Revised March 19, 1999

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 98-21072

Summary Calendar

APPLICATION OF THE REPUBLIC OF KAZAKHSTAN,

Petitioner-Appellee,

v.

BIEDERMANN INTERNATIONAL,

Claimant-Appellant,

Appeal from the United States District Court for the

Southern District of Texas

March 17, 1999

Before HIGGINBOTHAM, JONES, and BARKSDALE, Circuit Judges:

EDITH H. JONES, Circuit Judge:

In support of a proce eding before the Arbitration

Institut e of the Stockholm Chamber of Commerce, the Republic of

Kazakhstan (“Kazakhstan”) instituted the underlying action in the

Southern District of Texas for assistance in discovery pursuant to

28 U.S.C. § 1782. Kazakhstan requested that the district court

order Murdock Baker, Jr., not a party to the arbitration, to submit

to a deposition and produce certai n documents related to

Kazakhstan’s opponent Biedermann International (“Biedermann”). The

district court ordere d the requested discovery and denied1 See 28 U.S.C. § 1291; Okubo v. Reynolds (In re Lett ers

Rogatory from the Tokyo Dist. Prosecutor’s Office) , 16 F.3d 1016,

1018 n.1 (9th Cir. 1994).

2 Biedermann’s request for reconsideration and motion for emergency

stay. On expedited appeal of the district court’s final order, 1

this court stayed the discovery. Having reviewed the parties’

submissions and examined the language and history of § 1782, we

elect to follow the Second Circuit’s recent decision that § 1782

does not apply to private international arbitrations. S ee National

Broad. Co. v. Bear Stearns & Co. , ___ F.3d ___, No. 98–7469, 1999

WL 27053. (2d Cir. Jan. 26, 1999).

Review of the scope of § 1782 is de novo

. S ee Pritchard

v. U.S. Trustee (In re England)

, 153 F.3d 232, 234 (5th Cir. 1998).

When interpreting a statute, this court examines the plain, common

sense meaning of the statute’s language. See id. at 235 (“Courts

properly assume, absent sufficient indication to the contrary, that

Congress intends the words in its enactments to carry their

ordinary, contemporary, common meaning.”) (internal punctuation and

citations omitted). If this language is unambiguous, the inquiry

is ended. See United States v. Investment Enters., Inc. , 10 F.3d

263, 274 (5th Cir. 1994) (“Except in rare circumstances, judicial

inquiry is complete when the terms of a statute are unambiguous.”).

As the Second Circuit observed, however, the meaning of “foreign or

international tribunal” is ambiguous and must be construed in light

of the background and purpose of the statute.2 Act of May 24, 1949, ch. 139, § 93, 63 Stat. 89, 103 (1949);

see also Act of June 25, 1948, ch. 646, § 1782, 62 Stat. 869, 949

(1948) (“any civil action pending in any court in a foreign

country”); Act of March 3, 1863, ch. 95, § 1, 12 S tat. 769, 769

(1863) (“in any suit for the recovery of money or property

. . . in

any foreign court

. . . in which a government of such foreign

country shall be a party”); Act of March 2, 1855, ch. 140, § 2, 10

Stat. 630, 630 (1855) (“from any court of a foreign country”). For

an extensive discussion of § 1782’s legislative history, see

National Broad. Co.

, 1999 WL 27053, at *4-6, and In re:

Application of Nat’l Broad. Co.

, No. M-77 (RWS), 1998 WL 19994, at

*4-7 (S.D.N.Y. Jan. 21, 1998).

3

From its adoption in 1855 through its amendment in 1964,

§ 1782 permitted a district court to provide discovery assistance

only to a party involved in judicial proceedings pending before a

“court in a foreign country.” 2 In 1964, Congress amended the

statute. Section 1782 now reads, in pertinent part:

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 us e in a

proceeding in a foreign or international

tribunal

. The order may be made . . . upon

the application of any interested person

. . .

.

28 U.S.C. § 1782 (emphasis added). The decision to substitute the

term “tribunal” for “court” was deliberate, evidencing Congress’s

in tention to expand the discovery provision beyond “conventional

courts” to include “foreign administrative and quasi-judicial

agenc[ies].” See S. Rep. No. 1580, § 9 (1963), reprinted in 1964

U.S.C.C.A.N. 3782, 3788.

