Is an Arbitration Panel A "Tribunal"?

In the course of an arbitration in England under the English Arbitration Act of 1996, entitled Medway Power Limited against TBV Power Limited and Marubeni Europower Limited, Medway Power Limited moved the United States District Court for the Southern District of New York, Duffy, J., for an order requiring General Electric Company, a non-party to the Medway arbitration, to produce documents for use in that arbitration. In the Matter of the Application of Medway Power, Limited for an Order under 28 U.S.C. §1782 to Conduct Discovery of General Electric Company for use in an Arbitration pending in the United Kingdom against TBV Power Limited and Marubeni, Europower Limited.

28 U.S.C. §1782(a) provides:

Assistance to foreign and international tribunals and to litigants before such tribunals.

(a) The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court. By virtue of his appointment, the person appointed has power to administer any necessary oath and take the testimony or statement. The order may prescribe the practice and procedure, which may be in whole or part the practice and procedure of the foreign country or the international tribunal, for taking the testimony or statement or producing the document or other thing. To the extent that the order does not prescribe otherwise, the testimony or statement shall be taken, and the document or other thing produced, in accordance with the Federal Rules of Civil Procedure.

A person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege.

In resisting Medway's motion, General Electric pointed to the United States Code's consistent distinction between "tribunals" and "arbitrations" as evidence that the term "tribunal," as used in the Code, does not encompass "arbitrations." For example, see 5 U.S.C. §552b(c)(10) (agency not required to disclose information concerning "the agency's participation in a civil action or proceeding, an action in a foreign court or international tribunal, or an arbitration.")

Judge Duffy first looked to the definition of "tribunal" to determine whether Section 1782 is applicable to private arbitrations. Citing Webster's New World Dictionary (3d College Ed. 1986), Judge Duffy determined that "tribunal" does not encompass a private arbitration. Though Judge Duffy acknowledged that under Section 1(a) of the English Arbitration Act of 1996, "the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal," he held that this "does not make an arbitration a tribunal in a formal sense." Judge Duffy held instead that for purposes of Section 1782 a private arbitration is not a tribunal.

Judge Duffy determined that Congress's intent in enacting Section 1782 was to assist "official, governmental bodies exercising an adjudicatory function," rather than to assist arbitrations that are treated by Congress and the courts as creatures of contract that a court should enforce just like any other contractual obligation.

Furthermore, Judge Duffy noted that Section 1782, as originally enacted, referred only to judicial proceedings. In 1964, however, the term tribunal was added to make it clear that assistance is not confined to proceedings in conventional courts, but also to foreign governmental agencies exercising a judicial or quasi-judicial function. Thus, Congress chose not to include the term "arbitrator" or any term or terms more inclusive than "foreign and international tribunals."

The only case presented by Medway as on point was In Re Application of Technostroyexport, 853 F.Supp. 695 (S.D.N.Y. 1994), in which the Court expressed the view that "an arbitrator or an arbitration panel is a `foreign ... tribunal' within the meaning of Section 1782(a)," Judge Duffy distinguished Technostroyexport which involved a discovery dispute between parties that had formally agreed to submit their controversy to arbitration. General Electric, however, was not a party to the Medway arbitration and did not consent to arbitrate any dispute with Medway. Nor had General Electric agreed to abide by any decision of the English attorney selected as an arbitrator in the Medway matter.

Finally, Judge Duffy noted the inherent incongruity in permitting a district court anywhere in the United States to order discovery, under Section 1782, for a foreign arbitration while under the Federal Arbitration Act only the court of the district in which the arbitration is taking place can compel discovery and then only of witnesses found in that same district. Judge Duffy denied Medway's petition.

The Medway decision carries important implications in reinsurance arbitrations because it raises a question as to the jurisdiction of United States courts to compel discovery of non-parties such as intermediaries who are otherwise key players in the negotiation of reinsurance contracts. Whereas under Technostroyexport Section 1782 appeared to provide a valuable tool for United States District courts to enforce discovery demands against non-parties such as intermediaries, Medway significantly limits the availability of such discovery devices in foreign private arbitrations by delineating a rigid definition of "tribunal" that does not encompass private arbitration.

According to Medway a United States court does not have the authority under Section 1782 to enforce a discovery demand made of a reinsurance intermediary in a foreign reinsurance arbitration unless the intermediary is a party to the arbitration or had otherwise agreed to abide by the decisions or orders of the arbitrator.

In order to compel discovery from an intermediary the party demanding discovery would be required to show that the intermediary was a signatory to the reinsurance contract and therefore subject to the arbitration clause or, in the more likely event the intermediary was not a signatory, the movant would have to prove that the intermediary is an agent of the reinsured. See Mutual Benefit Life Insurance Company v. Zimmerman, 783 F.Supp. 853, aff'd, 790 F.2d 899 (3rd Cir. 1992). The moving party has the burden of proving the agency relationship.