Opinion ID: 760802
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: 3 In 1994, NBC and Azteca, a then-privately-held Mexican television broadcasting company, entered into an agreement under which NBC would provide Azteca with programming and other services. In exchange, NBC's compensation included the option to purchase up to 10% of Azteca's shares at any time before May 1997 according to a preset pricing formula. The agreement also provided that any disputes would be resolved through private commercial arbitration administered by the International Chamber of Commerce (ICC), a private organization based in Paris, France, under ICC rules and Mexican law. Purporting to act under the agreements, NBC on April 3, 1997 sought to purchase 1% of Azteca's shares. On April 28, 1997, Azteca, alleging that NBC had failed to perform under the agreement, initiated arbitration against NBC in Mexico pursuant to the 1994 agreement. On July 15, 1997, NBC filed its answer, and on July 29, 1997, amended its answer and included counterclaims; the counterclaims alleged that Azteca improperly induced NBC to forgo exercising its option for the full 10% of Azteca's shares by leading NBC to believe, among other things, that (i) Azteca had no plans to conduct an initial public offering of securities (IPO), and (ii) Azteca's estimate of the value of the company's shares was not significantly above the contractually agreed exercise price. Azteca replied that it never contemplated a public offering or misstated the value of its shares during the relevant time period. 4 In anticipation of the ICC arbitration proceeding in Mexico but prior to the appointment of the arbitration panel, NBC applied ex parte, pursuant to 28 U.S.C. § 1782, to the United States District Court for the Southern District of New York (Deborah A. Batts, Judge ) for authorization to serve document subpoenas on the six third-party financial institutions engaged by Azteca with regard to its IPO plans. On August 1, 1997, Judge Batts granted the application, and NBC later served the subpoenas, which demanded the production of documents bearing on the timing of Azteca's IPO plans and the valuation of Azteca shares. Within a month, Azteca and five of the third-party financial institutions moved to quash the subpoenas; NBC cross-moved to compel compliance with them. 5 On January 16, 1998, Judge Sweet granted the motion to quash the subpoenas and denied NBC's cross-motion, concluding that the term foreign or international tribunal in 28 U.S.C. § 1782, a statute authorizing district courts to assist discovery efforts in connection with proceedings before such tribunals, does not encompass private international commercial arbitration. This timely appeal followed.