Case of the Day: In re Insurance Co. of British Columbia

Men and boys standing around an early 20th century auto wreck in a black-and-white photo

The case of the day is In re Insurance Co. of British Columbia (D. Ariz. 2024). I am giving it that name, even though the caption says, unhelpfully, “In re Ex Parte Application Pursuant to Section 204 of the Federal Arbitration Act and A.R.S. § 12-1507 For An Order To Provide Documents And/Or Appear Remotely And Testify in a Foreign Arbitration Hearing.” A Canadian Insurer brought an application under Section 1782 seeking evidence from Quick Silver Transportation, LLC and the Arizona Department of Transportation for evidence for use in an arbitration to be held in Canada. The arbitration was between a Canadian who had been injured in a motor vehicle accident in Arizona and his insurer over insurance coverage.

You might stop and say, “Under ZF Automotive, the application must fail, because this is a private arbitration.” As you’ll recall, in ZF Automotive, the Supreme Court held that Section 1782 does not apply in private arbitrations because a private arbitral tribunal is not a “foreign or international tribunal” in the relevant sense. There is still room for the use of Section 1782 in investor-state arbitration or other public arbitrations (although that matter is still not completely clear), but there should be no room for the use of Section 1782 in private disputes such as this.

But the judge noted that British Columbia law makes arbitration in such insurance coverage disputes mandatory. In a sense, the BC legislature is farming out what would otherwise be the work of its courts to arbitrators. In such circumstances, does it make sense to characterize the arbitration as private? And so the judge permitted the application to proceed. But this was a decision at the ex parte stage, and no doubt there will be further developments.

I think there is some logic to the court’s position. It seems more pertinent to ask whether a foreign state requires certain disputes to be resolved by a certain tribunal than to ask who pays the salaries of the members of the tribunal. On the other hand, the exception could swallow the rule, since under typical arbitration statutes the state requires lots of private disputes to be arbitrated (when there is a preexisting agreement to arbitrate). It would be useful to know more than the decision tells us about the post-award remedies available under this statutory scheme in British Columbia. That’s why we can only learn so much from ex parte decisions. I’ll keep my eye on this one.

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