Archive for May, 2013

Enforcement of Interim and Partial Awards: Emerging Coherence in US Law?

Wednesday, May 29th, 2013

Modern institutional arbitration rules encourage international arbitrators to address complex disputes surgically, by issuing partial and interim awards to prioritize solving the most difficult and contentious issues.  But American arbitration law offers arbitrators little helpful guidance about when their non-final awards may be confirmed or vacated.  And counsel in arbitrations seated in the US must do some educated guesswork as they try to fashion effective arbitration strategies with an eye toward judicial review . This is especially so as regards interim measures of protection, as the option of obtaining relief from the arbitral tribunal may be unattractive if the measures obtained cannot be judicially enforced.

The courts have identified three categories of non-final awards that are reviewable. Only one of the categories has the imprimatur of the US Supreme Court — and that in an unusual fashion  This might be termed the “procedural hardship exception,” and it is a by-product of the US Supreme Court decision in the Stolt-Nielsen case. In that case the arbitral tribunal made a “Partial Final Clause Construction Award,” finding that class arbitration was not prohibited by the arbitration clause, and in proceedings in the District Court and Second Circuit, no argument was raised that the Award was not eligible for judicial review under the FAA. That argument also was not raised as an objection to the granting of certiorari, but Justice Ginsburg in the dissenting opinion asserted that certiorari had been improvidently granted because the Award was not “ripe” for review. Whereas Justice Ginsburg’s dissent then surveyed the various approaches of lower federal courts to reviewability of non-final awards under the FAA, the question raised by the dissent apparently was one of statutory interpretation: i.e. what non-final dispositions by arbitrators are FAA awards? But Justice Alito for the majority treated the dissent as having questioned “ripeness” in the constitutional sense (i.e. the requirement of a “case or controversy” as a requirement for the exercise of the federal judicial power), and held that in the constitutional sense the matter was “ripe,” based largely on the procedural hardship imposed by the class arbitration process if a court might ultimately hold that the arbitrators lacked power to impose it.  The majority did not answer the statutory definition question. Nevertheless, after Stolt-Nielsen, courts have frequently cited its ” ripeness footnote”  to support the position that interlocutory class arbitration clause construction awards are reviewable under the FAA.

A second category, narrow and not as controversial, covers cases where the parties have stipulated to bifurcation of liability and damages and agreed that a partial award on liability should be made. (E.g. Global Gold Min. LLC v. Caldera Resources, Inc., 2013 WL 1655994 (S.D.N.Y. Apr. 15, 2013)).

The third category embraces what the courts have termed “separate and independent claims.” Stated in simple terms, if the matter resolved by the tribunal could have been a complete arbitration by itself, if the Claimant had elected not to advance the other claims, then a “separate and independent claim” has been resolved and the fact that other claims remain unresolved should not preclude courts from exercising jurisdiction to confirm or annul the partial award.  But this category has spawned definitional difficulties, as the distinction between an “issue” and a “claim” may be drawn liberally or restrictively depending on the court’s perception of the utility of judicial action in relation to the ongoing arbitration proceedings. To take some recent examples:

1) In a dispute over a contract to build a luxury passenger craft, the tribunal in the course of a multi-year arbitration concerning a contract with ongoing performance, issued several partial awards on merits issues. The one presented to the District Court for annulment held that the customer had not established grounds for termination of the contract based on cosmetic defects unrelated to regulations governing seaworthiness and passenger safety, and also had failed to establish that a contractual cap on liquidated damages was unconscionable. The District Court, seeing these as dispositions of issues within the overall claim for breach of contract, held that the separate and independent claim test was not met. (Pearl Sea Cruises LLC v. Irving Shipbuilding, Inc., 2011 WL 577333 (D.Conn. Feb. 9, 2011)).

