The Application of the Fund v. AlixPartners

20-2653-cv
The Application of the Fund v. AlixPartners

In the
United States Court of Appeals
for the Second Circuit

AUGUST TERM 2020

No. 20-2653-cv

THE APPLICATION OF THE FUND FOR PROTECTION OF INVESTOR RIGHTS
IN FOREIGN STATES PURSUANT TO 28 U.S.C. § 1782 FOR AN ORDER
GRANTING LEAVE TO OBTAIN DISCOVERY FOR USE IN A FOREIGN
PROCEEDING,
Plaintiff-Appellee,

v.

ALIXPARTNERS, LLP, SIMON FREAKLEY,
Third-Party Defendants-Appellants.

On Appeal from the United States District Court
for the Southern District of New York

ARGUED: APRIL 15, 2021
DECIDED: JULY 15, 2021

Before: CABRANES, POOLER, and BIANCO, Circuit Judges.
 Third-Party Defendants-Appellants AlixPartners, LLP and

Simon Freakley (together, “AlixPartners”) appeal from the July 8, 2020

Order of the United States District Court for the Southern District of

New York (Analisa Torres, Judge) granting an application for

discovery assistance pursuant to 28 U.S.C. § 1782 and the August 25,

2020 Order denying reconsideration of the same. Under § 1782(a), a

district court may grant an application for discovery assistance

submitted by an “interested person” for use “in a proceeding in a

foreign or international tribunal.” Plaintiff-Appellee The Fund for

Protection of Investor Rights in Foreign States (the “Fund”), a Russian

corporation, sought assistance from the District Court to order

discovery from AlixPartners for use in an arbitration proceeding

brought by the Fund against Lithuania before an arbitral panel

established pursuant to a bilateral investment treaty between

Lithuania and Russia.

2
 This case presents three main issues on appeal: (1) whether an

arbitration between a foreign State and an investor, which takes place

before an arbitral panel established pursuant to a bilateral investment

treaty to which the foreign State is a party, constitutes a “proceeding

in a foreign or international tribunal” under 28 U.S.C. § 1782; (2)

whether the Fund is an “interested person” who may seek discovery

assistance for such an arbitration under § 1782; and (3) whether the

District Court erred in finding that the so-called Intel factors weigh in

favor of granting the Fund’s discovery application under § 1782. As to

the first question presented, because the arbitration is between an

investor and a foreign State party to a bilateral investment treaty,

taking place before an arbitral panel established by that treaty, we hold

that this arbitration is a “proceeding in a foreign or international

tribunal.” Second, because the Fund is a party to the arbitration for

which it seeks discovery assistance, it is an “interested person” under

§ 1782. Third, we find no abuse of discretion in the District Court’s

3
determination that the Intel factors weigh in favor of granting the

Fund’s discovery application. Accordingly, we AFFIRM the July 8,

2020 Order and the August 25, 2020 Order of the District Court.

JOSEPH T. BAIO, Willkie Farr & Gallagher
LLP, New York, NY, for Third-Party
Defendants-Appellants.

ALEXANDER A. YANOS (Carlos Ramos-
Mrosovsky, Rajat Rana, Robert Poole, on the
brief), Alston & Bird LLP, New York, NY, for
Plaintiff-Appellee.

JOSÉ A. CABRANES, Circuit Judge:

We consider here three questions concerning discovery in U.S.

courts to assist in an arbitration between an investor and a foreign

State that takes place before an arbitral panel established by a bilateral

investment treaty to which that foreign State is a party.

4
 Appellants AlixPartners, LLP and Simon Freakley (together,

“AlixPartners”) appeal from the July 8, 2020 Order of the United States

District Court for the Southern District of New York (Analisa Torres,

Judge) granting an application for discovery assistance pursuant to 28

U.S.C. § 1782, along with the District Court’s August 25, 2020 Order

denying reconsideration of the same. 1 Under § 1782(a), a district court

may grant an application for discovery assistance submitted by an

“interested person” for use “in a proceeding in a foreign or

international tribunal.” Appellee The Fund for Protection of Investor

Rights in Foreign States (the “Fund”), a Russian corporation, sought

assistance from the District Court to order discovery from Freakley

and AlixPartners, LLP, a limited liability partnership with its principal

place of business in New York, for use in an arbitration proceeding

1In re Fund for Protection of Inv. Rights in Foreign States, No. 19 Misc. 401 (AT),
2020 WL 3833457 (S.D.N.Y. July 8, 2020). AlixPartners also appeals from the August
25, 2020 order denying reconsideration. In re Fund for Protection of Inv. Rights in
Foreign States, No. 19 Misc. 401 (AT), 2020 WL 5026586 (S.D.N.Y. Aug. 25, 2020).

5
brought by the Fund against the Republic of Lithuania (“Lithuania”) 2;

that proceeding was before an arbitral panel established by a bilateral

investment treaty between Lithuania and the Russian Federation

(“Russia”).

This case presents three primary issues on appeal: (1) whether

an arbitration between a foreign State and an investor, which takes

place before an arbitral panel established pursuant to a bilateral

investment treaty to which that foreign State is a party, constitutes a

“proceeding in a foreign or international tribunal” under § 1782; (2)

whether the Fund qualifies as an “interested person” who may seek

discovery assistance under § 1782; and (3) whether the District Court

erred in finding that the so-called Intel factors 3 weigh in favor of

granting the Fund’s discovery application.

2 Ex Parte Application of The Fund at 1, In re the Application of the Fund for
Protection of Investor Rights in Foreign States, No. 1:19-mc-00401-AT (S.D.N.Y. Aug.
29, 2019), ECF No. 1.
3 See Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004) (Intel).

