In Banoka S.à.r.l. v. Elliott Management Corp., the Second Circuit recently held that a contractual forum-selection clause may weigh against an application for discovery under 28 U.S.C. § 1782 (Section 1782). 2025 WL 2166397 (2d Cir. 2025).
The dispute in Banoka began with failed negotiations over the sale of a Paris hotel. The European owners of the hotel entered into an agreement with a buyer that received capital from private U.S.-based investment funds, which were advised in the negotiations by their affiliated investment-management firms. When the sale fell through, the hotel owners considered litigation against the buyer in England, the only forum permitted under the contract. They also filed Section 1782 discovery actions in the United States against the U.S. funds and their advisors seeking documents and testimony that would support their potential English claims.
The district court denied the Section 1782 application. Although the hotel owners met the statutory requirements, the district court relied on discretionary factors to conclude that discovery should not be granted. It reasoned that English courts would not permit the requested pre-suit discovery and the agreement between the buyer and seller had a broad forum-selection clause requiring any dispute concerning the agreement to be brought in England. The Second Circuit affirmed, holding that district courts do not abuse their discretion by considering forum-selection clauses as a factor weighing against Section 1782 discovery.
The Second Circuit is only the second court of appeals to issue a precedential decision addressing whether forum-selection clauses can weigh against Section 1782 discovery applications.[1] These decisions give parties new reasons to think long and hard about a forum-selection clause and whether the forum that they’re selecting could help decrease the risk of costly discovery in the United States.
Background
Section 1782
Section 1782 is a federal statute that authorizes U.S. district courts to order discovery from a person or entity located in the United States for use in proceedings before foreign tribunals. The scope of Section 1782 is broad, allowing foreign litigants to obtain documents located in the United States and, at least in some circuits, documents located abroad that are under the control of a person or entity located in the United States.[2] It can thus be an extremely powerful tool, especially in civil-law jurisdictions that typically do not provide for expansive pretrial discovery.
To obtain discovery under Section 1782, an applicant must satisfy three statutory requirements: (i) the target “resides or is found” in the district where the application was filed; (ii) the discovery sought is for use in an existing or reasonably contemplated proceeding in a foreign tribunal; and (iii) the party seeking discovery is an “interested person.” 28 U.S.C. § 1782(a).
If an applicant can satisfy those statutory requirements, the district court has discretion to order the requested discovery. The district court’s exercise of that discretion is guided by four nonexclusive factors articulated by the Supreme Court in Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004)—which are commonly called the “Intel factors.” Those factors are:
- whether “the person from whom discovery is sought is a participant in the foreign proceeding”;
- “the nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance”;
- “whether the § 1782(a) request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States”; and
- whether the request is “unduly intrusive or burdensome.”[3]
Notably, prior to Intel, some lower federal courts had construed Section 1782 to contain a “foreign-discoverability rule”—i.e., a prohibition against district courts’ ordering the production of documents that the applicant would not be able to obtain under the law of the foreign forum. But the Supreme Court rejected that limitation and instead directed district courts to exercise their discretion consistent with the Intel factors.
The dispute
Banoka S.à.r.l. (Banoka) is a Luxembourgish corporation that, together with the individual plaintiffs, was a substantial owner of Clichy Victor Hugo (CVH), a French company that managed and operated a Holiday Inn-branded hotel in Paris. Between September 2019 and February 2020, Banoka entered negotiations to sell its shares in CVH to Westmont International Development Inc. (Westmont), a real estate development group. At the time, Westmont was engaged in a joint venture called WNE Investor S.à.r.l. (WNE Investor) with Elliott Associates, L.P., and Elliott International L.P. (together, the Elliott Funds). The Elliott Funds were advised by affiliated investment advisors Elliott Investment Management L.P. (EIM) and Elliott Management Corp. (EMC) (together with the Elliott Funds, the Elliott Entities).
Negotiations over the Paris hotel transaction took place exclusively between England-based representatives of Westmont and France-based representatives of Banoka. In fall 2019, the parties entered into an exclusivity agreement with a broadly worded forum-selection clause, which provided that “the courts of England and Wales [would] have exclusive jurisdiction in relation to any dispute arising out of or in relation to” the exclusivity agreement.[4] The deal eventually fell through.
