Willkie Victory at U.S. Supreme Court Limits the Scope of Discovery in Foreign and International Arbitrations

June 15, 2022

Willkie successfully represented AlixPartners and its CEO in challenging a Second Circuit decision before the Supreme Court.

On June 13, Willkie secured a significant victory on behalf of AlixPartners, LLP and its CEO at the Supreme Court of the United States that limits the ability of parties to an arbitration abroad to compel discovery through orders from the federal courts.

In AlixPartners, LLP v. The Fund for Protection of Investors’ Rights in Foreign States, No. 21-518, the Supreme Court reversed a decision by the U.S. Court of Appeals for the Second Circuit, holding that a private party in a foreign or international arbitration may not seek discovery in the United States for use in a proceeding before non-governmental arbitrators, even where the arbitration involves a foreign sovereign and the arbitral proceeding is authorized under a treaty between two foreign governments.

In a unanimous decision authored by Justice Amy Coney Barrett, the Supreme Court limited the scope of 28 U.S.C. § 1782, which empowers federal district courts to order persons or entities within their jurisdiction to provide testimony and produce documents “for use in a proceeding in a foreign or international tribunal.” The Supreme Court found that an ad hoc arbitration brought by a private Russian investor against the Republic of Lithuania relating to the confiscation of his investment in a Lithuanian bank did not qualify as a “foreign or international tribunal” under the statute. The Supreme Court also noted that its decision is consistent with the provisions of the Federal Arbitration Act, which significantly limit the ability of arbitral parties to secure discovery orders from the federal courts in aid of arbitrations.

After initiating arbitration, the Fund for Protection of Investor Rights in Foreign States, a Russian corporation and the assignee of the Russian investor, filed a §1782 application in the U.S. District Court for the Southern District of New York, seeking information from AlixPartners and its CEO, who had served as temporary administrator of the failed Lithuanian bank following its nationalization by Lithuania’s central bank. The District Court granted the Fund’s discovery request and the Second Circuit subsequently affirmed. The Supreme Court then granted Willkie’s petition for certiorari on behalf of AlixPartners and its CEO, consolidating the case with another to decide the breadth of Section 1782.

The case was argued before the U.S. Supreme Court by senior counsel Joseph Baio. The Willkie team included partners Mark Stancil, Charles Cording and Stuart Lombardi, associates Jordan Wall, Richard Li, Samantha Prince and Xiaoli (Lily) Wu, and law clerks William Montemarano and Christina Peck.