2) In a dispute over termination of a distribution contract, Claimant obtained an Emergency Arbitrator’s award directing the return of certain records, needed urgently by Claimant to comply with statutory reporting requirements. While the relief was secured from an Emergency Arbitrator under the AAA’s Commercial Arbitration Rules, this appears not to have been an instance of provisional relief, but partial final relief, as the contract specifically called for return of the records upon contract termination, and the only remaining claims were for money damages. The District Court granted confirmation — except for the portion of the Emergency Interim Award that concerned attorneys’ fees and arbitration costs. But here the Court considered that it was no longer sufficient merely to find that there was a separate and independent claim. The Sixth Circuit in two decisions in a class arbitration case, one before and one after Stolt-Nielsen, had applied “ripeness” analysis to the FAA reviewability issue, and the District Court here considered that it was now the law in the Sixth Circuit that a “ripeness” analysis of whether the Court should exercise FAA jurisdiction is required in any FAA confirmation or annulment case involving an award that does not complete the arbitration. (Draeger Safety Diagnostics, Inc. v. New Horizon Interlock, Inc., 2011 WL 653651 (E.D. Mich. Feb. 14, 2011)).

3) In a dispute over termination of a health services contract, Claimant obtained a preliminary injunction from an AAA Emergency Arbitrator requiring continued performance during the pendency of the arbitration — a traditional grant of arbitral interim relief. The District Court held that such provisional relief fell squarely within the “separate and independent claim” exception, as it addressed an issue separate from the ultimate merits of the dispute as to whether the contract should continue to be performed during the arbitration. And while this case emanated from the same federal judicial district as the Draeger case discussed above, this decision — correctly, I believe — did not consider that a “ripeness” approach was required in addition to analysis of whether there was a separate and independent claim. (Blue Cross Blue Shield of Michigan v. Medimpact, 2010 WL 2595340 (E.D. Mich. June 24, 2010).

The last-mentioned case notwithstanding, until recently there has been little coherence to the case law concerning enforceability of an arbitrator’s interim award granting provisional relief that does not finally resolve any aspect of the merits. But in a recent opinion that may gain wide acceptance, a judge of the Southern District of New York held that an interim award granting a Mareva-type freezing order against assets of the Respondent, as security for the sums claimed as damages by the Claimant, was “separable from the merits,” — thus apparently satisfying the “separate and independent claim” exception, although this formulation is not expressly mentioned — and so this arbitral Mareva relief granted under Article 21 of the AAA International Arbitration Rules was entitled to recognition and enforcement under the New York Convention and FAA Chapter Two. (CE International Resources Holdings LLC v. S.A. Minerals Ltd., Index No. 12CV8087 (S.D.N.Y), ECF Docket Document No. 23 (Dec. 10, 2012)).  As if to add an exclamation point to this holding, the same court in the same case entered judgment six weeks later against the non-compliant Respondent for civil contempt, imposing daily-accruing civil fines and a civil commitment order. (CE International Resources Holdings LLC v. S.A. Minerals Ltd., 2013 WL 324061 (S.D.N.Y. Jan. 24, 2013)).

Whereas the enforceability judicially of arbitral interim measures is important to the efficacy of international arbitration, the Court’s focus on separability from the merits is helpful, and deserves to be enshrined at the appellate level in an appropriate case. In many situations where a party seeks interim relief from the tribunal, it is not seeking any portion of the final relief. And the granting of interim relief will not necessarily entail a final adjudication of any claim or even any issue. The earlier nomenclature of “separate and independent claim” does not come from the interim measures context, and if applied too inflexibly courts might insist on “claim” attributes that the applicant for enforcement of arbitral interim relief cannot honestly say are present. A request for security or Mareva relief, for example, entails final resolution of the applicant’s claim that there is a substantial risk of dissipation of assets. But as to the merits of the Claimant’s underlying requests for final relief and theories of recovery, the Tribunal will usually make no decision and only satisfy itself that the Claimant’s claims have some degree of legitimacy. The theme of separability from the merits usefully puts the focus on a special breed of finality: that the tribunal will not, indeed cannot, modify the allowed interim relief at any time prior to the Final Award.