Proceedings in the district court
Banoka, believing that Westmont had delayed the deal in bad faith, began to explore potential litigation against Westmont in England. But it didn’t have the facts needed to support its claim. So, it filed a Section 1782 action seeking discovery from the Elliott Entities in the Southern District of New York.[5] Although a magistrate judge initially recommended that the Section 1782 application be denied as a “fishing expedition,” the district court rejected that conclusion. Because Banoka had taken steps to pursue litigation in England (including engaging counsel and sending pre-suit demand letters), the district court held that the litigation was within “reasonable contemplation.” And it concluded that Banoka satisfied Section 1782’s other statutory requirements.
The district court nevertheless denied the Section 1782 application. It noted that two of the Intel factors favored discovery—i.e., (i) the Elliot entities would not be parties to the English litigation and (ii) English courts would be receptive to discovery obtained through Section 1782. But it found that the forum-selection clause weighed against discovery because English courts would not permit pre-suit discovery. It also held that the broad and burdensome nature of the requests weighed against discovery.
The appeal
On appeal, Banoka argued that the district court “impermissibly imposed” an “extra-statutory barrier” to its Section 1782 application by weighing the forum-selection clause against discovery.[6]
The Second Circuit disagreed. The court noted that several in-circuit district court decisions—including one summarily affirmed by the court—had weighed the existence of a forum-selection clause against Section 1782 applications where the scope of the discovery in the selected forum was limited. And the Seventh Circuit—the only other circuit to have considered this issue in a published opinion—likewise concluded that “a forum selection clause might indicate the parties’ preference for a court system that doesn’t contemplate the level of compulsory process available in America,” making it “a relevant and potentially important factor in the § 1782(a) calculus.”[7]
As the court explained, the existence of a forum-selection clause should not be “dispositive” to a district court’s Section 1782 analysis. Id. at *9. But it was not an abuse of discretion for the district court to engage in a “fact-sensitive and highly contextual analysis regarding the forum-selection clause.” Id. at *10 (cleaned up). And in this case, that analysis tilted in favor of denying the application. Banoka and Westmont “were both sophisticated parties who bound themselves to litigate this matter in English courts subject to U.K. proof-gathering limitations.” Id. at *9 (cleaned up). And based on the evidence before the district court, it was “unlikely” that an English court would allow pre-suit discovery of the materials Banoka requested. Id.
Comments
The Second Circuit’s decision makes clear that a district court may consider whether a Section 1782 applicant is bound by a forum-selection clause—and whether the discovery it seeks is available in the foreign forum so selected. At first blush, this seems like an invitation for parties to contractually opt in to a version of the “foreign-discoverability rule” that the Supreme Court rejected in Intel. The district court’s decision to deny the petition turned in large part on the clause and whether the requested pre-suit discovery would have been available in an English court. Although the Second Circuit made clear that district courts cannot treat such a clause as dispositive, it suggests that district courts can put significant weight on such contractual provisions, so long as they are part of a holistic analysis.
But critical distinctions remain. The foreign-discoverability rule required an applicant to show that discovery would be available in the foreign tribunal. That was a hard-and-fast rule. It applied equally to torts, investigations, criminal cases, or other cases where there was no underlying contract. And it applied regardless of what the parties said in any contract. It was essentially an element of the applicant’s case. The Second Circuit’s rule, by contrast, is significantly more modest. It permits—but does not require—district courts to consider foreign discoverability in contract disputes. It empowers district court discretion without imposing anything like a bright-line rule.
Because Banoka expands district court discretion, it is difficult to predict precisely how it will impact other cases with different facts. Indeed, the district court stressed at least three aspects of Banoka that may set it apart from other cases.
First, the forum-selection clause was mandatory and exclusive. It made clear that actions could be brought only in England and Wales—nowhere else. By contrast, a permissive forum-selection clause—which permits a suit to be brought in a forum but does not foreclose the possibility of a suit elsewhere—is unlikely to carry as much weight in a Section 1782 action.
Second, the contract contained a very broadly worded forum-selection clause, which covered “any dispute arising out of or in relation to” the exclusivity agreement. Id. at *2 (emphasis added). It has long been understood that the language of a forum-selection clause can determine whether it is limited to an action for breach or is read expansively to include any action that relates to the contract (e.g., torts). See, e.g., Phillips v. Audio Active Ltd., 494 F.3d 378, 389-90 (2d Cir. 2007) (discussing the meaning of “arise out of” in forum-selection clause in contradistinction to “relate to” or “arise in connection with”). But this same language may now also impact whether a party can seek U.S. discovery.