6
 As to the first question presented, because the arbitration is

between an investor and foreign State party to a bilateral investment

treaty, and because the arbitration takes place before an arbitral panel

established by that same treaty, we hold that this arbitration is a

“proceeding in a foreign or international tribunal.” Second, because

the Fund is a party to the arbitration for which it is seeking discovery

assistance, it qualifies as an “interested person” under § 1782. Third,

we find no abuse of discretion in the District Court’s determination

that the relevant factors announced by the Supreme Court in Intel

weigh in favor of granting the Fund’s discovery application.

Accordingly, we AFFIRM the July 8, 2020 Order and the August 25,

2020 Order of the District Court.

BACKGROUND

In 2011, Lithuania’s regulatory authorities conducted an

investigation of a private bank located in Lithuania, AB bankas

SNORAS (“Snoras”). After finding that Snoras was unable to meet its

7
obligations, the Bank of Lithuania, the central bank, nationalized

Snoras and appointed Simon Freakley as its temporary administrator.

As administrator, Freakley reported to the Bank of Lithuania that

Snoras’s liabilities exceeded its assets and shortly thereafter, the

authorities commenced bankruptcy proceedings, which resulted in a

Lithuanian court declaring Snoras to be bankrupt.

The Fund, a Russian corporation, is the assignee of Vladimir

Antonov, a Russian national who sought to recover compensation for

Lithuania’s expropriation of his controlling share in Snoras by

commencing an arbitration proceeding against Lithuania in April

2019. The Fund commenced this particular arbitration pursuant to a

bilateral investment treaty to which Lithuania and Russia are parties,

titled the Agreement Between the Government of the Russian

Federation and the Government of the Republic of Lithuania on the

Promotion and Reciprocal Protection of the Investments (the

“Treaty”). This Treaty is, according to its terms, an agreement entered

8
for the purpose of establishing favorable conditions made by investors

of one foreign State in the territory of the other, “recognising that the

promotion and reciprocal protection of investments, based on the

present Agreement, will be conducive to the development of mutually

beneficial trade and economic, scientific and technical co-operation.” 4

There are several provisions in the Treaty that are relevant to

this appeal. Article 6 of the Treaty provides that investments of one

foreign State’s nationals made in the territory of the other State “shall

not be subject to expropriation, nationalisation or other measures

equivalent to expropriation or nationalisation.” 5

Article 10 addresses the procedures by which disputes between

one foreign State and an investor of the other State are resolved. In the

4 Joint App’x 70.
5 Id. at 72.

9
event that a dispute cannot be settled within six months, either party

may elect to submit the dispute to one of four venues:

a) competent court or court of arbitration of the
Contracting Party in which territory the
investments are made;

b) the Arbitration Institute of the Stockholm
Chamber of Commerce;

c) the Court of Arbitration of the International
Chamber of Commerce; [or]

d) an ad hoc arbitration in accordance with
Arbitration Rules of the United Nations
Commission on International Trade Law
(UNCITRAL). 6

The Treaty also provides that “[t]he arbitral decision shall be final and

binding on both parties [to] the dispute.” 7

When the Fund initiated an arbitration pursuant to the Treaty,

it elected to resolve the dispute through “an ad hoc arbitration in

6 Id. at 74.
7 Id.

10
accordance with Arbitration Rules of [UNCITRAL.]” 8 In August 2019,

the Fund filed an application pursuant to 28 U.S.C. § 1782 9 in the

United States District Court for the Southern District of New York for

8 Id. at 29.
9 The relevant language of § 1782 is as follows:

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 pursuant to a letter rogatory
issued, or request made . . . upon the application of any
interested person and may direct that the testimony or
statement be given, or the document or other thing be
produced, before a person appointed by the court. . . . The
order may prescribe the practice and procedure, which
may be in whole or part the practice and procedure of the
foreign country or the international tribunal, for taking the
testimony or statement or producing the document or
other thing. . . . A person may not be compelled to give his
testimony or statement or to produce a document or other
thing in violation of any legally applicable privilege.

28 U.S.C. § 1782(a).

11
an order granting the Fund leave to obtain discovery for use in its

arbitration with Lithuania. 10

In its application the Fund sought discovery from Freakley and

AlixPartners, LLP 11 related to the expropriation of Snoras based on

Freakley’s role as the bank’s temporary administrator, including

information about: the circumstances of Freakley’s appointment as

Snoras’s temporary administrator; any instructions Freakley received

from the Lithuanian government; the nature, scope, and findings of

Freakley’s investigation at Snoras; the “reception” by Lithuanian

officials of those findings; any reports prepared by Freakley for the

Bank of Lithuania; and a deposition of Freakley and a representative

of AlixPartners, LLP about these events. AlixPartners filed a response

10 The Fund filed this § 1782 application in the Southern District of New York
because it is the “district court of the district in which [AlixPartners and Freakley]
reside[ ] or [are] found.” 28 U.S.C. § 1782(a).
11Freakley is currently the Chief Executive Officer of AlixPartners, LLP. At
the time the Bank of Lithuania appointed Freakley as temporary administrator of
Snoras, Freakley worked for a different entity whose assets were later acquired by
AlixPartners, LLP. Appellants Br. 6.

12
in the District Court in opposition to the Fund’s § 1782 application in

October 2019.

