Case of the Day: In re Application of Grupo Unidos Por El Canal

The case of the day is In re Application of Grupo Unidos Por El Canal, S.A. (D. Colo. 2015). The Autoridad del Canal de Panama, the agency in charge of the Panama Canal, is in the course of an expansion of the canal to include a third set of locks. Grupo Unidos Por El Canal, one of the contractors engaged on the project, claims that ACP breached its contract with GUPC “by concealing and withholding critical information regarding the true nature of the existing conditions at the Project and the status of other aspects of the Panama Canal expansion.” GUPC demanded arbitration. As provided in the parties’ contract, the arbitration was held in Miami under the ICC Rules. The parties agreed that the arbitration was governed by the FAA, and they agreed that discovery in the arbitration was governed by the IBA Rules on the Taking of Evidence in International Commercial Arbitration.

GUPC brought a § 1782 application to seek evidence from CH2M Hill-US, a US firm. The judge faced two preliminary questions: was this private arbitration a proceeding within the scope of the statute? and was the arbitration, which had its seat in Miami, an international proceeding within the scope of the statute?

We’ve previously noted the uncertainty about whether a private arbitration is within the scope of the statute. The judge, finding no post-Intel precedent in the Tenth Circuit, held that a private arbitration is not within the scope of the statute. Her reasoning was a little conclusory, but she did argue, correctly in my view, that whatever else Intel did, it didn’t require the lower courts to hold that private arbitrations are within the scope of the statute.

Because the judge held that the statute did not apply to private arbitrations, there was no need to reach the question whether an international arbitral tribunal with a seat in the United States is an international tribunal for purposes of § 1782. This is a shame, since it’s an interesting question. Certainly there is no need to hold that such tribunals are international, because under Section 7 of the FAA, the arbitrators had the power to issue subpoenas.

Although there was no need to reach the Intel factors in light of her decision on private arbitration, the judge noted that under the IBA Rules the prior approval of the tribunal was necessary before undertaking discovery. So the judge reasoned, correctly I think, that the tribunal might not be receptive to the evidence (as it had not given prior approval for the § 1782 application).

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