In Re: Alpene, Ltd.

Filing 33

MEMORANDUM AND ORDER RE 14 : In sum, I find insufficient support for the argument that Malta and China intended to imbue the ICSID arbitration panel with governmental authority. It therefore does not qualify as a foreign or international tribunal un der § 1782, and McCauls motion to vacate and for an order quashing and granting a protective order with respect to Alpene's document and deposition subpoenas is hereby granted. So Ordered by Magistrate Judge Robert M. Levy on 10/27/2022. (JM) See attached Memorandum & Order for details.

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------------------------X
IN RE APPLICATION OF ALPENE, LTD.
FOR AN ORDER DIRECTING DISCOVERY
FROM ELIZABETH McCAUL PURSUANT
TO 28 U.S.C. § 1782
---------------------------------------------------------X
LEVY, United States Magistrate Judge:

MEMORANDUM
AND ORDER
21 MC 2547 (MKB)(RML)

Alpene Ltd. (“Alpene”) commenced this case on August 30, 2021, seeking an
order authorizing it to issue subpoenas for documents and testimony to Elizabeth McCaul
(“McCaul”) in aid of a foreign proceeding, pursuant to 28 U.S.C. § 1782. By order dated
September 9, 2021, the Honorable Margo K. Brodie, United States District Judge, referred the
application to me. On September 20, 2021, I granted the request. (See Order, dated Sept. 20,
2021.) McCaul filed the instant motion to vacate, and for an order quashing and granting a
protective order with respect to the document and deposition subpoenas, on November 11, 2021.
(See Motion to Vacate, dated Nov. 11, 2021, Dkt. No. 14; Memorandum of Law in Support of
Motion to Vacate Order Granting Discovery Pursuant to 28 U.S.C. § 1782, dated Nov. 11, 2021,
Dkt. No. 15.)
Because the United States Supreme Court had granted certiorari in AlixPartners,
LLP v. The Fund for Protection of Investors’ Rights in Foreign States, 142 S. Ct. 638 (2021),
cert. granted, No. 21-518, 2021 WL 5858633 (U.S. Dec. 10, 2021), which had the potential to
affect the outcome of this matter, I stayed the application pending the Court’s decision. (See
Memorandum & Order, dated Feb. 3, 2022 (the “M&O”), Dkt. No. 26.) On June 13, 2022, the
Supreme Court issued a unanimous decision in AlixPartners, which was consolidated with a case
called ZF Automotive US, Inc. v. Luxshare, Ltd. See ZF Auto. US, Inc. v. Luxshare, Ltd., 142
S. Ct. 2078 (2022) (“AlixPartners”). The parties then briefed the question of how the Court’s

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decision impacts this case. (See Supplemental Memorandum of Law in Support of Motion to
Vacate Order Granting Discovery Pursuant to 28 U.S.C. § 1782, and for Related Relief, dated
July 1, 2022, Dkt. No. 28; Supplemental Memorandum of Law in Support of Application of
Alpene Ltd. for an Order Directing Discovery from Elizabeth McCaul Pursuant to 28 U.S.C.
§1782, dated July 22, 2022, Dkt. No. 30; Reply Supplemental Memorandum of Law in Further
Support of Motion to Vacate Order Granting Discovery Pursuant to 28 U.S.C. § 1782, and for
Related Relief, dated Aug. 5, 2022, Dkt. No. 31.)
The parties are fully familiar with the background of this case. Briefly, Alpene, a
Hong Kong corporation, is a claimant in an investor-state treaty arbitration against the Republic
of Malta (“Malta”) before the World Bank’s International Centre for the Settlement of
Investment Disputes (“ICSID”). Alpene brought this case to obtain discovery from McCaul, a
New York resident, in connection with the ICSID arbitration.
As explained in the M&O, 28 U.S.C. § 1782 authorizes federal courts to order
persons in the United States to give testimony or produce documents “for use in a proceeding in
a foreign or international tribunal.” The statute requires: “‘(1) that the person from whom
discovery is sought reside (or be found) in the district of the district court to which the
application is made; (2) that the discovery be for use in a proceeding before a foreign or
international tribunal; and (3) that the application be made by a foreign or international tribunal
or ‘any interested person.’” In re Edelman, 295 F.3d 171, 175-76 (2d Cir. 2002) (quoting In re
Esses, 101 F.3d 873, 875 (2d Cir. 1996)). At issue here is whether the ICSID arbitration panel
constitutes a “foreign or international tribunal” within the meaning of § 1782.
In AlixPartners, the Supreme Court explained that “[t]he statute reaches only
governmental or intergovernmental adjudicative bodies” and that “private adjudicatory bodies”

