Transnational Litigation

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On December 10, 2021, the U.S. Supreme Court granted certiorari in two cases to determine whether district courts can compel discovery proceedings in private foreign arbitrations. The two consolidated cases are ZF Automotive US, Inc., et al. v. Luxshare, Ltd. and AlixPartners, LLP, et al. v. The Fund for Protection of Investors’ Rights in Foreign States.
Continue Reading Supreme Court Set To Resolve Circuit Split Concerning Foreign Arbitration Discovery Rules

On August 12, 2021, the Ninth Circuit Court of Appeals decided whether Washington state law reverse-preempts the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”), in which case the state law would bar the enforcement of arbitration clauses in insurance contracts in states with similar anti-arbitration laws. CLMS Management Services LP et al. v. Amwins Brokerage of Georgia LLC et al., –F.4th—, 2021 WL 3557591 (9th Cir. 2021).  While the Ninth Circuit agreed with the defendants that state law does not reverse-preempt the Convention, plaintiffs have indicated that they will seek review in the U.S. Supreme Court.  Plaintiffs point to a circuit split, since the Second Circuit has previously held that an anti-arbitration provision in Kentucky insurance law trumps the New York Convention.  If plaintiffs follow through with their intended petition for certiorari, and if the High Court grants review, the Court’s decision should provide insurance companies clearer guidance with respect to the arbitration clauses in their non-domestic policies, as companies should be able to determine whether they can invoke international arbitration in states that bar arbitration clauses in insurance contracts.
Continue Reading Supreme Court May Be Asked to Decide Whether State Insurance Laws Reverse-Preempt the New York Convention

On March 22, 2021, the U.S. Supreme Court granted certiorari in the case brought by Servotronics Inc., where it challenged the Seventh Circuit’s decision to reject discovery pursuant to 28 U.S.C. § 1782 for use in a private arbitration brought by Rolls-Royce PLC in London.  The Supreme Court’s decision should resolve the current circuit split on the question of whether Section 1782 can be used for private international arbitration, which has been an ongoing topic of interest among international arbitration practitioners and scholars.
Continue Reading SCOTUS Finally Agrees to Address Discovery for Use in Foreign Arbitration

As discussed in our previous blog, many foreign companies favor private international arbitration for dispute resolution purposes in order to avoid being haled into a U.S. court and to avoid U.S.-style discovery.  That calculus may change if the Supreme Court decides to consider whether a district court has authority to order discovery under 28 U.S.C. § 1782 for use in private commercial arbitration, which would resolve the current split amongst Circuit Courts.
Continue Reading Rolls-Royce Seeks to Resolve Circuit Split on Whether District Courts Can Order Discovery For Use in Private Arbitration

In order to minimize the risk of litigation arising from investments in the United States, sovereign wealth funds (“SWFs”) should take care to avoid inadvertent or unnecessary waiver of sovereign immunity–before they establish operational or investment management presence in the United States.

SWFs generally benefit from sovereign immunity in the United States under the Foreign Sovereign Immunities Act (“FSIA”). As an agency or instrumentality of foreign state, they are generally entitled to immunity from the jurisdiction of the U.S. courts. However, an SWF may lose or limit its sovereign immunity where the SWF: (1) is involved in “commercial activities” in or affecting the United States; or (2) waives sovereign immunity, either expressly or by implication.
Continue Reading Sovereign Wealth Funds – Preserving Sovereign Immunity

As discussed in a previous blog post, an interested party in a foreign or international proceeding may apply to a United States District Court for discovery from an individual or corporation who resides or is found in the district. This blog describes the procedural steps for pursuing or responding to discovery requests under 28 U.S.C. § 1782. The operative language of section 1782(a) provides:

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.
Continue Reading Pursuing and Responding to Discovery Requests Under 28 U.S.C. § 1782

The International Organizations Immunities Act of 1945  (“IOIA”) grants international organizations such as the World Bank and the World Health Organization the “same immunity from suit and every form or judicial process as is enjoyed by foreign governments.”  However, at the time the IOIA was enacted, foreign governments enjoyed virtually absolute immunity from suit, while that immunity is more limited today.  So, what is the meaning of “is” in the IOIA?  Does IOIA grant international organizations the virtually absolute immunity that foreign governments enjoyed when the IOIA was enacted, or the more restricted immunity they enjoy today?  
Continue Reading The US Supreme Court Finds that International Organizations’ Immunity Is On Par With That of Foreign Governments

Fearing the burdens of U.S. court litigation, many foreign companies doing business with American counter-parties insist on forum selection clauses that call for resolution of disputes outside of U.S. courts, either in foreign courts or international arbitration. High on the list of objectives may be avoiding U.S.-style discovery, which can justifiably strike fear into the hearts of non-U.S. companies. However, before congratulating themselves too heartily, such companies should consider the often overlooked provisions of a U.S. statute that authorizes U.S. courts to order discovery for use in certain foreign legal proceedings.
Continue Reading US Law Allows Discovery for Foreign Proceedings

A recent California case may force companies doing business with foreign entities to reconsider—and maybe rewrite—their contracts. In Rockefeller Tech. Invs. (Asia) VII v. Changzhou Sinotype Tech. Co., No. B272170, 2018 WL 2455092 (Cal. App. June 1, 2018), the California Court of Appeal held that parties may not contract around the formal service requirements of the Convention on the Service Abroad of Judicial and Extrajudicial Documents, commonly referred to as the Hague Service Convention. The decision could have profound implications for international business.
Continue Reading Contracts with Foreign Companies May Require a Rewrite