Lloyd's Maritime and Commercial Law Quarterly
DISCOVERY IN THE USA FOR ARBITRATION ELSEWHERE: A POSTSCRIPT
Martin Davies*
ZF Automotive v Luxshare
A Comment in the November 2020 issue of this Quarterly
1 described the difference of opinion among federal circuit courts of appeal in the United States about whether federal courts can order discovery under 28 USC, s.1782 for use in private arbitral proceedings in other countries. The Comment stated that “[I]t seems likely that the US Supreme Court will eventually have to step in to give an authoritative answer”.2 The Supreme Court gave that authoritative answer on 13 June 2022, when it handed down its decision in ZF Automotive US Inc v Luxshare Ltd.3 The Court held unanimously that the phrase “foreign or international tribunal” in s.1782 does not extend to private arbitral tribunals, with the result that discovery for use in foreign private arbitration is no longer available.
ZF Automotive was a consolidation of two appeals. In the first case, a Hong Kong-based company alleged fraud in a sales transaction in which it had bought goods from an American subsidiary of a German corporation. The sale contract provided for arbitration under the Arbitration Rules of the German Arbitration Institute (Deutsche Institution für Schiedsgerichtsbarkeit, or DIS). To prepare for the arbitration, the claimant filed an ex parte application in the US District Court for the Eastern District of Michigan, seeking information from the American subsidiary and two of its senior officers. The district court granted the motion to compel discovery and denied the American company’s motion for a stay. The US Court of Appeals for the Sixth Circuit denied a stay pending appeal but the
* D.C.L., Admiralty Law Institute Professor of Maritime Law, Tulane University Law School, New Orleans; Director, Tulane Maritime Law Center.
1. [2020] LMCLQ 535.
2. Ibid, 536.
3. (2022) 142 S Ct 2078 (hereafter ZF Automotive).
Case and comment
549