Further, while it is not a principle stated explicitly in the recent S.A. Minerals decision, one can find in the leading Second Circuit case cited therein (Banco de Seguros del Estado v. Mutual Marine Offices, Inc., 344 F.3d 255 (2d Cir. 2003)) what might be termed a “principle of effectiveness” that should inform the statutory construction issue of whether a non-final arbitral decision is an FAA “award.” Unless an arbitrator’s interim award is entitled to confirmation, it lacks effectiveness because the arbitrators cannot harness the police power of the state to secure compliance.  If the powers conferred on the arbitrators by agreement of the parties — notably the power to grant any interim relief the arbitrators are persuaded is necessary — would be substantially eviscerated if interlocutory judicial review is not available, then there may be substantial reason to treat the interlocutory decision as an award under the FAA.

This writer is counsel for the Claimant in the S.A. Minerals case and the underlying arbitration.

Vacatur of Convention Awards in U.S. Courts: Fresh Cases and Fresh Thoughts

Thursday, May 16th, 2013

One of the larger waves crashing on the shores of international arbitration as the result of the Restatement (Third) of the Law of International Arbitration is the position — clearly restating existing law — that the grounds stated in Article V of the New York Convention for refusal of recognition of an award should be the exclusive grounds for U.S. judicial annulment of an award made in the U.S. — notably to the exclusion of the doctrine of manifest disregard of the law, and, for that matter, all of the grounds in FAA Section 10. (This is Section 4-11 of the Restatement, Council Draft No. 3, approved by the American Law Institute on December 23, 2011).

Professor George Bermann in a 2011 article provided the general outline of the argument in favor of applying the Convention grounds for refusal of recognition and enforcement as the exclusive grounds for annulment of a Convention award made in the United States (“Domesticating” the New York Convention: The Impact of the Federal Arbitration Act, 2 J. Disp. Settlement, no. 2, 317-32  (2011)): that the United States in ratifying the Convention elected to treat as awards governed by the Convention those awards made in the United States but involving some substantial relationship with a foreign State, that in Convention terms such awards are “not considered as domestic” and therefore should be considered as “foreign,” or as if they were “foreign”; and therefore annulment proceedings in U.S. Courts with regard to such awards should proceed, analytically, as if they were enforcement proceedings with regard to foreign awards, i.e. exclusively according to the grounds in the Convention for refusal of recognition and enforcement.

Recently, this position seems to have gained some momentum in federal courts in America’s heartland. In March, we had the decision of the U.S. Seventh Circuit Court of Appeals in Johnson Controls, Inc. v. Edman Controls, Inc., 712 F.3d 1021, authored by Circuit Judge Diane Wood (an ALI Council member). Without citing the Restatement but with citation to Professor Bermann’s 2011 article, Judge Wood observed in dictum in Johnson Controls:

Chapters 2 and 3 of the FAA state that a Convention award may be vacated only on the grounds specified in the applicable Convention. … This could be important in some cases, because the Convention grounds for vacatur are slightly different from those in Chapter 1 of the FAA…. It is not clear whether a party may bring an action under Chapter 1 to vacate an award issued by an arbitrator in a U.S. jurisdiction, but governed by the Convention.  If it made any difference to our case, we would need to decide whether the district court erred by allowing this action to proceed under Chapter 1 of the FAA, or if the party who might have been advantaged by analysis under the proper Convention might have waived its arguments.

Johnson Controls was then followed (essentially in haec verba, but once again in dicta) only two weeks ago, in the decision of a federal district judge sitting amidst the corn silos of central Illinois, in Archer-Daniels-Midland Co. v. Paillardon, 2013 WL 1892675 (C.D. Ill. May 3, 2013), in which the Court rejected a motion to vacate a $35 million award that was made against the hometown agricultural giant by a famous arbitrator of Mexican nationality. Said the district court: “Chapter Two of the FAA states that a Convention award may be vacated only on the grounds specified in the New York Convention…. The Seventh Circuit has recognized that it is not clear whether a party may bring an action under Chapter 1 of the FAA to vacate an award issued in a U.S. jurisdiction, but governed by the New York Convention.” The Court then proceeded to find the proffered vacatur grounds insufficient even under FAA Section 10, so that it was not necessary to decide the question raised but not decided in Johnson Controls.