In November 2019, Lithuania submitted a letter to the arbitral

panel constituted pursuant to the Treaty to arbitrate the dispute

between the Fund and Lithuania, in which Lithuania asked the panel

“to order the [Fund] to withdraw the [§] 1782 Application” and which

the Fund opposed. 12 The arbitral panel issued an order the next month,

analyzing the parties’ positions and ultimately rejecting Lithuania’s

request to order the Fund to withdraw its § 1782 application. In its

decision, the panel observed that Lithuania did not show that the §

1782 application “would in itself be prejudicial to its rights in this

arbitration” and noted that Lithuania would “be able to contest any

evidence that might be obtained pursuant to the [Fund’s §] 1782

Application, if granted,” including objections as to admissibility of

12 Joint App’x 216.

13
materials under Lithuanian law. 13 The arbitral panel declined to decide

such possible admissibility issues in its order, finding that “[i]t would

be premature to do so.” 14

Back in the United States, on July 8, 2020 the District Court

granted the Fund’s § 1782 application and authorized the Fund to issue

subpoenas to AlixPartners for the requested documents. 15

That same day, we held in Guo that § 1782 discovery assistance

does not extend to private commercial arbitrations, 16 a decision that

reaffirmed our prior holding in NBC. 17 In Guo, we also offered further

guidance on the factors to be considered by a court in deciding

13 Id. at 219–20.
14 Id. at 220.
15 In re Fund for Protection of Inv. Rights in Foreign States, 2020 WL 3833457.
16 See In re Guo (Guo), 965 F.3d 96 (2d Cir. 2020).
17 Id. at 104-05; see Nat’l Broad. Co. v. Bear Stearns & Co. (NBC), 165 F.3d 184
(2d Cir. 1999).

14
whether an arbitration is taking place in a “foreign or international

tribunal” under § 1782. 18

AlixPartners timely moved for reconsideration of the District

Court’s July 8 Order, asserting that the decision could not stand in light

of Guo’s holding that an arbitral tribunal’s status turns not on its

origins in governmental action, but instead on whether the tribunal

possesses the functional attributes most commonly associated with

private arbitration.

On August 25, 2020, the District Court denied the motion for

reconsideration, interpreting Guo as “suggest[ing] that arbitrations

conducted pursuant to a bilateral investment treaty like the [Treaty

here] do qualify as ‘[proceedings in a] foreign or international

tribunal’ under § 1782.” 19 The District Court also explained that it had,

18 See Guo, 965 F.3d at 107.
19In re Fund for Protection of Inv. Rights in Foreign States, 2020 WL 5026586, at
*2 (quoting § 1782).

15
consistent with Guo, reached its prior decision by looking to several

functional attributes possessed by the arbitral panel that were not

commonly associated with private arbitration, including:

the role of bilateral investment arbitration as a tool
of international relations, the fact that the Tribunal
derives its jurisdiction from the [Treaty], and the
fact that the Arbitration is a means by which [the
Fund is] bringing claims against the Republic of
Lithuania in its capacity as a state. 20

Thus, according to the District Court, its July 8 Order was not

disturbed by this Court’s decision in Guo. This timely appeal followed.

DISCUSSION

Under 28 U.S.C. § 1782(a), a district court may compel the

production of materials “for use in a proceeding in a foreign or

international tribunal” upon “the application of any interested

20 Id.

16
person.” There are several statutory requirements that must be

satisfied for § 1782 discovery assistance to be granted:

(1) the person from whom discovery is sought
resides (or is found) in the district of the district
court to which the application is made, (2) the
discovery is for use in a foreign proceeding before
a foreign [or international] tribunal, and (3) the
application is made by a foreign or international
tribunal or any interested person. 21

The issues on appeal are: (1) whether an arbitration between an

investor and a foreign State, which takes place before an arbitral panel

established by a bilateral investment treaty to which that foreign State

is a party, constitutes a “proceeding in a foreign or international

tribunal” under § 1782; (2) whether the Fund qualifies as an

“interested person” who may seek discovery assistance for such an

arbitration under § 1782; and (3) whether the District Court “abused

21 Brandi–Dohrn v. IKB Deutsche Industriebank AG, 673 F.3d 76, 80 (2d Cir.
2012); see also Guo, 965 F.3d at 102 n.3 (“[T]he statute also imposes other
requirements, including that the discovery not be ‘in violation of any legally
applicable privilege.’” (quoting 28 U.S.C. § 1782(a))). AlixPartners does not contest
that the first § 1782 requirement, that it can be “found” in the Southern District of
New York, is satisfied.

17
its discretion” 22 in granting discovery to the Fund after weighing the

so-called Intel factors.

We review de novo the District Court’s conclusions that this

arbitration is a proceeding before an arbitral panel that qualifies as a

“foreign or international tribunal” and the Fund is an “interested

person.” 23 We review the District Court’s application of the so-called

Intel factors and its decision to order discovery for abuse of

discretion. 24

22 See In re The City of New York, 607 F.3d 923, 943 n.21 (2d Cir. 2010)
(explaining that “[t]he word ‘abuse’ in the ‘abuse of discretion’ standard is an
unfortunate—and inaccurate—term of art. When a district court abuses its
discretion, it involves nothing as heinous as abuse. Indeed, a so-called abuse of
discretion often involves something quite common and unavoidable in a system of
adjudication: a ‘view of the law’ that is simply ‘erroneous.’” (quoting Sims v. Blot,
534 F.3d 117, 132 (2d Cir. 2008)).
23 Guo, 965 F.3d at 102.
24 See Lancaster Factoring Co. v. Mangone, 90 F.3d 38, 42 (2d Cir. 1996).

18
 I.

Pursuant to the Treaty between Lithuania and Russia, the Fund

initiated an arbitration against Lithuania to challenge the

expropriation of certain shares of the bank Snoras. In opposition to the

Fund’s application for discovery assistance, AlixPartners asserts that

the arbitration between the Fund and Lithuania is a private

commercial arbitration, rather than a “proceeding in a foreign or

international tribunal” within the meaning of § 1782.