But the new version of § 1782 was drafted to meld its

predecessor with other statutes which facilitated discove ry for3 Section 1782’s amendment in 196 4 arose from recommendations

of the Commission and Advisory Committee on International Rules of

Judicial Procedure. S ee Act of Sept. 2, 1958, Pub. L. No. 85-906,

72 Stat. 1743, 1743-45 (1958); see also National Broad. Co. , 1999

WL 27053, at *4.

4 Professor Hans Smit directed the Commission’s work.

Followi ng Congress’s 1964 amendment of § 1782, Smit noted the

expansion of the statute to include, inter alia

, “interna tional

arbitral tribunals.” S ee Hans Smit, International Litigation Under

the United States Code , 65 Colum. L. Rev. 1015, 1027 n.73 (1965);

see also id. at 1026 n.71 (“ ‘tribunal’ embraces all bodies

exercising adjudicatory powers, and includes . . . administrative

and arbitral tribunals”). S ee

, also Hans Smit and Arthur R.

Miller, International Co-Operation in Civil Litigation

-- A Report

on the Practices and Procedures Prevailing in the United States

(1961).

5 Subsequent articles by Professor Smit, however, champion the

majority view of commentators that private commercial arbitrations

are within § 1782. See

, e .g.

, Hans Smit, American Assistance to

Litigation in Foreign and International Tribunals: Section 1782 of

Title 28 of the U.S.C. Revisited

, 25 Syracuse J. Int’l L. & Com. 1,

5-8 ( 1998) (discussing application of § 1782 to private

arbi trations and criticizing I n re Application of Medway Power

Ltd.

, 985 F. Supp. 402 (S.D .N.Y. 1997), and I n re: Nat’l Broad.

Co. ); Jonathan C lark Green, A re International Institutions Doing

Their Job? , 90 Am. Soc’y Int’l L. Proc. 62, 70-71 (1996) (“it is

hard to think of an international tribunal other than a court or an

arbitration panel”); Walter B. Stahr, Discovery Under 28 U.S.C. §

4 international government-sanctioned tribunals. S ee

, e.g.

, National

Broad. Co.

, 1999 WL 27053, at *5-*6 (discussing combination of

§ 1782 with 22 U.S.C. §§ 270-270g). Neither the report of the

Commission that recommended what became the 1964 version of § 1782 3

nor conte mporaneous reports of the Commission’s director 4 ever

specifically goes beyond these types of proceedings t o discuss

private commercial arbitrations. There is no contemporaneous

evidence that Congress contemplated extending § 1782 to the thennovel arena of international commercial arbitration. 5 References1782 for Foreign and International Proceedings

, 30 Va. J. Int’l L.

597, 619-20 (1990) (“It is clear

. . . that the term ‘international

tribunal’ includes an international court, arbitration or other

tribunal located in a foreign country.”); Peter F. Schlosser,

Coordinated Transnational Interaction in Civil Litigation and

Arbitration , 12 Mich. J. Int’l L. 150, 170 n.84 (1990) (scope of

“tribunal” should include international arbitrations).

6 See

, e.g.

, 16 U.S.C. § 973n (“In the event of a dispute

requiring the establishment of an arbitral tribunal . . . .”); 22

U.S.C. § 290k-11(a) (“An award of an arbitral tribunal resolving a

dispute

. . . .”); 22 U.S.C. § 1650a (“An award of an arbitral

tribunal rendered pursuant to chapter IV . . . .”).

5 in the United States Code to “arbitral tribunals” almost uniformly

concern an adjunct of a foreign gover nment or international

agency. 6

Moreover, the term “tribunal” lacks precision and demands

judicial interpretation consistent with the statute’s purpose.

“Tribunal” has been held not to include even certain types of factfinding proceed ings, like those enforcing tax assessment and

currency exchange regulations, conducted under the auspices of

foreign governm ents. S ee

, e.g.

, Fonseca v. Blumenthal

, 620 F.2d

322, 323 (2d Cir. 1980) (Superintendent of Exchange Control of

Colombia); In re Letters Rogatory Issued by Dir. of Inspection of

Gov’t of India

, 385 F.2d 1017, 1020-22 (2d Cir. 1967) (Indian

income tax officer) (Friendly, J.); see also Okubo

, 16 F.3d at

1018-19 (Tokyo District Prosecuto r’s Office not “tribunal”). To

the extent that these cases distinguished between an impartial

adjudicat ive proceeding, the type covered by § 1782, and the

inquiry of an o fficer with “an institutional interest in a7 Fonseca

, 620 F.2d at 324 (quoting In re Letters Rogatory

, 385

F.2d at 1020).