The textual purists among you might say Judge Wood had it wrong, and has inspired error in the lower courts, by daring to state that Chapters Two and Three of the FAA provide standards applicable to vacatur. In fact those Chapters say literally nothing, or nothing literally, about vacatur.  But I will venture the suggestion that Judge Wood very deliberately, and with evident persuasive force,  conflated vacatur and refusal of recognition — under the protective cover of dictum — — in service of advancing the Restatement position.

Let us consider further the basis for the Restatement position, and how the courts might implement it without demanding handstands and cartwheels from the statutory texts.

In the comments under the heading “Policy Considerations,” the Restatement drafters assert that Section 10 of the FAA only applies to domestic arbitration awards, i.e. those that do not involve any foreign element. But this perspective seems to be incomplete.  “Commerce” as described in FAA Section 1 includes commerce with foreign nations. And so Chapter One of the FAA provided a vehicle for the confirmation or vacatur of at least some international arbitration awards before 1970, i.e. those that involved foreign commerce of the United States.  Thus, if in 1965 there had been an international arbitration between a U. S. supplier and a foreign distributor concerning the distribution of U.S.-sourced goods in a foreign nation, Chapter One potentially provided jurisdiction (if the diversity statute was satisfied) for a U.S. court at the seat of the arbitration to confirm the award or to vacate it. The gap in coverage as to vacatur, if any, concerned awards made in the United States that involved commerce between non-U.S. parties over commerce that had no U.S. connection other than the chosen seat of arbitration.  With regard to international arbitration awards made in the United States that involved foreign commerce of the United States, the principal innovation of FAA Chapter Two was to allow agreements and awards to be enforced in the federal courts without an independent basis for subject matter jurisdiction.

As to the category of international arbitrations held at a U.S. seat to which Chapter One grounds for vacatur applied before 1970 — that is, cases involving foreign commerce of the United States —  it does not seem correct to conclude that Chapter Two’s enactment rendered those grounds no longer available. Chapter Two itself is silent about vacatur. And there are evidently no indications in the legislative history of Chapter Two that Congress considered that the Convention Article V grounds for refusal of recognition and enforcement would supplant the Section 10 grounds when vacatur was sought. Since the right to request judicial action to vacate an award continued to reside exclusively in Chapter One, it has until now been reasonable to conclude that Chapter One’s stated grounds for vacatur would apply. That conclusion is also reinforced by the fact that the subject matter jurisdiction created by Chapter Two of the FAA was not stated to be exclusive, i.e., Chapter Two does not preclude a party who could satisfy the diversity of citizenship requirement for federal subject matter jurisdiction from moving for confirmation or vacatur of an award under Chapter One.  Neither did Congress amend Chapter One to provide that when such proceedings involved foreign commerce of the United States, the permitted grounds for vacatur would be the Convention grounds for refusal of recognition and enforcement rather than the grounds in FAA Section 10.

With regard to U.S.-seated international arbitrations that involve only the commerce of foreign nations, not the foreign commerce of the United States, the analysis would seem to be quite different, and the position of the Restatement (or at least the result of that position) seems more compelling.  Parties involved in such U.S.-seated arbitrations have no express federal statutory basis for vacating an award. From a Chapter One perspective, they fail to satisfy the commerce requirement and fail to satisfy diversity of citizenship as a basis for jurisdiction when there are no U.S.-domiciled parties involved. Such parties are not aided by the “residual application” of Chapter One under Section 208 of the FAA. Section 208 provides for application of Chapter One to “actions and proceedings brought under this Chapter” but does not provide that actions and proceedings available only under Chapter One may be brought also under Chapter Two. Chapter Two does not provide for any action or proceeding to vacate an award, and thus there is no Chapter Two action or proceeding to which Section 10’s vacatur standards could, residually, apply. Such a party that initiates a proceeding for vacatur under Chapter Two of the FAA should have the proceeding dismissed under Federal Civil Procedure Rule 12(b)(6), for failure to state a claim upon which relief may be granted.