The seminal Supreme Court case in this area, Intel, approached

the “foreign or international tribunal” statutory requirement of § 1782

cautiously and flexibly. The Court held that discovery assistance

would be used “in a proceeding in a foreign or international tribunal”

where a foreign government entity—there, the Directorate General-

Competition of the Commission of the European Communities, whose

determinations were appealable to the European Court of Justice—

exercised “quasi-judicial” powers and acted as a “first-instance

19
decisionmaker.” 25 The Intel Court also noted that a proceeding abroad

may be eligible for § 1782 discovery assistance even when it has no

analogous forum in the United States. This was so because, “[i]n light

of the variety of foreign proceedings resistant to ready classification in

domestic terms, Congress left unbounded by categorical rules the

determination whether a matter is proceeding ‘in a foreign or

international tribunal.’” 26 Thus, the Intel Court resisted setting firm

limits on the arbitral bodies that could qualify for § 1782 discovery

assistance as “foreign or international tribunal[s].” Instead, the Court

offered the Intel factors, discussed below, as “guides for the exercise of

district-court discretion.” 27

25
Intel, 542 U.S. at 252, 257–58. The term “court of first instance” is often
referred to as a “trial court,” defined as “[a] court of original jurisdiction where
evidence is first received and considered”; “[a]lso termed court of first instance[.]”
Trial court, BLACK’S LAW DICTIONARY (11th ed. 2019).
26 Intel, 542 U.S. at 263 n.15 (quoting 28 U.S.C. § 1782(a)).
27 Id.

20
 Our own precedents have likewise made it clear that this

statutory requirement of § 1782 is broad, but not boundless. In NBC,

we held that “when Congress in 1964 enacted the modern version of

§ 1782, it intended to cover governmental or intergovernmental

arbitral tribunals and conventional courts and other state-sponsored

adjudicatory bodies.” 28 That said, we also held “international arbitral

panels created exclusively by private parties” or “arbitral bod[ies]

established by private parties” were not “foreign or international

tribunals” for the purposes of § 1782. 29

In our recent decision in Guo, we re-affirmed NBC’s holding and

elaborated on the framework by which a court should determine

whether a “foreign or international tribunal” exists for purposes of

§ 1782. In that case, we determined that, although the administrative

entity at issue—the China International Economic and Trade

28 NBC, 165 F.3d at 190.
29 Id. at 190–91.

21
Arbitration Commission (“CIETAC”)—“was originally created

through state action,” the entity had “subsequently evolved such that

it arguably no longer qualifie[d] as a ‘governmental or

intergovernmental arbitral tribunal[,] . . . conventional court[, or] . . .

other state-sponsored adjudicatory body.” 30 Accordingly, we specified

factors to be considered by courts when conducting the “foreign or

international tribunal” inquiry, emphasizing that this inquiry “does

not turn on the governmental or nongovernmental origins of the

administrative entity in question.” 31 Instead, we adopted a “functional

approach” that “consider[s] a range of factors” to answer a key

question: “whether the body in question possesses the functional

attributes most commonly associated with private arbitration.” 32

30 Guo, 965 F.3d at 107 (quoting NBC, 165 F.3d at 190).
31 Id. (emphasis in original).
32 Id. As we discuss in more detail below, in Guo we noted certain
distinctions between the body at issue in Guo—CIETAC—and an arbitral panel of
the kind we consider in this case. Indeed, we noted that “arbitration under bilateral
investment treaties is typically between a private party and a state” whereas “the

22
 In this case, the parties dispute whether this arbitral panel is a

private commercial arbitration. Because Guo clarified that the “foreign

or international tribunal” inquiry does not turn on the governmental

origins of the entity in question, we analyze this question under the

“functional approach” and factors we laid out in Guo, 33 including:

(1) the “degree of state affiliation and functional independence

possessed by the entity”;

dispute [there was] between two private parties.” Id. at 108 n.7. We also noted that
“[w]hile an arbitral body under a bilateral investment treaty may be a ‘foreign or
international tribunal,’ the arbitration [before CIETAC] derive[d] adjudicatory
authority solely from the parties’ agreement, rather than the intervention or license
of any government to adjudicate cases arising from certain varieties of foreign
investment.” Id.
33 The Fund argues that we should not consider the Guo factors in this case
because Guo concerned a tribunal “founded on a private contractual agreement,”
as opposed to an arbitration involving a foreign State before an arbitral panel
established pursuant to a bilateral investment treaty to which that State is a party.
Appellee Br. 20. We disagree. In Guo, we stated that “[a] closer inquiry is required
where . . . the arbitral body was originally created through state action, yet
subsequently evolved such that it arguably no longer qualifies as a [foreign or
international tribunal].” Guo, 965 F.3d at 107. We likewise think that a closer inquiry
is required where the arbitral body arguably possesses attributes of both private
and governmental arbitration. Our holding in Guo that the inquiry “does not turn
on the governmental or nongovernmental origins of the administrative entity in
question,” id., reinforces our decision to undertake that inquiry here.

23
 (2) the “degree to which a state possesses the authority to

intervene to alter the outcome of an arbitration after the

panel has rendered a decision”;

(3) the “nature of the jurisdiction possessed by the panel”;

and

(4) the “ability of the parties to select their own

arbitrators.” 34

We consider each of these factors in turn.

1. State Affiliation and Functional Independence.

In looking at the “extent to which the arbitral body is internally

directed and governed by a foreign state or intergovernmental

body,” 35 we recall that we found that the arbitral body in Guo,

34 Guo, 965 F.3d at 107–08.
35Id. at 107. We consider also any additional “functional attributes” that may
suggest that the arbitral tribunal is a “private arbitral body rather than a ‘foreign or
international tribunal.’” Id. at 107-08.

