In re Republic of Kazakhstan, 110 F. Supp. 3d 512

Background

The Republic of Kazakhstan (ROK) sought discovery under 28 U.S.C. § 1782 from the law firm Clyde & Co. LLP (served in New York) for use in a Swedish appellate proceeding challenging an arbitral award that had valued an LPG plant at $199 million in favor of the Stati Group.
ROK alleges Clyde & Co.’s clients (Vitol/Vitol FSU B.V. and Arkham SA) were involved in three other arbitrations in which the Stati Group may have provided lower valuations for the same LPG plant; ROK seeks documents to challenge the Swedish award’s valuation and possible reliance on falsified evidence.
The Stati Group intervened and moved to vacate Judge Kimba Wood’s March 30, 2015 § 1782 order and to quash the subpoena served on Clyde & Co. U.S. LLP, arguing among other things that (1) Clyde & Co. LLP is not "found" in the Southern District of New York and (2) a sovereign cannot be an "interested person" under § 1782.
Clyde & Co. represented that its U.S. partners also are partners of the London firm and that the firm maintains a systematic and continuous presence in New York; Clyde & Co. did not oppose producing the requested documents at oral argument.
The court found all statutory prerequisites of § 1782 satisfied (person found in district, use in foreign proceeding, application by an interested person) and applied the Intel discretionary factors, concluding they favor allowing discovery.
The Stati Group’s motion to vacate the § 1782 order and to quash the subpoena was denied.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the subpoenaed entity is “found” in this district	Stati: Clyde & Co. LLP is a U.K. entity headquartered in London, not subject to discovery here	ROK/Clyde: U.S. partners are also partners of the LLP; the firm has a systematic and continuous New York presence	Court: Clyde & Co. is "found" in SDNY because the entities operate as a single firm; statutory requirement met
Whether a sovereign (ROK) is an “interested person” under § 1782	Stati: Sovereigns presumptively not "persons" under statutes; thus cannot be an "interested person" to invoke § 1782	ROK: Sovereigns may invoke § 1782; precedent and policy favor reciprocity and assistance to foreign tribunals	Court: Sovereigns may be "interested persons" under § 1782; denial would be asymmetrical and counterproductive
Whether § 1782 discovery is for use in a foreign proceeding	Stati: Documents irrelevant because Swedish appellate review is limited; evidence may not be admissible	ROK: Documents could show the award relied on falsified evidence or violate Swedish public policy, and thus be material to the appeal	Court: Second requirement satisfied; district court should not resolve foreign-law disputes or require proof that foreign tribunal would accept evidence
Whether Intel discretionary factors counsel denial	Stati: Request circumvents Swedish discovery and is burdensome; Swedish parties have access to many documents	ROK: No burden objections; no evidence foreign tribunal would reject evidence; interests of reciprocity and assistance weigh for discovery	Court: Intel factors support allowing discovery (nonparty to foreign proceeding, receptivity not shown, no circumvention proven, not unduly burdensome)

Key Cases Cited

In re Edelman, 295 F.3d 171 (2d Cir.) (§ 1782 supplies discovery for use in foreign proceedings)
In re Esses, 101 F.3d 873 (2d Cir.) (statutory prerequisites for § 1782)
Schmitz v. Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79 (2d Cir.) (foreign sovereignty objections and receptivity concerns under § 1782)
Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (U.S.) (factors guiding district courts' § 1782 discretionary analysis)
Euromepa S.A. v. R. Esmerian, Inc., 51 F.3d 1095 (2d Cir.) (limits on district courts resolving foreign discoverability; authoritative proof requirement)
Euromepa S.A. v. R. Esmerian, Inc., 154 F.3d 24 (2d Cir.) (rejection of foreign discoverability requirement when applying Intel)
In re Godfrey, 526 F. Supp. 2d 417 (S.D.N.Y.) (what it means to be "found" in the district for § 1782)
Vermont Agency of Natural Res. v. United States ex rel. Stevens, 529 U.S. 765 (U.S.) (presumption that "person" excludes sovereigns is not absolute)
United States v. Cooper Corp., 312 U.S. 600 (U.S.) (statutory interpretation aids in determining whether "person" includes sovereign)
Application of Malev Hungarian Airlines, 964 F.2d 97 (2d Cir.) (no exhaustion/quasi-exhaustion requirement before seeking § 1782 relief)
In re Metallgesellschaft AG, 121 F.3d 77 (2d Cir.) (warning against speculative forays into foreign law when adjudicating § 1782 requests)