Discovery
| Pages | 34-38 |
34 Volume 21, January–March 2015 international law update
© 2015 International Law Group, LLC. All rights reserved. ISSN 1089-5450, ISSN 1943-1287 (on-line) | www.internationallawupdate.com
DISCOVERY
In dispute over foreign shipping
contract where one party filed for
discovery in Florida under 28 U.S.C.
Section 1782, Eleventh Circuit affirms
that discovery may proceed because the
lawsuits contemplated in Ecuador were
“within reasonable contemplation”
Consorcio Ecuatoriano de Telecomunicaciones.
(“CONECEL”) and Jet Air Services Equador
(“JASE”) were parties to a long-term contract
involving the provision of logistics services by JASE
to CONECEL for the international shipment
of mobile phones and accessories. In 2008, the
relationship fractured and CONECEL asserted
that it had been overbilled by JASE by millions of
dollars, through collusion between JASE and two
of CONECEL’s former employees. JASE denied
the allegations, and asserted that CONECEL had,
in fact, missed several payments under the contract.
JASE thereafter initiated arbitration proceedings in
Ecuador in accordance with an arbitration clause in
the logistics services contract.
CONECEL subsequently led an ex parte
application for relief in the United States District
Court for the Southern District of Florida, requesting
that the court grant it leave to issue a subpoena on
JAS USA – a US aliate of JASE which CONECEL
maintained was involved in the processing of the
allegedly inated bills – seeking evidence pertaining
to invoice generating and calculation. In addition to
use in the private Ecuadorian arbitration initiated
by JASE, CONECEL also submitted that it
needed the evidence for civil and criminal collusion
proceedings it planned to initiate against JASE and
the former CONECEL employees in the Ecuadorian
commercial courts. CONECEL maintained that it
required this evidence before ling the contemplated
collusion actions because the courts in Ecuador
mandate that all evidence in support of such
proceedings be led with the initial pleadings. e
statute upon which CONECEL relied in making
its ex parte application was 28 U.S.C. §1782. at
statute states in the relevant part:
“e 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. e
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.... To the extent that
the order does not prescribe otherwise, the
testimony or statement shall be taken, and
the document or other thing proper *1267
in accordance with the Federal Rules of
Civil Procedure. 28 U.S.C. § 1782(a).”
e district court granted the ex parte
application and authorized CONECEL to serve
the subpoena upon JAS USA. JASE then sought
to intervene in the proceedings to quash the
subpoena on the grounds, among others, that (1)
the Ecuadorian judicial proceedings had not been
commenced and, therefore, the application was
not ripe, and that (2) a private foreign arbitration
was not a “foreign or international tribunal”
within the meaning of §1782. e court permitted
JASE to intervene but denied its application to
quash, nding against JASE on both issues. JASE
subsequently appealed to the Eleventh Circuit.
e U.S. Court of Appeals for the Eleventh
Circuit arms the District Court’s decision.
e key issue here is whether the foreign private
arbitration panels are the “foreign or international
tribunals” contemplated by 28 U.S.C. § 1782(a).
In a de novo review the Court rst turned to
the language of §1782 itself and noted that it had
four requirements that must be met before a district
court has the authority to accede to a request made
pursuant to the statute:
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