24
CIETAC, “function[ed] essentially independently of the Chinese

government in the ‘administration of its arbitration cases’”; the

administrative entity “maintain[ed] confidentiality from all non-

participants during and after arbitration, limiting opportunities for ex

parte intervention by state officials”; and that CIETAC offered a pool

of arbitrators with no affiliation with the Chinese government. 36 We

thus held that CIETAC had a “high degree of independence and

autonomy, and, conversely, a low degree of state affiliation.” 37

Here, the arbitral panel also functions independently from the

governments of Lithuania and Russia. The members of the arbitral

panel (two arbitration lawyers and a law professor) have no official

affiliation with Lithuania, Russia, or any other governmental or

intergovernmental entity and the panel receives zero government

funding. Further, as was the case with proceedings before CIETAC,

36 Id. at 107.
37 Id.

25
the proceedings here maintain confidentiality from non-participants;

the Treaty provides that “[t]he award may be made public only with

the consent of both parties.” 38

Nevertheless, we agree with the Fund that this functional

independence of the arbitral panel must be viewed within the context

of the Treaty. It is true that this arbitral panel is not internally “directed

and governed by a foreign state.” 39 But the panel is convened and

proceeds in an arbitration format expressly contemplated by the

Treaty entered into by Lithuania and Russia in order to create a

specific proceeding to resolve investment-related disputes between

one foreign State and investors of the other State. And the rules that

will govern the dispute were developed by UNCITRAL, an

international body. 40 We conclude that this arbitral panel, convened

38 Joint App’x 126.
39 Guo, 965 F.3d at 107.

UNCITRAL, established in 1966, “is a subsidiary body of the General
40

Assembly of the United Nations with the general mandate to further the

26
pursuant to the terms of the Treaty, thus retains affiliation with the

foreign States, despite its functional independence in other ways.

Accordingly, this factor weighs in favor of finding that this arbitral

panel qualifies as a “foreign or international tribunal” within the

meaning of § 1782.

2. State Authority to Intervene or Alter Outcome.

State authority to influence or control an arbitration pursued

under this Treaty is limited, if not non-existent. Indeed, the Treaty

curtails the ability of Lithuania or Russia to intervene in an arbitration

under it or alter the outcome after the panel renders a decision.

progressive harmonization and unification of the law of international trade.”
UNCITRAL texts such as its model arbitration rules are drafted by “the Member
States of the Commission and other States (referred to as ‘observer States’), as well
as interested international inter-governmental organizations . . . and non-
governmental organizations . . . .” UNITED NATIONS COMM’N ON INTER’L TRADE
LAW, Frequently Asked Questions – Mandate and History (last visited July 13, 2021),
https://uncitral.un.org/en/about/faq/mandate_composition/history.

27
Additionally, the Fund has waived its right to have a Lithuanian court

review the result from this arbitration.

We recognize that an arbitration against a foreign State, whether

conducted pursuant to a bilateral investment treaty like this Treaty or

otherwise, necessarily requires that the foreign State consent to subject

itself to binding dispute resolution. 41 That said, if a foreign State

against whom the arbitration is proceeding was allowed to control the

arbitration’s outcome, the purpose of a bilateral investment treaty like

the Treaty here—which has the aim of encouraging investment

between Russia and Lithuania—would be frustrated. In the

circumstances presented here, we conclude that this factor—whether

there is foreign State authority to intervene or alter the arbitration

41 Cf. RESTATEMENT (FOURTH) OF FOREIGN RELATIONS LAW OF THE UNITED
STATES § 458 note 6 (AM. LAW INST. 2018) (“In U.S. practice, bilateral investment
treaties . . . may be enforced in courts in the United States and thus operate to
remove a foreign state’s sovereign immunity in such proceedings.” (citing Schneider
v. Kingdom of Thailand, 688 F.3d 68 (2d Cir. 2012) (holding that bilateral investment
treaties provided conditions for the formation of written agreements to arbitrate
under the New York Convention); Republic of Ecuador v. Chevron Corp., 638 F.3d 384
(2d Cir. 2011) (same))).

28
outcome—is neutral as to whether this arbitral panel qualifies as a

“foreign or international tribunal” within the meaning of § 1782.

3. Nature of Jurisdiction Possessed by the Panel.

Critically, the arbitral panel in this case derives its adjudicatory

authority from the Treaty, a bilateral investment treaty between

foreign States entered into by those States to adjudicate disputes

arising from certain varieties of foreign investment, rather than an

agreement between purely private parties or any other species of

private contract.

In Guo, we observed that an “arbitral body under a bilateral

investment treaty may be a ‘foreign or international tribunal’” when it

derives its adjudicatory authority from the “intervention or license of

any government to adjudicate cases arising from certain varieties of

29
foreign investment.” 42 The arbitral panel here is authorized to resolve

the dispute between the Fund and Lithuania under the terms of the

Treaty—a bilateral investment treaty—and thus closely resembles the

sort of arbitral body that we anticipated in Guo would qualify as a

“foreign or international tribunal.” Accordingly, this factor weighs

heavily in favor of concluding that this arbitral panel qualifies as a

“foreign or international tribunal” within the meaning of § 1782.

4. Arbitrator Selection Process.

The process of selecting the members of the arbitral panel was

conducted here in accordance with the Treaty. Each party selected one

arbitrator and those two arbitrators were required to select a third

arbitrator, who would preside. The three arbitrators selected are all

private parties—two arbitration lawyers and one law professor—

42 Guo, 965 F.3d at 108 n.7; see also NBC, 165 F.3d at 190 (“[A]n international
tribunal owes both its existence and its powers to an international agreement.”
(quoting Hans Smit, Assistance Rendered by the United States in Proceedings Before
International Tribunals, 62 COLUM. L. REV. 1264, 1267 (1962))).

30
which is suggestive of a “private” arbitration. But, as we noted in Guo,

“this factor is not determinative, as agreements between countries to

arbitrate disputes between their citizens may involve selection of the

arbitrators by the parties”—including, of course, a foreign State

party—“and such a tribunal may be a ‘foreign or international

tribunal’ [under § 1782] notwithstanding this fact.” 43 Accordingly,

although this factor weighs against concluding that the arbitral panel

is a “foreign or international tribunal,” it is not determinative.

