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In many foreign jurisdictions, discovery can be onerous from non-parties. For instance, in Canada, discovery will only be allowed if a) the moving party has been unable to obtain the information from other persons, b) it would be unfair to require the moving party to proceed to trial without the opportunity to obtain the discovery and c) the discovery will not entail unreasonable expenses or unfairness to the non-party.

Canadian courts have viewed the use of Section 1782 favorably in proceedings pending there.

In CC Chemicals Ltd. v. Sternson Ltd., (1980) 116 D.L.R. (3d) 239 (S.C.), the court permitted Section 1782 to fill a procedural gap since it did not otherwise interfere with the Canadian action.

Pre-Hearing Discovery From Non-Party To An Arbitration Disallowed.The Second Circuit has held that Section 7 of the Federal Arbitration Act does not authorize an arbitrator to compel pre-hearing document discovery from non-parties to an arbitration.  Life Receivables Trust v. Syndicate 102, 549 F.3d 210 (2d Cir. 2008).  Reversing the district court’s grant of a motion to enforce a discovery subpoena, the court of appeals concluded that documents are discoverable in arbitration proceedings only when brought before the arbitrators by a testifying witness.  The court declined to find exceptions for either closely-related entities or for parties to the arbitration agreement that are not parties to the arbitration itself.  In reaching this result, the Second Circuit followed the Third Circuit, but split with the Eighth Circuit.

Discovery On Behalf Of Foreign Tribunals Does Not Encompass Arbitrations.The Southern District of Texas has held that 28 U.S.C. § 1782, which authorizes a district court to order persons residing in the district to give discovery “for use in a proceeding in a foreign or international tribunal,” does not encompass private, international arbitration proceedings.  La Comision Ejecutiva Hidroelecctrica Del Rio Lempa v. El Paso Corp., No. H-08-335, 2008 WL 5070119 (S.D. Tex. Nov. 20, 2008).  The court declined to follow the other district courts that have held to the contrary.  In holding section 1782 inapplicable, the court noted that arbitration is intended as a speedy and economical means of dispute resolution, and that extensive discovery through federal courts would harm international comity.

The named insured and named party in a London reinsurance arbritration requested that the district court order a non-party witness to testify in the arbitration.

The non-party argued that the scope of 28 U.S.C. §1782 was limited to only governmental entities.

While the District Court conceded that the court’s powers under 28 U.S.C. §1782 have been expanded over the past several years, the Intel decision did not specifically reference private arbitrations as one of those areas in which the statute granted authority.  The District Court, therefore, declined to follow several subsequent decisions which interpreted the Intel decision to apply to private arbitrations.