Second Circuit Confirms 28 U.S.C. § 1782 Discovery For Investor-State Arbitration

Parties can obtain discovery from U.S. court in support of arbitrations conducted under investment treaties.

On July 15, 2021, the Second Circuit reinforced the availability of § 1782 discovery to most investor-state arbitrations. In The Application of the Fund for Protection of Investor Rights, the court held that an investment arbitration, unlike a private commercial arbitration, can serve as the basis for § 1782 relief, even though the investment arbitration in question is not governmentally funded, is confidential, and the arbitrators are private individuals. 

In 2011, the Lithuanian government nationalized a bank. That prompted the Fund for Protection of Investor Rights in Foreign States ("Fund"), a Russian corporation, to commence an ad hoc arbitration against the Government of Lithuania pursuant to the Bilateral Investment Treaty between Russia and Lithuania. The Fund filed an application under 28 U.S.C. § 1782 in U.S. District Court, seeking discovery from