5. Additional Attributes Suggestive of a “Foreign or International

Tribunal"

Consistent with Guo, we consider also any additional

“functional attributes” that may suggest that the arbitral panel is a

43 Guo, 965 F.3d at 108.

31
“foreign or international tribunal” rather than a “private arbitral

body.” 44 There are at least two such attributes here.

First, Lithuania, in its capacity as a foreign State, is one of the

parties to this arbitration. In Guo we observed that the CIETAC

arbitration was “between two private parties,” thus differentiating it

from the sort of arbitration presented here—one between a private

party and a foreign State. 45

Second, the importance of bilateral investment treaties as tools

of international relations supports a conclusion that this arbitral panel,

convened pursuant to the Treaty, constitutes a “foreign or

international tribunal.” Russia and Lithuania entered into this Treaty

for the purpose of establishing favorable conditions for investments

made by investors of one foreign State in the territory of the other, in

44 Id. at 107–08.
45 Id. at 108 n.7.

32
recognition “that the promotion and reciprocal protection of

investments, based on the present Agreement, will be conducive to the

development of mutually beneficial trade and economic, scientific and

technical co-operation.” 46 By its terms, the Treaty serves numerous

foreign policy goals. That this arbitral panel was assembled pursuant

to this Treaty—as part of this effort to facilitate mutually beneficial

relations between Russia and Lithuania—signals that this arbitration

differs from a private commercial arbitration. 47

* * *

In sum, we hold that this arbitration between Lithuania and the

Fund, taking place before an arbitral panel convened pursuant to the

46 Joint App’x 70.
47Cf. BG Grp., PLC v. Republic of Argentina, 572 U.S. 25, 32 (2014) (explaining
that the Court granted a petition for certiorari concerning the “local litigation
requirement” of a bilateral investment treaty because of “the importance of the
matter for international commercial arbitration” and citing K. Vandevelde, Bilateral
Investment Treaties: History, Policy & Interpretation 430–32 (2010) to explain “that
dispute-resolution mechanisms allowing for arbitration are a ‘critical element’ of
modern day bilateral investment treaties”).

33
Treaty, a bilateral investment treaty to which Lithuania is a party,

qualifies as a “foreign or international tribunal” under § 1782.

This holding is consistent with legislative intent. Before 1964, an

older version of § 1782 provided discovery assistance “only to a

tribunal established by a treaty to which the United States was a party

and then only in proceedings involving a claim in which the United

States or one of its nationals was interested.” 48 In 1964, Congress

amended § 1782 to “broaden” its reach beyond its original scope to

allow discovery assistance to “intergovernmental tribunals not

involving the United States.” 49 Here, the arbitral panel closely

resembles the tribunals included in § 1782’s pre-amendment scope,

once modified to include intergovernmental tribunals; it is a panel

48NBC, 165 F.3d at 190 (citing S. REP. No. 88-1580 (1964), reprinted in 1964
U.S.C.C.A.N. 3782, 3784 (“Senate Report”)).
49 Id. (emphasis added). Its scope was broadened because, “[c]learly, the
interest of the United States in peaceful settlement of international disputes is not
limited to controversies to which it is a formal party.” Id. (quoting Senate Report at
3785).

34
“established by a treaty to which [Lithuania and Russia are parties] . . .

in [a] proceeding[ ] involving a claim in which [Russia] or one of its

nationals [is] interested.” 50 Accordingly, finding that the instant

arbitral panel is eligible for § 1782 discovery assistance is consistent

with § 1782’s modern expansion to include intergovernmental

tribunals.

Thus, as the arbitration is a “proceeding in a foreign or

international tribunal,” the District Court did not err in concluding

that the Fund may seek § 1782 discovery assistance.

II.

The second statutory requirement of § 1782 at issue requires that

the party seeking discovery assistance be an “interested person.” The

Fund asserts that it qualifies as an “interested person” under § 1782 as

a litigant because the Fund initiated the arbitration as the assignee of

50 See Senate Report at 3784.

35
a Snoras bank shareholder. We agree. Under Intel, “no doubt litigants

are included among, and may be the most common example of, the

‘interested person[s]’ who may invoke § 1782.” 51

AlixPartners contests the Fund’s status as a “litigant” because

the Fund has thus far failed to affirmatively submit proof, both in the

arbitration and before this Court, that it is the assignee. 52 But

AlixPartners’s argument overcomplicates a straightforward inquiry.

The Fund is plainly an “interested person” because it is a party to the

very arbitration under way between the Fund and Lithuania that is the

basis of this proceeding in a U.S. court. 53 Accordingly, the District

51 Intel, 542 U.S. at 256.
52The arbitration has been bifurcated to first address this issue concerning
the Fund’s standing before proceeding to the merits.
53 See Certain Funds, Accts. and/or Inv. Vehicles v. KPMG, L.L.P., 798 F.3d 113,
119 (2d Cir. 2015) (“[T]he [Intel] Court cited with approval the expansive definition
[of ‘interested persons’] provided by [Professor] Hans Smit, [the] leading academic
commentator on the statute [and one who famously] played a role in its drafting.
Professor Smit maintained that the phrase ‘any interested person’ is ‘intended to
include not only litigants before foreign and international tribunals, but also foreign
and international officials as well as any other person . . . [who] merely possess[es]

36
Court did not err in determining that the Fund sufficiently

demonstrated that it is an “interested person” for the purpose of §

1782.

III.

Having held that the Fund qualifies as an “interested person”

who properly applied for discovery assistance for use in a “proceeding

in a foreign or international tribunal,” we proceed to review the

District Court’s decision to grant the Fund’s § 1782 discovery

application. Finding no abuse of discretion, we affirm. 54

Under § 1782, a district court may, in its discretion, grant

discovery assistance after considering both the “twin aims” of § 1782

a reasonable interest in obtaining the assistance.’ Hans Smit, International Litigation
Under the United States Code, 65 COLUM. L. REV. 1015, 1027 (1965).”).
54Lancaster Factoring Co., 90 F.3d at 42 (“If the district court has properly
interpreted the requirements of § 1782, its decision whether or not to order
discovery is reviewed only for abuse of discretion. The court will be found to have
abused its discretion only if there was no reasonable basis for its decision.”)
(internal citation, brackets, and quotation marks omitted).