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cannot be foreign or international tribunals. 142 S. Ct. at 2083. Consulting dictionary
definitions and statutory history, the Court found that a “foreign tribunal” is “a tribunal imbued
with governmental authority by one nation,” and an “international tribunal” is “a tribunal imbued
with governmental authority by multiple nations.” Id. at 2087. Applying these principles to the
ad hoc arbitration panel at issue in AlixPartners, which was established by a bilateral investment
treaty between Lithuania and the Russian Federation, the Court noted that “a body does not
possess governmental authority just because nations agree in a treaty to submit to arbitration
before it” or because one of the parties is a sovereign. Id. at 2091. Rather, “[t]he relevant
question is whether the nations intended that the [arbitral] panel exercise governmental
authority,” and in AlixPartners, “all indications [we]re that they did not.” Id.
Thus, the inquiry is whether the treaty parties, in this case Malta and China,
indicated an intent “to imbue the body in question [here, the ICSID arbitration panel] with
governmental authority.” Id. The Supreme Court did not set out any test or provide any
guidelines for lower courts to follow in making this determination, but it acknowledged that a
“tribunal” need not be a court, and it identified some factors that it considered in concluding that
such intent was lacking in AlixPartners. Among the persuasive elements were that: (1) nothing
in the applicable treaty reflected Russia’s and Lithuania’s intent that an ad hoc arbitration panel
exercise governmental authority, (2) the ad hoc panel “function[ed] independently” of and was
not affiliated with either Lithuania or Russia, (3) the panel consisted of “individuals chosen by
the parties and lacking any official affiliation with Lithuania, Russia, or any other governmental
or intergovernmental entity,” (4) the panel received no government funding and the parties were
responsible for paying fees and costs, and (5) the proceedings were confidential. Id. at 2090
(citations omitted).

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The Bilateral Investment Treaty between Malta and China provides that a dispute
between an investor and one of the contracting parties that is not resolved through negotiations
can be submitted at the investor’s choice to: (1) a court of appropriate jurisdiction in the country
that is a party to the dispute (here, Malta); (2) arbitration under the auspices of the ICSID, or (3)
ad hoc arbitration under the Arbitration Rules of the United Nations Commission on
International Trade Law (“UNCITRAL”), like the arbitration panel in AlixPartners. (See
Agreement Between the Government of Malta and the Government of the People’s Republic of
China on the Promotion and Protection of Investments, dated Feb. 22, 2009 (“Treaty”), annexed
to the Declaration of Michael C. Keats, Esq., dated Nov. 11, 2021, as Ex. 3, Dkt. No. 16-3, art.
9(2), at 8.) In other words, the ICSID is one of several options an investor could elect to resolve
a dispute. As the Court explained in AlixPartners, “[t]the inclusion of courts on the list” reflects
Malta’s and China’s “intent to give investors the choice of bringing their disputes before a preexisting governmental body” or to “one formed for the purpose of adjudicating investor state
disputes.” 142 S. Ct. at 2090. In other words, the inclusion of domestic courts as one option
undercut the contention that the arbitration panel had governmental authority. However, the
Court left open the possibility that sovereigns might imbue such an arbitration panel with official
authority. Id. at 2091 (“Governmental and intergovernmental bodies may take many forms, and
we do not attempt to prescribe how they should be structured.”).
Alpene chose to initiate an arbitration under the ICSID. (Declaration of Edward
Baldwin, Esq., dated Aug. 30, 2021, Dkt. No. 4-1, ¶¶ 5-6, Ex. 1.) As McCaul points out, the
ICSID is an independent, self-contained system. The ICSID operates under the authority of the
World Bank, an intergovernmental organization, and is an international arbitration institution
established in 1966 for legal dispute resolution and conciliation between states and investors who

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are nationals of other states. (See About ICSID, ICSID, https://icsid.worldbank.org/About/ICSID
(last visited Oct. 6, 2022). As was the case with the ad hoc arbitration panel in AlixPartners, the
applicable treaty did not itself create the ICSID panel, which “consists of individuals chosen by
the parties and lacking any official affiliation with [the treaty nations.]” AlixPartners, 142 S. Ct.
at 2090. (See Treaty, art. 9(6) at 9; Supplemental Declaration of Michael C. Keats, Esq., dated
July 1, 2022, Dkt. No. 29, Exs. 35 & 36.) The treaty is also silent as to whether it was the
parties’ intent “to imbue [the ICSID] with governmental authority.” 142 S. Ct. at 2091.
There are a number of similarities between the ad hoc UNCITRAL arbitration
panel in AlixPartners and the ICSID arbitration panel. For example, both provide immunity for
arbitrators absent intentional wrongdoing, and both require the parties to pay arbitration costs,
including arbitrator fees. (See ICSID ADMINISTRATIVE AND FINANCIAL REGULATIONS
(2006), Dkt. No. 30-4, Reg. 14(3)(a); ICSID CONVENTION, REGULATIONS AND RULES, Dkt.