Third, the applicants in Banoka sought pre-suit discovery. Even in common-law jurisdictions that provide for relatively robust civil discovery, pre-suit discovery is relatively uncommon. Indeed, the United States generally does not permit domestic plaintiffs to obtain discovery before filing suit. See, e.g., In re Postalis, 2018 WL 6725406, at *6 (S.D.N.Y. Dec. 20, 2018) (denying application sought for the “purpose of obtaining pre-litigation discovery,” which would “circumvent the laws and policies of the United States embodied in the Federal Rules of Civil Procedure”). It is unclear whether a district court would exercise its discretion differently in a Section 1782 action seeking discovery for an existing lawsuit overseas.[8]
* * *
Not long ago, Section 1782 was a largely unknown provision of the U.S. Code. But as Section 1782 discovery becomes a more common part of cross-border litigation, courts are reconsidering whether and when that tool conflicts with parties’ settled expectations. A few terms ago, the Supreme Court sharply curtailed its use in arbitration—where the parties have bargained for and agreed to more streamlined procedures.[9] The Second Circuit’s decision in Banoka likewise permits district courts to deny discovery when the parties have agreed to litigate in a forum where it would not be available. That said, Section 1782 remains a powerful tool in any civil litigator’s belt, particularly in disputes that do not turn on a contract, such as cross-border torts, restructuring matters, or intellectual property matters.
[1] The Seventh Circuit likewise held that district courts may weigh forum-selection clauses against Section 1782 applications where the foreign “court system . . . doesn’t contemplate the level of compulsory process available in America.” In re Application of Venequip, S.A. v. Caterpillar Inc., 83 F.4th 1048, 1057 (7th Cir. 2023) (cleaned up).
[2] See In re del Valle Ruiz, 939 F.3d 520, 533 (2d Cir. 2019) (“[A] district court is not categorically barred from allowing discovery under § 1782 of evidence located abroad.”); Sergeeva v. Tripleton Int’l Ltd., 834 F.3d 1194, 1200 (11th Cir. 2016) (rejecting “the Extraterritoriality Argument” and holding that “the location of responsive documents and electronically stored information—to the extent a physical location can be discerned in this digital age—does not establish a per se bar to discovery under § 1782”).
[3] Intel, 542 U.S. at 264-65.
[4] Banoka, 2025 WL 2166397, at *2.
[5] Banoka filed a separate action seeking discovery from Westmont in the Southern District of Texas, where Westmont is headquartered. The Texas district court denied that application because, among other reasons, Westmont would be a party to the potential English litigation and, hence, subject to discovery there. Banoka v. Westmont Int’l Development Inc., 2022 WL 480118, at *3-5 (S.D. Tex. Feb. 10, 2022). The Fifth Circuit summarily affirmed in a four-sentence order. Bissonnet v. Westmont Int’l Dev., Inc., 2022 WL 636680 (Mar. 4, 2022) (per curiam).
[6] Banoka, 2025 WL 2166397, at *7 (alterations adopted).
[7] Id. at *9 (quoting Venequip, 83 F.4th at 1057).
[8] Would-be plaintiffs have long used Section 1782 to investigate possible foreign suits. Indeed, Intel itself endorsed the use of Section 1782 to obtain pre-suit discovery even though such discovery likely would not have been available in the foreign forum. Intel, 542 U.S. at 259. But some courts have expressed growing skepticism over attempts to use Section 1782 “as a fishing expedition to determine if [the applicant] should pursue litigation against [respondents]” rather than as a tool in aid of foreign litigation. Ayyash v. Crowe Horwath LLP, 2018 WL 2976017, at *3 (S.D.N.Y. June 13, 2018); see also, e.g., Postalis, 2018 WL 6725406, at *4 (denying application as an “attempt to gain pre-litigation discovery for a prospective lawsuit in the United States” (emphasis added)); In re Yilport Holding A.S., 2023 WL 2140111, at *8 (D.N.J. Feb. 21, 2023) (denying application where “[t]he unrefuted evidence . . . reveals that, at least to some degree, [applicant’s] pursuit of third-party discovery under Section 1782 may be intended to circumvent the proof gathering process in the United States”); In re Application of the Republic of Türkiye, 2025 WL 2200159, at *13 (S.D.N.Y. Aug. 1, 2025) (denying application for discovery in aid of potential criminal investigation because applicant’s “sparse [a]pplication may reflect more of a fishing expedition into [respondent’s] financial activities than a legitimate use of § 1782”).
[9] ZF Automotive US, Inc. v. Luxshare, Ltd., 596 U.S. 619 (2022).
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