The Application of the Fund v. AlixPartners, 20-2653-cv

Background

In 2011 Lithuanian authorities nationalized AB bankas Snoras; Simon Freakley was appointed temporary administrator and later reported insolvency leading to bankruptcy proceedings.
Vladimir Antonov’s investment interests in Snoras were assigned to The Fund for Protection of Investor Rights in Foreign States (the Fund), which in April 2019 commenced arbitration against the Republic of Lithuania under the Russia–Lithuania bilateral investment treaty (the Treaty), electing ad hoc UNCITRAL arbitration.
The Fund filed a § 1782(a) application in SDNY seeking discovery from Freakley and his employer AlixPartners (located in New York) for use in the BIT arbitration; Lithuania asked the arbitral panel to order withdrawal of the § 1782 application but the panel declined to bar it.
The District Court granted the § 1782 application (July 8, 2020) and denied reconsideration (Aug. 25, 2020); AlixPartners appealed to the Second Circuit.
Key legal questions were whether (1) a BIT arbitration between an investor and a State is a “proceeding in a foreign or international tribunal” under 28 U.S.C. § 1782; (2) the Fund is an “interested person”; and (3) the Intel discretionary factors support granting discovery.
The Second Circuit affirmed: the BIT arbitration qualifies as a foreign or international tribunal, the Fund is an interested person (litigant), and the District Court did not abuse its discretion in applying the Intel factors to grant discovery.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a BIT arbitration between an investor and a State is a “foreign or international tribunal” under § 1782	The Fund: arbitration is authorized by a treaty between States and serves international-law and state-to-state policy goals, so it qualifies	AlixPartners: arbitration is functionally private (ad hoc, private arbitrators) and Guo limits § 1782 to non-private tribunals	Held: Yes. Applying Guo’s functional factors, the panel’s treaty basis, State-party status, and international purpose weigh in favor of qualifying as a foreign or international tribunal
Whether the Fund is an “interested person” under § 1782	The Fund: it is a party to the arbitration (assignee) and thus a litigant entitled to invoke § 1782	AlixPartners: Fund hasn’t proven assignment/standing yet	Held: Yes. The Fund is a party to the arbitration and qualifies as an interested person despite ongoing bifurcated standing proceedings
Whether the Intel discretionary factors support granting discovery under § 1782	The Fund: respondents are nonparties outside the tribunal’s reach; the arbitral panel declined to bar § 1782 discovery; requested discovery is material and proportionate	AlixPartners: discovery would circumvent Lithuanian privileges/bank secrecy and is burdensome; reciprocity and admissibility concerns counsel denial	Held: District Court did not abuse discretion. Intel factors (nonparty status, receptivity, no categorical foreign-discoverability rule, proportionality) favor granting discovery; privilege/admissibility issues to be addressed via objections/protective orders

Key Cases Cited

Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004) (establishes statutory scope of § 1782 and sets discretionary Intel factors)
In re Guo, 965 F.3d 96 (2d Cir. 2020) (articulates functional, multi-factor inquiry for whether an arbitral body is a “foreign or international tribunal”)
Nat’l Broad. Co. v. Bear Stearns & Co., 165 F.3d 184 (2d Cir. 1999) (holding § 1782 covers governmental/intergovernmental arbitral tribunals but not private-party-created panels)
Brandi-Dohrn v. IKB Deutsche Industriebank AG, 673 F.3d 76 (2d Cir. 2012) (confirming no foreign admissibility requirement bars § 1782 production)
Lancaster Factoring Co. v. Mangone, 90 F.3d 38 (2d Cir. 1996) (abuse-of-discretion standard for district court’s § 1782 decisions)
Schmitz v. Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79 (2d Cir. 2004) (describes § 1782’s twin aims and discretionary nature)
Mees v. Buiter, 793 F.3d 291 (2d Cir. 2015) (applying Rule 26 proportionality in § 1782 context)
BG Grp., PLC v. Republic of Argentina, 572 U.S. 25 (2014) (recognizing the international importance of treaty-based arbitration)