United States Statute 28 USC §1782 can strike fear into an opponent bringing US discovery standards to proceedings ongoing either in a UK court or in arbitration. As the process gains wider recognition parties are turning to the US courts to seek assistance for ongoing or prospective proceedings in securing wide ranging discovery (both documents and oral evidence) on US standards against a relevant witness based in the United States. The policy purpose of the section is to promote reciprocity from other jurisdictions and to provide an efficient means of assistance to participants in international disputes.
Application for the issue of a subpoena is made ex parte to the federal district court for the district within which the witness resides. An application for discovery under the section must meet certain thresholds. The person from whom discovery is sought must reside (or be found) in the district of the district court to which the application is made. The discovery must be for use in proceedings before a foreign tribunal and the application must be made by a foreign or international tribunal or any interested person.
If the court is convinced that an order should be made it makes it and then it is for the witness to show cause why the order should not be confirmed. There is no requirement that an applicant first seek the requested discovery from the foreign tribunal. Nor must an applicant demonstrate that the discovery it seeks is admissible in the foreign proceedings. Depending on the local practice, the section applies equally to court and arbitration proceedings. It should be noted that the way in which the section is applied differs in different courts or ‘circuits’. It is thus of importance to consider the way in which the law has been interpreted and applied in the relevant court.
Having been served the witness may apply to set aside the subpoena as can the party to the proceedings in the other jurisdiction against whom the discovery will be used. There are grounds to reduce the scope of discovery such as arguments over proportionality or privilege and confidentiality. Parties have been known to make application to the foreign tribunal to forestall the whole process.
If the order is confirmed then subject to proportionality, the court applies the wide-ranging discovery standards of the United States so both documents and witness testimony may be required.
The scope of the process was highlighted by the US Supreme Court case of Intel Corp v Advanced Micro Devices, Inc (124 S. Ct. 2466 (2004)) in which AMD applied for a subpoena in order to assist in its anti-trust complaint against Intel before the European Commission. The Court agreed that the European Commission was a foreign tribunal and in principle the order could be made although the investigations were not concluded. The court also set out some of the considerations for the district court to consider the nature of the foreign tribunal; the character of the foreign proceedings; and the attitude of the foreign government, court or agency to assistance from the US federal courts and, specifically, whether the section 1782(a) request is an attempt to bypass restrictions on the discovery process or other policies of the foreign country or the US.
As a largely claimant firm the team at Edwin Coe has used section 1782 to good effect in the past. It can be a very effective tactic and the costs of the process in the district court is relatively small being subject to the usual rule that the losing party does not have to pay the costs of the winning party. It may look like a win win process but there are many considerations to be taken into account.
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