No. 32-2, Rule 28.) Those factors therefore do not distinguish one from the other.
However, there are some significant differences between the ICSID and the ad
hoc panel at issue in AlixPartners. As Alpene emphasizes, the ICSID has over 150 member
states, 1 including Malta and China, which ratified the Convention on the Settlement of
Investment Disputes between States and Nationals of Other States (the “ICSID Convention”).
Member states can designate individuals to serve on the ICSID Panels of Arbitrators and
Conciliators. 2 (See CONVENTION ON THE SETTLEMENT OF INVESTMENT

1

The list of ICSID member states is available at https://icsid.worldbank.org/about/memberstates/database-of-member-states.
2

The parties are not restricted to the ICSID Panels in selecting arbitrators, and in fact Alpene
appointed an arbitrator not on ICSID’s Panel of Arbitrators. (See MEMBERS OF THE PANELS
OF CONCILIATORS AND OF ARBITRATORS, Dkt. No. 30-6; Supplemental Declaration of
Michael C. Keats, Esq., dated July 1, 2022, Dkt. No. 29, Exs. 35 & 36.)
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DISPUTES BETWEEN STATES AND NATIONALS OF OTHER STATES, Dkt. No. 30-3, Art. 13;
MEMBERS OF THE PANELS OF CONCILIATORS AND OF ARBITRATORS, Dkt. No. 30-6.) In
addition, each member state has a representative on the ICSID Administrative Council, which
meets annually to adopt administrative and financial regulations and approve rules for ICSIDadministered cases. (Id.) Indeed, the legal framework of the ICSID Convention creates a
permanent institution, and provides that the resulting awards shall have the status of final
judgments and are binding as a matter of public law in all ICSID member states. ICSID awards
are also entitled to full faith and credit in U.S. courts. Tethyan Copper Co. Pty Ltd. v. Islamic
Republic of Pakistan, No. 19 CV 2424, 2022 WL 715215, at *3 (D.D.C. Mar. 10, 2022).
However, the fact that courts play a role in enforcing arbitration agreements and awards does not
give an arbitral panel “governmental authority.” AlixPartners, 142 S. Ct. at 2089.
The “animating purpose of § 1782 is comity” to foreign and international
governmental bodies. Id. at 2088. The statute was intended to promote assistance and
cooperation between the United States and foreign countries. Thus, one question for this court is
whether the ICSID exercises governmental authority such that granting discovery requests by
parties in arbitrations before the ICSID would “promote[] respect for foreign governments and
encourage[] reciprocal assistance.” Id. Under the Court’s analysis, it is hard to imagine how it
would. As McCaul points out, the ICSID (and investor-state arbitration generally) did not yet
exist in 1964 when § 1782 was amended to include the phrase “foreign or international
tribunals.” Id. at 2086. And obviously, ICSID arbitral tribunals have no authority to provide
reciprocal discovery assistance for United States proceedings.
The Court in AlixPartners also referred to the need to interpret § 1782 in harmony
with the Federal Arbitration Act, which authorizes discovery in U.S. arbitration proceedings only

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in narrow circumstances. It noted that construing § 1782 to reach foreign arbitrations would
create a “notable mismatch between foreign and domestic arbitration.” Id. at 2088 (“[I]t’s hard
to conjure a rationale for giving parties to private foreign arbitrations such broad access to
federal-court discovery assistance in the United States while precluding such discovery
assistance for litigants in domestic arbitrations.”) (quoting Servotronics, Inc. v. Rolls-Royce
PLC, 975 F.3d 689, 695 (7th Cir. 2020)). The same “mismatch” would apply here, were this
court to permit Alpene to take discovery from McCaul.
This court’s research uncovered no case law post-AlixPartners analyzing whether
an ICSID arbitration panel is an international tribunal. But it bears noting that until AlixPartners,
federal courts uniformly held that investor-state arbitrations were eligible for § 1782 discovery.
While the Supreme Court did not address ICSID investor-state arbitrations specifically, by
reaching out to decide this issue absent a circuit split, it did signal a desire to limit the
availability of discovery in U.S. courts for international commercial arbitrations.
In sum, I find insufficient support for the argument that Malta and China intended
to imbue the ICSID arbitration panel with governmental authority. It therefore does not qualify
as a “foreign or international tribunal” under § 1782, and McCaul’s motion to vacate and for an
order quashing and granting a protective order with respect to Alpene’s document and deposition
subpoenas is hereby granted.
SO ORDERED.
/s/
ROBERT M. LEVY
United States Magistrate Judge
Dated: Brooklyn, New York
October 27, 2022

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