on the Practices and Procedures Prevailing in the United States
(1961).
5
Subsequent articles by Professor Smit, however, champion the
majority view of commentators that private commercial arbitrations
are within § 1782. See, e.g., Hans Smit, American Assistance to
Litigation in Foreign and International Tribunals: Section 1782 of
Title 28 of the U.S.C. Revisited, 25 Syracuse J. Int’l L. & Com. 1,
5-8 (1998) (discussing application of § 1782 to private
arbitrations and criticizing In re Application of Medway Power
Ltd., 985 F. Supp. 402 (S.D.N.Y. 1997), and In re: Nat’l Broad.
Co.); Jonathan Clark Green, Are International Institutions Doing
Their Job?, 90 Am. Soc’y Int’l L. Proc. 62, 70-71 (1996) (“it is
hard to think of an international tribunal other than a court or an
arbitration panel”); Walter B. Stahr, Discovery Under 28 U.S.C. §

4
in the United States Code to “arbitral tribunals” almost uniformly

concern an adjunct of a foreign government or international

agency.6

Moreover, the term “tribunal” lacks precision and demands

judicial interpretation consistent with the statute’s purpose.

“Tribunal” has been held not to include even certain types of fact-

finding proceedings, like those enforcing tax assessment and

currency exchange regulations, conducted under the auspices of

foreign governments. See, e.g., Fonseca v. Blumenthal, 620 F.2d

322, 323 (2d Cir. 1980) (Superintendent of Exchange Control of

Colombia); In re Letters Rogatory Issued by Dir. of Inspection of

Gov’t of India, 385 F.2d 1017, 1020-22 (2d Cir. 1967) (Indian

income tax officer) (Friendly, J.); see also Okubo, 16 F.3d at

1018-19 (Tokyo District Prosecutor’s Office not “tribunal”). To

the extent that these cases distinguished between an impartial

adjudicative proceeding, the type covered by § 1782, and the

inquiry of an officer with “an institutional interest in a

1782 for Foreign and International Proceedings, 30 Va. J. Int’l L.
597, 619-20 (1990) (“It is clear . . . that the term ‘international
tribunal’ includes an international court, arbitration or other
tribunal located in a foreign country.”); Peter F. Schlosser,
Coordinated Transnational Interaction in Civil Litigation and
Arbitration, 12 Mich. J. Int’l L. 150, 170 n.84 (1990) (scope of
“tribunal” should include international arbitrations).
6
See, e.g., 16 U.S.C. § 973n (“In the event of a dispute
requiring the establishment of an arbitral tribunal . . . .”); 22
U.S.C. § 290k-11(a) (“An award of an arbitral tribunal resolving a
dispute . . . .”); 22 U.S.C. § 1650a (“An award of an arbitral
tribunal rendered pursuant to chapter IV . . . .”).

5
particular result",7 one might infer that private international

arbitrations ought to be covered. The opinions, however, also

demonstrate inherent limits on the nature of a “tribunal”; thus,

not every conceivable fact-finding or adjudicative body is covered,

even when the body operates under the imprimatur of a foreign

government.

Skepticism about extending § 1782 to private

international arbitrations also results from a comparison with

domestic United States arbitration procedure. As other courts have

noted,8 domestically constituted arbitration panels, but not any

“interested party,” can invoke federal court jurisdiction to compel

discovery in limited circumstances. Further, federal courts have

a duty to enforce arbitrators’ summonses only within the federal

district in which the arbitrators, or a majority of them, are

sitting. See 9 U.S.C. § 7. It is not likely that Congress would

have chosen to authorize federal courts to assure broader discovery

in aid of foreign private arbitration than is afforded its domestic

dispute-resolution counterpart. There is also a possibility that

Federal Arbitration Act § 7 and 28 U.S.C. § 1782 conflict, if the

latter section encompasses foreign and international private

7
Fonseca, 620 F.2d at 324 (quoting In re Letters Rogatory, 385
F.2d at 1020).
8
See, e.g., National Broad. Co., 1999 WL 27053, at *2-*3 (“The
methods for obtaining evidence under [9 U.S.C.] § 7 are more
limited than those under [28 U.S.C.] § 1782 in two, and possibly
three, ways.”); Medway Power Ltd., 985 F. Supp. at 404-05.

6
arbitrations. Section 7 is a “residual” provision, to the extent

not inconsistent with the Convention on the Recognition and

Enforcement of Foreign Arbitral Awards, 9 U.S.C. § 201, 208, and

the Inter-American Convention on International Commercial

Arbitration, 9 U.S.C. §§ 301, 307. The Second Circuit aptly noted

that the differences in available discovery could “create an

entirely new category of disputes concerning the appointment of

arbitrators and the characterization of arbitration disputes as

domestic, foreign, or international.” See National Broad. Co.,

1999 WL 27053, at *5.

Empowering arbitrators or, worse, the parties, in private

international disputes to seek ancillary discovery through the

federal courts does not benefit the arbitration process.

Arbitration is intended as a speedy, economical, and effective

means of dispute resolution. The course of the litigation before

us suggests that arbitration’s principal advantages may be

destroyed if the parties succumb to fighting over burdensome

discovery requests far from the place of arbitration. Moreover, as

a creature of contract, both the substance and procedure for

arbitration can be agreed upon in advance. The parties may pre-

arrange discovery mechanisms directly or by selecting an

established forum or body of governing principles in which the

conventions of discovery are settled.9 Resort to § 1782 in the

9
See U.N. Commission on International Trade Law, Model Law on
International Commercial Arbitration, art. 19 (1994). Article 19

7
teeth of such agreements suggests a party’s attempt to manipulate

United States court processes for tactical advantage.10 Section

1782 need not be construed to demand a result that thwarts private

international arbitration’s greatest benefits.

For the foregoing reasons, we conclude that the term

“foreign and international tribunals” in § 1782 was not intended to

authorize resort to United States federal courts to assist

discovery in private international arbitrations. The provision was

enlarged to further comity among nations, not to complicate and

undermine the salutary device of private international arbitration.

REVERSED.

provides the parties with wide discretion to develop the procedures
to be employed in an arbitral proceeding:

Subject to the provisions of this Law, the parties are free to
agree on the procedure to be followed by the arbitral tribunal
in conducting the proceedings. * * * Failing such agreement,
the arbitral tribunal may, subject to the provisions of this
Law, conduct the arbitration in such manner as it considers
appropriate. The power conferred upon the arbitral tribunal
includes the power to determine the admissibility, relevance,
materiality and weight of any evidence.

See id.; see also American Arbitration Ass’n, Commercial
Arbitration R. § 31 (1996) (“The parties may offer such evidence as
is relevant and material to the dispute and shall produce such
evidence as the arbitrator may deem necessary to an understanding
and determination of the dispute. An arbitrator or other person
authorized by law to subpoena witnesses or documents may do so upon
the request of any party or independently.”).
10
See National Broad. Co., 1999 WL 27053, at *6 (“If the
parties to a private international arbitration make no provision
for some degree of consensual discovery inter se in their agreement
to arbitrate, the arbitrators control discovery, and neither party
is deprived of its bargained-for efficient process by the other
party’s tactical use of discovery devices”).

8