37
and the so-called Intel factors. The twin aims of § 1782 are to “provid[e]

efficient means of assistance to participants in international litigation

in our federal courts” and to “encourag[e] foreign countries by

example to provide similar means of assistance to our courts.” 55

AlixPartners argues that discovery assistance would run

contrary to the second of those aims because there is no opportunity

for reciprocity, inasmuch as the arbitral panel here is composed of non-

governmental arbitrators and it exists only temporarily. However,

AlixPartners’s focus on the ad hoc character of the arbitral panel

overlooks a more important point: that § 1782 discovery assistance

here would aid and enforce the efficacy of the Treaty itself. If the

United States or its citizens were involved in such an arbitration, the

Congressional policy of providing § 1782 discovery assistance in cases

55 Schmitz v. Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79, 84 (2d Cir. 2004)
(citation omitted). § 1782 provides assistance to participants in international
litigation by directing that “[t]he district court of the district in which a person
resides or is found may order him to give [discovery] for use in a proceeding in a
foreign or international tribunal.”

38
such as this would encourage other countries to provide similar means

of assistance. Accordingly, we find no abuse of discretion in the

District Court’s finding that granting § 1782 discovery assistance is

consistent with the statute’s twin aims.

Likewise, we find no abuse of discretion in the District Court’s

consideration of the Intel factors. The Intel factors to be considered are:

(1) whether “the person from whom discovery is sought is a

participant in the foreign proceeding”; (2) “the nature of the foreign

tribunal, the character of the proceedings underway abroad, and the

receptivity of the foreign government or the court or agency abroad to

U.S. federal-court judicial assistance”; (3) “whether the § 1782(a)

request conceals an attempt to circumvent foreign proof-gathering

restrictions or other policies of a foreign country or the United States”;

and (4) whether the request is “unduly intrusive or burdensome.” 56

56 Intel, 542 U.S. at 264–65.

39
 As to the first Intel factor, the Fund asserts that it cannot obtain

the same documents and testimony from Lithuania as from

AlixPartners, LLP, Freakley’s current employer, because the Fund

seeks responsive documents and communications beyond those

accessible through Lithuania. The Fund also seeks to depose Freakley.

We agree with the District Court that this factor weighs in favor of

granting the discovery request. AlixPartners is not a participant in this

arbitration and is otherwise outside the arbitral panel’s jurisdictional

reach as a third party, and the evidence sought is not otherwise readily

discoverable.

Second, the District Court properly found that consideration of

“the receptivity of the foreign [tribunal] to U.S. federal-court judicial

assistance” weighs in favor of granting the Fund’s discovery request.

Absent authoritative proof that a foreign tribunal would reject the

evidence, we have explained that a court should generally allow

40
discovery if doing so would further § 1782’s goals. 57 As emphasized

by the Fund here, the arbitral panel declined to bar the Fund from

seeking § 1782 discovery, which suggests that the panel would be

receptive to such discovery if obtained. 58 In the words of the District

Court, “there is no reason to doubt that the [arbitral panel] would be

receptive to U.S. federal-court judicial assistance.” 59

Third, although AlixPartners argues that Lithuanian bank

secrecy laws prohibit the disclosure of the documents sought by the

Fund, the provision of § 1782 that “[a] person may not be compelled

to give his testimony or statement or to produce a document or other

thing in violation of any legally applicable privilege” is not as

expansive as it may at first blush appear.

57 See Euromepa S.A. v. R. Esmerian, Inc., 51 F.3d 1095, 1100 (2d Cir. 1995).
58 Joint App’x 219–20.
59 In re Fund for Protection of Inv. Rights in Foreign States, 2020 WL 3833457, at
*3.

41
 Indeed, in Intel, the Supreme Court expressly held that § 1782

does not have a “foreign-discoverability rule” that would

“categorically bar a district court from ordering production of

documents where the foreign tribunal or ‘interested person’ would not

be able to obtain the documents if they were located in the foreign

jurisdiction.” 60 Likewise, in Brandi-Dohrn, we held that there is no

statutory basis for a foreign-admissibility requirement. 61 Accordingly,

the foreign tribunal is “free to exclude the evidence or place conditions

on its admission.” 62 When the arbitral panel declined to bar the Fund

from pursuing this § 1782 application in its December 2019 order, it

stated that it would consider evidence in accord with this concept. The

arbitral panel indicated that barring discovery at that stage would be

“premature” despite Lithuania’s argument that it “should not be

60 Intel, 542 U.S. at 259–60.
61 Brandi-Dohrn, 673 F.3d at 82.
62 Id.

42
receptive to allowing the [§ 1782] evidence.” 63 Instead, the arbitral

panel determined that

[Lithuania] will be able to contest any evidence
that might be obtained pursuant to the [Fund’s
§] 1782 Application . . . before the Tribunal. In
particular, as argued by the [Fund], [Lithuania]
will have the opportunity in due course to object
to the admissibility of any such evidence at issue -
if the [Fund] introduces it into the record - on the
basis of privilege allegedly accorded to this
evidence by Lithuanian banking law. 64