8 See

, e.g.

, National Broad. Co.

, 1999 WL 27053, at *2-*3 (“The

methods for obtaining evidence under [9 U.S.C.] § 7 are more

limited than those under [28 U.S.C.] § 1782 in two, and possibly

three, ways.”); Medway Power Ltd. , 985 F. Supp. at 404-05.

6 particula r result", 7 one might infer that private international

arbitrations ought to be covered. The opinions, however, also

demonstrate inheren t limits on the nature of a “tribunal”; thus,

not every conceivable fact-finding or adjudicative body is covered,

even when the body operates under the imprimatur of a foreign

government.

Skepticism about extending § 1782 to private

international arb itrations also results from a comparison with

domestic United States arbitration procedure. As other courts have

noted, 8 domestically constituted arbitration panels, but not any

“interested party,” can invoke federal court jurisdiction to compel

discovery in limited circumstances. Further, federal courts have

a duty to enforce arbitrators’ summonses only within th e federal

district in which the arbitrators, or a majority of them, are

sitting. See 9 U.S.C. § 7. It is not likely that Congress would

have chosen to authorize federal courts to assure broader discovery

in aid of foreign private arbitration than is afforded its domestic

dispute-resolution counterpart. There is also a possibility that

Federal Arbitration Act § 7 and 28 U.S.C. § 1782 conflict, if the

latter section encompasses foreign and international private9 See U.N. Commission on International Trade Law, Model Law on

International Commercial Arbitration, art. 19 (1994). Article 19

7 arbitrations. Section 7 is a “residual” provision, to the extent

not inconsistent with the Convention on the Recognition and

Enforcement of Foreign Arbitral Awards, 9 U.S.C. § 201, 208, and

the Inter-American Convention on International Commercial

Arbitration, 9 U.S.C. §§ 301, 307. The Second Circuit aptly noted

that the differences in avail able discovery could “create an

entirely new ca tegory of disputes concerning the appointment of

arbitrators and the characterization of arbitration disput es as

domestic, foreign, or international.” See National Broad. Co.

,

1999 WL 27053, at *5.

Empowering arbitrators or, worse, the parties, in private

interna tional disputes to seek ancillary discovery through the

federal courts does not benefit the arbitration process.

Arbitration is intended as a spee dy, economical, and effective

means of dispute resolution. The course of the litigation before

us suggests that arbitration’s principal advantages may be

destroyed if the parties succumb to fighting over burdensome

discovery requests far from the place of arbitration. Moreover, as

a creature of contract, bot h the substance and procedure for

arbitration can be agreed upo n in advance. The parties may prearrange discove ry mechanisms directly or by selecting an

established forum or body of governing principles in which the

convention s of discovery are settled. 9 Resort to § 1782 in theprovides the parties with wide discretion to develop the procedures

to be employed in an arbitral proceeding:

Subject to the provisions of this Law, the parties are free to

agree on the procedure to be followed by the arbitral tribunal

in conducting the proceedings. * * * Failing such agreement,

the arbitral tribunal may, subject to the provisions of this

Law, conduct the arbit ration in such manner as it considers

appropriate. The power conferred upon the arbitral tribunal

includes the power to determine the admissibility, relevance,

materiality and weight of any evidence.

See id. ; see also American Arbitr ation Ass’n, Commercial

Arbitration R. § 31 (1996) (“The parties may offer such evidence as

is relevant and material to the dispute and shall produce such

evidence as the arbitrator may deem necessary to an understanding

and determination of the dispute. An arbitrator or other person

authorized by law to subpoena witnesses or documents may do so upon

the request of any party or independently.”).

10 See National Broad. Co. , 1999 WL 27053, at *6 (“If the

parties to a private intern ational arbitration make no provision

for some degree of consensual discovery inter se in their agreement

to arbitrate, the arbitrators control discovery, and neither party

is deprived of its bargained-for efficient process by the other

party’s tactical use of discovery devices”).

8 teeth of such agreements suggests a party’s attempt to manipulate

United States court processes for tactica l advantage. 1 0 Section

1782 need not be construed to demand a result that thwarts private

international arbitration’s greatest benefits.

For the foregoing reaso ns, we conclude that the term

“foreign and international tribunals” in § 1782 was not intended to

a uthorize resort to United States federal courts to assis t

discovery in private international arbitrations. The provision was

enlarged to further comity among natio ns, not to complicate and

undermine the salutary device of private international arbitration.

REVERSED.