Arbitration Institution Backs High Court Discovery Petition

Law360

In her Law 360 piece, author Caroline Simson covered the amicus brief CPR filed in Servotronics Inc. v. Rolls Royce PLC et al., No. 20-794 before the US Supreme Court on January 5, 2021. 

 

Arbitration Institution Backs High Court Discovery Petition

By Caroline Simson

Law360 (January 5, 2021, 9:43 PM EST) -- The International Institute for Conflict Prevention & Resolution is backing a bid for the U.S. Supreme Court to resolve whether U.S. law allows federal courts to order discovery for private commercial arbitration abroad, arguing Tuesday that uncertainty on this "highly important issue" will prevail without its help.

CPR — a nonprofit organization that describes itself as a "global thought leader in
conflict management" and administrator of international arbitrations — told the justices that a split among the federal circuit courts on the question not only creates an opportunity for "blatant" forum shopping but also means that parties may be left with no option but to carry out "extensive, time-consuming and tremendously expensive litigation."

The institution argued that the uncertainty and protracted litigation surrounding the issue undermines the purpose of arbitration to provide a fast and efficient method of dispute resolution.

At issue is Section 1782 of the U.S. Code, which allows federal courts to order entities in their districts to turn over evidence to be used in certain foreign proceedings. The question of whether the statute can be used with respect to private commercial arbitration abroad has inspired intense debate and discussion among both the courts and the arbitration community.

"The point is that it cannot be overstated that the international arbitration community is anxiously awaiting the Supreme Court's definitive resolution of this important issue of federal law that has significant implications globally for the resolution of disputes arising from cross-border business transactions," CPR told the justices.

CPR noted that the case at hand, in which aerospace parts maker Servotronics Inc. is seeking information for a $12.8 million U.K. arbitration over an engine fire, presents a rare opportunity for the justices to weigh in. Typically, cases relating to this issue become moot before making it to the Supreme Court.

But the tribunal conducting the underlying arbitration here is set to hold the merits hearing in May, meaning that the arbitration "will almost certainly" remain extant during the Supreme Court's current term, CPR said. The institute noted that other cases pending in Third and Ninth Circuits — which have not yet addressed the application of Section 1782 with respect to commercial arbitration abroad— risk becoming moot before any of those could make their way to the Supreme Court.

Reached for comment Tuesday, counsel for CPR, John B. Pinney of Graydon Head & Ritchey LLP, emphasized the importance of the justices resolving the question, particularly since cases involving Section 1782 often become moot before reaching the high court.

"There are many snares and hurdles for 1782 litigants on the way up, even more so where you have an arbitration tribunal that is acting pretty much independently from the 1782 action," he said.

Condon & Forsyth LLP partner Stephen R. Stegich, representing Servotronics, likewise emphasized the importance of the high court taking on the case, telling Law360 on Tuesday that the issue needs to be resolved given its "enormous importance" in international arbitration.

In the petition, Servotronics is challenging the Seventh Circuit's September decision rejecting its petition under Section 1782 for permission to subpoena Boeing to turn over documents for an arbitration brought by Rolls-Royce PLC in London.

Counsel for Boeing could not immediately be reached for comment Tuesday.

 

Read the full article published by Law360 here.