20 Misc. 209
S.D.N.Y.2020Background
- In 2010 Nigeria entered a Gas Supply and Processing Agreement (GSPA) with Process & Industrial Developments Ltd. (P&ID); a London arbitral tribunal awarded P&ID $6.6 billion in 2017 for Nigeria’s repudiation of the GSPA.
- P&ID sought enforcement in England and the U.S.; VR Advisory acquired a 25% stake in P&ID in 2018 and thus possessed due-diligence and corporate materials relating to P&ID.
- Nigeria’s anti-corruption authorities (EFCC) opened a criminal investigation/prosecution alleging P&ID obtained the GSPA and/or the Award through bribery and perjury; Nigeria also challenged the Award in England (enforcement stayed pending appeal).
- Nigeria previously used a § 1782 application in SDNY (before Judge Schofield) to obtain U.S. discovery it then submitted to the English court in support of its challenge to the Award.
- In May 2020 Nigeria filed an ex parte § 1782 petition in this district seeking document and deposition subpoenas directed to VR and affiliates for use in Nigeria’s criminal proceedings; the Court initially authorized discovery, Respondents moved to vacate, and discovery was stayed.
- The Court (Engelmayer, J.) assumed the statutory § 1782 prerequisites might be met but exercised its discretion to vacate the prior § 1782 authorization and quash the subpoenas, primarily because Nigeria bypassed the U.S.–Nigeria MLAT and the Intel discretionary factors (notably factor 3) weighed heavily against ordering discovery.
Issues
| Issue | Applicant (Nigeria) Argument | Respondents (VR et al.) Argument | Held |
|---|---|---|---|
| Whether § 1782 statutory prerequisites are satisfied (person found in district; use in foreign proceeding; applicant is interested person) | Applicants: Respondents are found in the district; discovery is for use in Nigerian criminal investigations; Applicants are interested persons (Attorney General/sovereign). | Respondents: Discovery will actually be used to attack the arbitral Award in England (a non‑qualifying, post‑judgment enforcement matter), so the “for use” requirement fails. | Court assumed first and third prongs satisfied and, because factual dispute close, assumed arguendo the second prong was met. |
| Whether the Court should exercise discretion to grant § 1782 discovery (Intel factors) | Applicants: Intel factors do not preclude relief; sought evidence likely relevant to Nigerian criminal probe, and VR’s due diligence may have produced unique documents. | Respondents: Intel factors weigh against discovery—especially factor 3—because Nigeria bypassed the MLAT, suggesting circumvention and potential ulterior use to undermine the Award; factor 1 is weak because documents likely derive from P&ID (a foreign‑party). | Court denied discovery in its discretion: Intel factor 3 (circumvention of MLAT) and factor 4 (overbroad/possibly irrelevant requests) strongly favored denial; factors 1 and 2 carried little weight. |
| Whether Nigeria’s bypass of the MLAT process is legally relevant to the discretionary Intel analysis | Applicants: Court should not penalize applicants for not using MLAT; MLAT is not jurisdictional and failure to use it is immaterial. | Respondents: Bypassing MLAT undermines comity and DOJ review protections, and weighs heavily against granting § 1782 relief. | Court: MLAT circumvention is a proper and weighty consideration under Intel factor 3; Nigeria offered no persuasive justification for avoiding MLAT. |
| Whether subpoena requests are overly broad or seek materials irrelevant to the criminal probe (burdensomeness/relevance) | Applicants: Requests probe bribery and related conduct, which plausibly includes arbitration and enforcement materials. | Respondents: Many requests sweep to arbitration/enforcement strategy and thus are unrelated or marginal to the Nigerian criminal investigation (fishing expedition). | Court: Several requests appear overbroad; factor 4 supports denial absent substantial pruning; overall discretion exercised to deny. |
Key Cases Cited
- Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004) (supreme court articulating discretionary factors for § 1782 requests)
- Mees v. Buiter, 793 F.3d 291 (2d Cir. 2015) (statutory elements and application of Intel in Second Circuit)
- Euromepa, S.A. v. R. Esmerian, Inc., 154 F.3d 24 (2d Cir. 1998) (post‑judgment/enforcement proceedings are not the kind of adjudicative proceedings § 1782 contemplates)
- In re Letters Rogatory Issued by Director of Inspection of Gov’t of India, 385 F.2d 1017 (2d Cir. 1967) (adjudicative‑nature requirement for § 1782 “for use” prong)
- In re Accent Delight Int’l Ltd., 869 F.3d 121 (2d Cir. 2017) (permitted secondary uses of § 1782 discovery if primary qualifying purpose exists; caution against sham litigation)
- Kiobel by Samkalden v. Cravath, Swaine & Moore LLP, 895 F.3d 238 (2d Cir. 2018) (weight to be given when documents originate from a foreign party who is subject to the foreign tribunal’s jurisdiction)
- Schmitz v. Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79 (2d Cir. 2004) (district court’s broad discretion to grant or deny § 1782 discovery)
- In re Republic of Kazakhstan, 110 F. Supp. 3d 512 (S.D.N.Y. 2015) (discussed by parties on whether § 1782 can reach materials held by non‑party in U.S.)