Where does Article V(1)(e) of the Convention fit into this scenario? (If you have read this far, you were about to ask).  Article V(1)(e) provides that recognition and enforcement may be (shall be) refused if the award has been set aside by a competent authority of the place at which, or under the law of which, the award was made. From the text, it can be inferred that Article V(1)(e) contemplates that the Convention Member State may have, but need not have, a legal regime for the annulment of awards. It is open to the United States, consistent with the Convention, to decline to provide any action or proceeding for the annulment of a certain category of Convention awards. And it is perfectly sensible to conclude that this was the course of action taken by the United States, in the enactment of FAA Chapter Two, with regard to Convention awards made in the United States that do not involve foreign commerce of the United States. Thus, if the arbitration winner, in a case involving only foreign foreign commerce,  seeks confirmation in a federal court at the U.S. seat, the loser may invoke the Convention grounds for refusal of recognition. But if the arbitration loser prevails in having recognition refused, the consequence is only the non-recognition of the award in the United States, and possibly some issue-preclusive effect against the arbitration winner if further confirmation proceedings are commenced in the courts of another State.  But the Award does not cease to exist, because there is no availability of vacatur (annulment) as a remedy under FAA Chapter Two (or Three).

Let us now consider briefly how the leading cases mentioned in the Comments of the Restatement would fare under this standard. Stolt-Nielsen involved foreign commerce of the United States, so consideration of vacatur according to Section 10 standards was appropriate. The same is true of Toys R Us v. Yusuf Alghanim in the Second Circuit and the Ario case in the Third Circuit. The Eleventh Circuit’s decision in Industrial Risk Insurers is wrongly decided, because the Court embraced a false dichotomy between Chapter One as governing “domestic arbitral proceedings” and Chapter Two as governing “international arbitral proceedings.” That shorthand gave short shrift to the U.S. foreign commerce dimension of Chapter One. Thus none of the leading cases is a correct outcome under existing law that would require a change of position under the approach proposed here. (The Eleventh Circuit will need to mend its error in a proper case).

From a policy perspective, this approach accomplishes some of what the Restatement drafters aspire to achieve. For foreign parties with foreign disputes (what I have called “foreign foreign commerce”) who have chosen the U.S. as a seat of arbitration only for its perceived advantages as a juridical seat, their hopes and expectations of being in a New York Convention jurisdiction without an overlay of idiosyncratic domestic arbitration law will be nourished. And this can be done without asking courts to stretch statutory language or legislative history to accomplish the policy goals of arbitration scholars (the Restatement drafters) and blogosphere pundits (your author).  For those who select a U.S. seat but are involved in foreign commerce of the United States, Chapter 1 vacatur remains possible if there is a basis for federal subject matter jurisdiction other than the Convention.  The jurisdiction requirement will eliminate a certain number of cases —  the motion to vacate an award in a contract dispute between Canadian and Mexican joint venture partners over a land development in the U.S. would satisfy the commerce requirement of Chapter One, but statutory diversity of citizenship would be lacking.  The motion to vacate in that case would be dismissed under Chapter One for lack of jurisdiction and under Chapter Two/Three for failure to state a claim.   This would leave the Restatement’s mission unachieved as to the category of cases that satisfy Chapter One in regard to both the commerce requirement and subject matter jurisdiction, because vacatur in such cases would remain proper under FAA Section 10 standards rather than New York Convention Article V standards.  But if the “problem” can be re-defined this narrowly, then perhaps legislative reform would be possible. Or perhaps the residual “problem” would be perceived — especially in light of the rarity of actual vacatur judgments for manifest disregard or exceeding powers in international arbitrations — as one that is no longer sufficiently widespread to justify the attention that is has recently attracted.