Likewise, the District Court observed that the privileges

identified by AlixPartners “may regulate conduct in Lithuania and

govern proceedings there, but [the Fund] seeks discovery for use in an

international proceeding, with its own rules governing discoverability

and admissibility of evidence”—and UNCITRAL arbitration rules do

not appear to prohibit acquisition or use of the information sought by

63 Joint App’x 220.
64Id. at 219.

43
the Fund. 65 Therefore, the District Court stated, if AlixPartners believes

that a privilege under Lithuanian law applies such that it is prevented

from disclosing certain documents, AlixPartners may “seek a

protective order or otherwise raise objections to the relevant portion

of [the Fund’s] discovery request.” 66

This approach—to address discoverability and admissibility

issues as they arise rather than to impose a categorical bar in the first

instance—is in accord with the legislative history of § 1782, which left

“the issuance of an appropriate order to the discretion of the court

which, in proper cases, may refuse to issue an order or may impose

conditions it deems desirable.” 67 A holding to the contrary, as we have

65 In re Fund for Protection of Inv. Rights in Foreign States, 2020 WL 3833457, at
*3.
66 Id. at *3.
67 Intel, 542 U.S. at 260–61 (quoting Senate Report at 3788); see also Brandi-
Dohrn, 673 F.3d at 81 (“[A]lthough there is no requirement under § 1782 that the
type of discovery sought be available in the relevant foreign jurisdiction, a court
may look to the nature, attitude and procedures of that jurisdiction as ‘useful
tool[s]’ to inform its discretion.”) (quoting Schmitz, 376 F.3d at 84).

44
observed, would “requir[e] a district court to apply the admissibility

laws of the foreign jurisdiction[, which] would require interpretation

and analysis of foreign law and such ‘[c]omparisons of that order can

be fraught with danger.’” 68 That danger is apparent in this case—

AlixPartners and the Fund disagree as to whether the material sought

is privileged under Lithuanian law, and whether such privileges

would apply in this treaty arbitration, governed as it is by UNCITRAL

rules that make it likely that the arbitral panel would apply Lithuanian

law to substantive matters. Accordingly, we find no error in the

District Court’s determination that it would consider the Lithuanian

privilege issue as necessary and appropriate as discovery proceeds,

such as by granting protective orders or hearing objections. 69

Fourth, the District Court did not err in finding that the Fund’s

request is not “unduly intrusive or burdensome” under Federal Rule

68 Brandi-Dohrn, 673 F.3d at 82 (quoting Intel, 542 U.S. at 263).
69 See, e.g., Mees v. Buiter, 793 F.3d 291, 303 n.20 (2d Cir. 2015).

45
of Civil Procedure 26. 70 We agree with the District Court that the

Fund’s “requests go to the heart of [its] case in the [a]rbitration, and

appear to be proportionate to [its] needs.” 71 And, as discussed above,

AlixPartners “may apply to [the District] Court for a protective order

or for other relief as necessary to appropriately limit discovery.” 72

All in all, we cannot conclude that the District Court erred, much

less abused its discretion, in weighing the relevant factors and

70In re Fund for Protection of Inv. Rights in Foreign States, 2020 WL 3833457, at
*4.; see Mees, 793 F.3d at 302 (“[A] district court evaluating a § 1782 discovery
request should assess whether the discovery sought is overbroad or unduly
burdensome by applying the familiar standards of Rule 26 of the Federal Rules of
Civil Procedure.”); Fed. R. Civ. P. 26(b)(1) (“Parties may obtain discovery regarding
any nonprivileged matter that is relevant to any party’s claim or defense and
proportional to the needs of the case, considering the importance of the issues at
stake in the action, the amount in controversy, the parties’ relative access to relevant
information, the parties’ resources, the importance of the discovery in resolving the
issues, and whether the burden or expense of the proposed discovery outweighs its
likely benefit.”).
71 In re Fund for Protection of Inv. Rights in Foreign States, 2020 WL 3833457, at
*4.

Id. (citing In re Accent Delight Int’l Ltd., 791 F. App’x 247, 252 (2d Cir. 2019)
72

(“[T]he district court did not abuse its discretion by concluding that [p]etitioners’
requests would not be unduly burdensome and that, if issues arose, they could be
resolved through a protective order.”)).

46
concluding that they favored granting of the Fund’s § 1782

application. 73

IV.

As a final matter, AlixPartners argues that the District Court

abused its discretion in denying AlixPartners’s motion for

reconsideration. AlixPartners takes issue with what it characterizes as

the District Court’s “bright-line rule” that “arbitrations conducted

pursuant to a bilateral investment treaty like the [Treaty before us

here] do qualify as ‘foreign or international tribunals’ under § 1782.” 74

We disagree with that characterization of the District Court’s

decision. As the foregoing discussion makes clear, we do not create a

“bright-line rule” that all arbitrations conducted pursuant to a bilateral

investment treaty qualify as a “foreign or international tribunal,” and

73 See supra note 22.
74 Appellants Br. 54 (quoting In re Fund for Protection of Inv. Rights in Foreign
States, 2020 WL 5026586, at *2).

47
the District Court likewise created no such rule. Instead, we hold that

the features of this particular arbitration, conducted pursuant to this

Treaty, are consistent with the functional features of foreign or

international arbitral tribunals that, as we emphasized in Guo,

differentiate such arbitrations from private commercial arbitration. In

these circumstances, we find no abuse of discretion in the District

Court’s denial of reconsideration of its July 8, 2020 Order.

CONCLUSION

To summarize, we hold as follows:

(1) After considering the relevant Guo factors, this arbitration is

between an investor and a foreign State party to a bilateral

investment treaty (here, the Treaty), taking place before an

arbitral panel established by that Treaty, and therefore it is a

“proceeding in a foreign or international tribunal” under § 1782.

48
 (2) The Fund is a party to the arbitration for which it seeks

discovery assistance and the Fund is therefore an “interested

person” under § 1782.

(3) The District Court did not abuse its discretion or otherwise err

in determining that the Intel factors weigh in favor of granting

the Fund’s application for discovery assistance.

For the foregoing reasons, we AFFIRM the July 8, 2020 Order and the

August 25, 2020 Order of the District Court.

49