Page 9 Fall/Winter 2018 “Exchange of Information” provisions have come to play in arbitration proceedings and what the parties to an arbitration agreement can do to ensure that they have provided for a level of dis- covery adequate to meet their needs. The Historical Context of Discovery in Arbitration Proceedings Two of the traditional hallmarks of arbitration have been its relative speed and economy in comparison with most judicial proceedings. His- torically, most cases were resolved within six months of the time that an arbitrator was appointed, and the costs of resolving a dispute were often considerably less than in court proceedings. Generally, there was — and still is — no uni- lateral right to conduct pre- hearing discovery unless permit- ted by the parties’ agreement to arbitrate or by the applicable rules of the chosen arbitration provider: An arbitration hearing is not a court of law. When contracting parties stipulate that disputes will be submitted to arbi- tration, they relinquish the right to cer- tain procedural niceties which are nor- mally associated with a formal trial. One of these is the right to pre-trial dis- covery. While an arbitration panel may subpoena documents or witnesses, the litigating parties have no comparable privilege.2 The Federal Arbitration Act, 9 U.S.C. §§ 1-16, (the “FAA”) does not even mention discovery. While section 7 of the FAA, 9 U.S.C. § 7, clearly grants arbitrators the authority to subpoena both parties and non-parties to appear and pro- duce documents at an arbitration hearing, there is a substantial question as to whether this sec- (Continued from page 1) tion also grants arbitrators the power to order pre-trial discovery; and, if so, what should be the extent of this power. The reported deci- sions are widely split on these issues with a majority concluding that an arbitrator simply lacks the authority to order participation in pre-hearing discovery. This is particularly the case with respect to non-parties.3 Most nota- bly, the Ninth Circuit recently joined with the Second, Third and Fourth Circuits in holding that “section 7 of the FAA does not grant arbi- trators the power to order third parties to pro- duce documents prior to an arbitration hear- ing.”4 Even when an arbitrator does allow pre-hearing discovery, a related con- cern may also arise: What are the ter- ritorial limits of an arbitrator’s subpoe- na powers? This issue can become par- ticularly nettlesome since “[a] petition to enforce subpoenas issued by arbitra- tors must be brought in the district in which such arbitrators are sitting.”5 Once again, the federal courts have widely divergent opinions as to wheth- er the jurisdictional limits of Federal Rule of Civil Procedure 45(b)(2) apply or there is “nationwide jurisdiction” in arbitrations.6 The reach of the FAA is extremely broad. It applies to any written “maritime transaction or a contract evidencing a transaction involv- ing interstate commerce to settle by arbitra- tion a controversy thereafter arising.”7 It “‘creates a body of federal substantive law’. . . applicable in state and federal court” and “forecloses state legislative attempts to under- cut the enforceability of arbitration agree- ments.”8 However, state or international law may supplement — or even supplant — the FAA in many instances. For example, when the state courts have concurrent jurisdiction or the arbitration agreement contains a valid choice-of-law provision, the arbitration laws of the forum state will generally govern.9 (Continued on page 10) Discovery in Arbitration “Generally, there was — and still is — no unilateral right to conduct pre-hearing discovery unless permitted by the parties’ agreement.”