Section 1782 and The Tribunal’s Control of the Procedure: Some Recent Experience

Sunday, May 12th, 2013

Sometimes obscured in the conversation over whether Section 1782 of the U.S. Judiciary Law even applies to private international commercial arbitration is the question of whether such judicially-enabled discovery offends core values of international arbitration —  intruding upon the arbitrators’ control over the proceedings, and tilting an initially level evidence-gathering playing field in favor of the party that benefits most from evidence located in the United States.

A successful ex parte Section 1782 application before a New Jersey U.S. District Court in November 2012 provides a useful point of entry to examine this question. (In re Mesa Power Group, LLC, 2012 WL 6060941 (D.N.J. Nov. 20, 2012). See also, in the same court regarding the same arbitration but a different non-party witness, In re Mesa Power Group, LLC, 2013 WL 1890222  (D.N.J. April 19, 2013). The latter opinion is too recent to have attracted published responsive comment from the Arbitral Tribunal). The order was made in relation to a nascent NAFTA Chapter 11 arbitration between a U.S. investor and the Government of Canada — the latter defending alleged NAFTA violations by the Province of Ontario. Whereas the pleadings, submissions, and procedural orders in the NAFTA are) publicly-available (e.g.,, we who enjoy these sporting events as spectators when not players or referees have rather choice seats from which to consider the 1782 case in its precise arbitral procedural context.

Claimant’s business is generating electric power from wind farms, and it maintained such facilities in Ontario. One of its competitors, a Samsung company, signed a major supply contract with Ontario, and as an element of the deal was granted transmission capacity on Ontario’s power grid.  Ontario declined to buy electricity from Claimant, which then filed a Notice of Arbitration claiming inter alia breach of the duty to provide fair and equitable treatment. The damages are alleged to exceed $775 million USD.

Claimant obtained Section 1782 discovery orders from the New Jersey federal court on an ex parte basis, as Section 1782 allows. (In fairness to the federal judge involved and a balanced presentation, the decision was without prejudice to being revisited in the context of a motion to quash the subpoena). Neither Samsung nor Canada had notice of the application. And since no arbitral tribunal had been formed at the time of the application, there was initially no tribunal to notify. And it is inferrable from a recent procedural order in the arbitration that the Tribunal, after it was constituted in June 2012, did not learn of the application until some time after the Court entered its order granting relief in November.

The district court purported to apply faithfully the “discretionary factors” enumerated by the Supreme Court in the Intel case. And when it came to applying the factor of whether the arbitration process would be advanced by granting 1782 discovery, the Court’s position was that there was no evidence or argument before the Court that the discovery would not advance the arbitration. Of course, since the matter was before the Court ex parte, there was no representation in the proceedings for the view that perhaps the discovery would detract from the NAFTA arbitration proceedings more than it might enhance them.

One might suppose that the Government of Canada, had it had notice of the application, might have informed the Court:

(1) That proceeding ex parte was not justified as the documents sought from Samsung were mainly communications with Ontario that were in Ontario’s possession, and were not at risk for destruction or concealment.

(2) That production of documents exchanged between Samsung and Ontario should proceed under control of the Tribunal.

(3) That internal documents of Samsung, i.e. those not exchanged with Ontario, were sufficiently less likely to have probative value that the Tribunal’s views should be heard by the Court before granting the discovery.

(4) That the seat of the arbitration had not yet been determined, leaving two potentially important questions: Would the seat be in the U.S. such that the Tribunal might issue its own subpoena? And is a tribunal seated in the U.S. an “international tribunal” under Section 1782 notwithstanding, because constituted under authority of the NAFTA and the UNCITRAL Rules of Arbitration?

The views of this Tribunal in regard to the actual and potential use of Section 1782 might usefully be considered by U.S. courts in future cases, when they are asked to use a crystal ball to divine the attitude of an absent, silent, distant, and perhaps not-yet-constituted, arbitral tribunal:

1) Among the reasons expressed by the Tribunal in its February 26, 2013 Procedural Order in Mesa v. Canada for preferring a U.S. seat of arbitration was the power of a U.S.-seated Tribunal to subpoena evidence under FAA Section 7. While the Tribunal in this context did not directly address the relative merit of using Section 1782 to gather evidence for use in an arbitration seated outside the U.S., it is inferrable that the Tribunal considered that FAA Section 7 provides the Tribunal with more control over the gathering and use of evidence.

