The case of the day is Abdul Latif Jameel Transportation Co. v. FedEx Corp. (6th Cir. 2019). The case is a big deal in the world of § 1782. One of the great open questions is whether a private international arbitral tribunal is a “tribunal” for purposes of the statute. There were some old cases that said “no,” but then came Intel, in which the Supreme Court adopted a functional test for deciding what is an is not a tribunal. People speculated that in light if Intel courts would begin to say that private arbitral tribunals were tribunals for purposes of the statute, but to date, that hasn’t happened at the appellate level. Today’s decision is the first decision of a circuit court, post-Intel that reaches what I think is the right result on this question.
FedEx and ALJ had a contract under which ALJ was FedEx’s “delivery-services partner” in Saudi Arabia. The agreement called for arbitration of disputes in Dubai under the rules of the Dubai International Financial Centre-London Court of International Arbitration. Taey then entered into a second contract, under which FedEx was to provide ALJ with “support services,” and disputes were to be arbitrated in Saudi Arabia. In between the two companies, FedEx acquired TNT, a competitor of ALJ in Saudi Arabia. A dispute arose when ALJ claimed that it was tricked into entering the relationship and that FedEx wrongly failed to renew the first contract. ALJ commenced an arbitration in Saudi Arabia, and FedEx commenced an arbitration in Dubai. Before the hearing in Dubai, the Saudi tribunal issued an award dismissing ALJ’s claims.
ALJ brought an application under § 1782 in the Western District of Tennessee, seeking documents and a deposition from FedEx Corp., which was not a party to the contracts (FedEx International was the party) for use in both arbitrations. The district court denied the motion on the grounds that neither tribunal was a “foreign or international tribunal” within the meaning of the statute. ALJ appealed.
Much of the court’s discussion is taken up with dictionary definitions of the word “tribunal” and the like, and about that part of the decision I will say no more.
The court went on more usefully to discuss Intel in depth. It began by noting the Intel court’s observation that the 1964 amendment to the statute replaced the phrase “judicial proceeding pending in any court in a foreign country” with “in a proceeding in a foreign or international tribunal,” which is helpful though not dispositive. The court also noted Intel’s reliance on the views of Hans Smit, the drafter, who understood the statute to reach private arbitration.
An arbitral tribunal is obviously adjudicatory in the way the Intel court thought important. The Sixth Circuit therefore rejected, probably too easily, FedEx’s argument that the statute reaches only public international arbitral tribunals, e.g., tribunals in investment treaty arbitrations. It seems pretty clear that those tribunals, which adjudicate public international law disputes, are international tribunals within the meaning of the statute, but the Sixth Circuit focused only on the word “tribunal” and not on the requirement that the tribunal be a foreign or interntional tribunal. The court wrote: “FedEx Corp. does not provide any examples of ‘state-sponsored’ arbitral bodies that would fit its reading of the statute.” Hmm. Isn’t it clear that every investment treaty tribunal fits the bill, even if such tribunals are ad hoc and not administered by an “arbitral body”? And isn’t it clear that standing international tribunals such as the International Criminal Court and the International Tribunal for the Law of the Sea would qualify (as they are created by treaties), even if the United States is not a party to the treaties? I haven’t read the briefs, so I don’t really know what the court was getting at here, but it seems there are plenty of examples of state-created arbitral tribunals, and if I have a business dispute with someone in France and we choose three businesspeople sitting in Germany to arbitrate the dispute, it seems to me there are some grounds to say that the tribunal we have constituted might not be “foreign” or “international.” The argument deserved a little more attention, though I think the outcome was correct in light of Congress’s intent in making the 1964 amendment.
This case has to be on the “cert. watch” list, especially as a similar case is now before the Second Circuit, one of the circuits that has pre-Intel precedent holding that a private arbitral tribunal doesn’t qualify. My best guess, in light of recent trends in the Second Circuit’s 1782 cases, is that the court adheres to its precedent, setting up a juicy circuit split. Stay tuned!