Parties may not seek discovery in USA in aid of FOREIGN-SEATED ARBITRATIONS

A CIRCUIT SPLIT HAS EMERGED OVER THE USE OF SECTION 1782 TO OBTAIN DISCOVERY IN AID OF PRIVATE COMMERCIAL ARBITRATIONS SEATED OUTSIDE THE UNITED STATES...

- James P Duffy IV

AT A GLANCE…

In Servotronics, Inc. v. Rolls-Royce PLC, the U.S. Court of Appeals for the Seventh Circuit recently held that 28 U.S.C. section 1782 does not authorize a district court to compel discovery for use in private arbitrations seated outside the United States.1 Rolls-Royce is significant because: (1) it deepens the circuit split that has emerged over the use of section 1782 to obtain discovery in aid of private commercial arbitrations seated outside the United States; and (2) it virtually assures that the U.S. Supreme Court will take the issue up on certiorari when the opportunity arises.

THE SEVENTH CIRCUIT COURT OF APPEALS DEEPENS THE CIRCUIT SPLIT

The Rolls-Royce decision arose from the same factual event that led to a conflicting section 1782 decision from the Fourth Circuit in March of this year in Servotronics, Inc. v. Boeing Co., 954 F.3d 209 (4th Cir. 2020), which is discussed in detail in our prior alert. There, an aircraft engine manufactured by Rolls-Royce caught fire during maintenance because of a faulty valve, and the resulting fire severely damaged a Boeing 787 aircraft in which that engine was housed.