2) The Tribunal in opting for a seat in Miami rather than New York referred to Second Circuit case law that could be read to prohibit a New York-seated Tribunal from issuing enforceable subpoenas for witnesses beyond the subpoena power of a federal district court in New York. (Dynegy Midstream Services v. Trammochem, 451 F.3d 89 (2d Cir. 2006)). The Eleventh Circuit having as yet not imposed such a territorial limitation nor excluded the possibility that a Tribunal’s FAA subpoena power is a function of its physical not its juridical seat, Miami (amidst its other attractions) held out the greater possibility for the Tribunal to subpoena evidence from sources in Texas and California.

3) While rejecting Canada’s request for wholesale exclusion of documents gathered through the Section 1782 applications by Claimant, the Tribunal did direct that “further efforts by the Claimant to obtain evidence on Section 1782 be pursued exclusively under the supervision of the Tribunal,”  and, specifically, ordered periodic reporting on the status of ongoing 1782 proceedings and that the parties obtain authorization in advance from the Tribunal for any new 1782 application.

Imagine also how a federal district judge might react, when challenged to anticipate the views of the Tribunal, if she were told that in the Caratube v Kazakhstan case (Procedural Order No. 3, May 26, 2010, found at ) the Tribunal had remarked that “the Tribunal might have been minded to find that its prior consent should have been sought by Claimant before the presentation of it Section 1782 petition,” and that “the existence of such a petition to domestic courts cannot interfere with the Tribunal’s maintenance of its authority over the arbitral procedure…” Judges in future cases might well respond as did the U.S. District Court judge in Washington D.C. who denied Caratube’s Section 1782 petition a few months later (opinion also found at, finding among other things that granting the petition in an ICSID arbitration, a process selected by Claimant as one of the dispute resolution options under the U.S.-Kazakhstan BIT, would undermine the parties’ bargained-for expectations about the Tribunal’s involvement in evidence-gathering. And the Court also cited Rule 3.8 of the IBA Rules of Evidence, which Rules Claimant itself had proposed that the Tribunal adopt as guidelines in the proceedings, and which Rule 3.8 specifically directs that third-party evidence Ggathering is a matter for the Tribunal to decide and to implement.

Given the evident differences in outcome and judicial attitude between the ruling on an ex parte application in Mesa v. Canada, and the better-informed position of the Court in Caratube v. Kazakhstan, it is predictable that more Claimants seeking the benefits of Section 1782 will try to do so ex parte whenever possible and also as early in the arbitration process as possible including before any proceedings are filed. The organized arbitration bar might make a constructive contribution by developing a checklist of questions which U.S. District Court judges might pose to applicants:

• What extreme circumstances justify ex parte relief?

• Has the Request for Arbitration been filed?

• Has the Tribunal been constituted?

• Have the parties agreed that the Tribunal shall refer, for guidance, to the IBA Rules of Evidence?

• Has a procedural timetable been fixed?

• Has the seat of arbitration been selected, and if not, does it remain possible that a U.S. seat will be selected?

• Is the information sought mainly not available from the parties to the arbitration, and as to such information what is its probative value?

• Have members of the Tribunal and especially the presiding arbitrator issued prior decisions or written commentaries on the relative roles of arbitral tribunals and domestic courts in the evidence-gathering process?

• Has the administering institution agreed upon by the parties, if any, adopted a position concerning Section 1782 applications?

Armed with such questions, federal judges stand to be better equipped to make the discretionary analysis called for by the Supreme Court in Intel, and to exercise such discretion with an informed sensitivity to many aspects of the arbitral process that the Claimant in pursuit of evidence would not necessarily illuminate.