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“Discovery of documents” in cross-border trials
Germany | Publication | Issue November 2022
Germany has modernised its law of evidence and, for the first time, introduced international mutual assistance for requests for document production, better known as "pre-trial discovery of documents". While Germany has changed its approach, the US Supreme Court has put an end to the court-assisted discovery in international arbitration proceedings.
Content
Background
The 2020 amended EU Service Regulation (Regulation (EU) 2020/1784) and EU Taking of Evidence Regulation (Regulation (EU) 2020/1783) are set to speed up and simplify the cross-border service and taking of evidence between the Member States of the European Union. In Germany, the necessary amendments came into force on July 1, 2022, by the “Act Implementing the EU Regulations on Cross-Border Service and the Taking of Evidence in Civil or Commercial Matters” (“Gesetz zur Durchführung der EU-Verordnungen über grenzüberschreitende Zustellungen und grenzüberschreitende Beweisaufnahmen in Zivil- oder Handelssachen”) (Federal Law Gazette I 2022, 959). In particular, the amended section 14 of the "Implementing Act to the Hague Convention of November 15, 1965, on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters and the Hague Convention of March 18, 1970, on the Taking of Evidence Abroad in Civil or Commercial Matters" (HSC/HEC Implementing Act) (“Gesetz zur Ausführung des Haager Übereinkommens vom 15. November 1965 über die Zustellung gerichtlicher und außergerichtlicher Schriftstücke im Ausland in Ziviloder Handelssachen und des Haager Übereinkommens vom 18. März 1970 über die Beweisaufnahme im Ausland in Zivil- oder Handelssachen“ (HZÜ/HBÜ-AusführungsG)) extends existing mutual assistance possibilities in relation to the pre-trial discovery of documents. The latter was not possible previously because the Federal Republic of Germany, in accordance with the reservation of section 23 HEC, did not execute requests for mutual assistance, which "have as their subject matter proceedings known in common law states as 'pre-trial discovery of documents’”. This meant that, while certain document submissions were admissible for merely national German court proceedings under the prerequisites of section 142 of the German Code of Civil Procedure (ZPO), they were inadmissible for requests for the taking of evidence from common law states. This differing treatment is now to be eliminated.
Eligibility criteria
Mutual assistance requests seeking pre-trial discovery of documents will, however, only be executed under strict prerequisites regarding the documents to be produced. To this end, all of the following prerequisites must be met: the documents to be produced (i) must be specified in detail, (ii) must be of direct and clearly recognisable importance for the respective proceedings and their outcome, (iii) must be in the possession of a party to the proceedings and (iv) the request for production must not violate fundamental principles of German law. With these strict requirements, extensive fishing expeditions remain prohibited. In general, if personal data is concerned, the data protection requirements for the transfer to a third country must be met. This may, for example, require anonymization/ pseudonymisation and/or the exclusion of certain information from the transfer. In this context, it should be mentioned in passing that since the General Data Protection Regulation (GDPR) came into force, there has been an increasing number of cases in which the claimant's side attempted to obtain information and documents in the sphere of a (potential) defendant via Article 15 of the GDPR (access to personal data) in order to be able to assess or improve the enforceability of a civil law claim that is not related to data protection. The Higher Regional Court of Nuremberg has put an end to the excessive use of the right to information under data protection by referring to the exception in Article 12 para. 5 sentence 2 of the GDPR, according to which there is a right of refusal if the request is abusive, for example because it serves the pursuit of purposes unrelated to data protection (Higher Regional Court of Nuremberg, March 14, 2022 – 8 U 2907/21; similarly Higher Regional Court of Dresden, March 29, 2022 – 4 U 1905/21). In this respect, however, there are also dissenting views that do not reject a right to information even if primarily pecuniary claims are to be pursued (cf. Higher Regional Court of Cologne, May 22, 2022 – 20 U 198/21).
US Supreme Court Decision
For document production requests in international arbitration proceedings between companies or individuals, the US Supreme Court’s decision of June 13, 2022, in the matter ZF Automotive US, Inc., et al. v. Luxshare, Ltd. is relevant. According to this decision, US courts are not permitted to order "discovery", in particular comprehensive disclosure of documents, in arbitration proceedings abroad. This is because only governmental or inter-governmental adjudicative bodies qualify as "foreign or international tribunals", a requirement which was not satisfied with private institutions such as the German Institution of Arbitration (Deutsche Institution für Schiedsgerichtsbarkeit – DIS), to whose rules the parties had submitted. The decision makes clear that parties cannot use the instrument of discovery in US courts to set aside arbitration agreements.
Conclusion
The amendment to the German Implementing Provisions is to be welcomed. It provides harmonisation with the legal situation existing in Germany and gives more legal certainty to German parties who are subject to a discovery request. However, to avoid potential litigation disadvantages, it is common practice to submit documents in foreign court proceedings on the basis of foreign procedural codes, even if this was denied outside a mutual assistance request due to the restrictions existing previously. It remains to be seen whether such requests can be referred successfully to mutual assistance in the future, especially since this is subject to strict prerequisites. The possibility of mutual assistance could, however, gain importance in the question of whether and to what extent requests made outside the formal mutual assistance procedure are executed, especially in view of data protection restrictions.
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