The case of the day is Application of Consorcio Ecuatoriano de Telecomunicaciones S.A. (11th Cir. 2012). CONCEL was a cell phone company. Jet Air Service Equador S.A. had a contract with CONCEL under which JASE provided transportation logistics services for the international shipping of cell phones and accessories. CONCEL alleged that JASE had fraudulently overbilled it by millions of dollars under the parties’ contract with the help of two former CONCEL employees. CONCEL represented that it planned to bring a civil action against its two former employees in Quito, Ecuador (and to bring a criminal action as well), but that under Ecuadoran law it was necessary to have all of the evidence necessary to prosecute the civil action at the time the action is commenced. CONCEL applied ex parte for judicial assistance under § 1782 and sought issuance of a subpoena to JAS Forwarding USA, Inc., JASE’s US affiliate, which, according to CONCEL, had participated in the overbilling.
The judge granted CONCEL’s ex parte request. JASE moved for leave to intervene for the purpose of seeking to vacate the order. According to JASE, CONCEL had refused to pay certain invoices, and JASE had commenced an arbitration in Ecuador before the Center for Arbitration and Conciliation of the Guayaquil Chamber of Commerce. In the arbitration, according to JASE, CONCEL’s defense was the the invoices did not reflect the parties’ agreed contract price. The judge allowed the intervention but refused to vacate his decision.
On appeal, the main question was whether the evidence was for use in a proceeding before an international tribunal, as the statue requires. CONCEL pointed to the arbitration as a foreign proceeding already pending. The court, setting new precedent in the Eleventh Circuit, cited Intel for the proposition that a private arbitral tribunal that satisfies the functional criteria the Court discussed in Intel is a tribunal for purposes of the statute. These criteria include: “whether the arbitral panel acts as a first-instance adjudicative decisionmaker, whether it permits the gathering and submission of evidence, whether it has the authority to determine liability and impose penalties, and whether its decision is subject to judicial review.” The court rejected the distinction between private and public arbitral tribunals that other circuits had drawn before the Intel decision.
I have previously noted reasons for hesitating before treating private arbitral tribunals as tribunals for purposes of § 1782, namely, (1) the expectation of parties to arbitration agreements that they will be avoiding the rigors of US pretrial discovery and (2) the incongruity of allowing parties in international private arbitrations with freer access to US discovery mechanisms than parties in domestic private arbitrations have—in a domestic arbitration the court will not compel a witness’s attendance without a summons issued by the arbitrators, 9 U.S.C. § 7, but under § 1782, a party to the arbitration can apply for judicial assistance without leave of the arbitrators. However, because receptivity is one of the factors relevant to a US court’s Intel analysis, and because, as Gary Born points out, the tribunal can act as a gatekeeper, the second of these reasons is relatively weak. The trend in the law seems clearly to be towards treating private tribunals as “tribunals” for purposes of § 1782.