Diag Human S.E. v. Czech Republic-Ministry of Health
64 F. Supp. 3d 22
D.D.C.2014Background
- Diag Human sues the Czech Republic Ministry of Health to confirm an August 4, 2008 arbitration award under the FAA/New York Convention.
- The arbitration, seated in the Czech Republic, awarded Diag Human about $650 million for alleged interference in its business with Novo Nordisk.
- Plaintiff contends the Minister of Health’s letter to Novo Nordisk caused the loss of the Novo Nordisk relationship.
- Defendant moved to dismiss on multiple grounds, including lack of New York Convention/jurisdiction and forum non conveniens.
- Court sua sponte dismisses for lack of subject matter jurisdiction, holding NY Convention and FSIA exceptions do not apply.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the New York Convention apply to enforce the arbitration award? | Diag argues the award is enforceable under the New York Convention via FAA §§ 201–08. | Czech Republic contends the NY Convention does not apply because there was no commercial relationship. | NY Convention does not apply; not a commercial relationship. |
| Does the Foreign Sovereign Immunities Act permit jurisdiction over the Czech Republic? | FSIA yields jurisdiction via waivers or entry into arbitration; defendant waived immunity implicitly or explicitly. | No explicit/implicit waiver; the Czech Republic did not file a responsive pleading or otherwise waive immunity. | Immunity not waived; FSIA does not confer jurisdiction. |
| Do the FSIA § 1605(a)(6) exceptions permit this suit to proceed? | Arbitration award should be enforceable under one of § 1605(a)(6) exceptions. | No applicable subsection since arbitration occurred in the Czech Republic and NY Convention does not apply. | No § 1605(a)(6) exception applies. |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (U.S. 1994) (subject-matter jurisdiction cannot be waived; sua sponte dismissal authorized)
- Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480 (U.S. 1983) (FSIA framework; sovereign immunity exceptions govern jurisdiction)
- Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438 (D.C. Cir. 1990) (implied waiver requires conscious government participation in litigation)
- Princz v. Feder. Republic of Germany, 26 F.3d 1166 (D.C. Cir. 1994) (implied waiver requires clear intent to submit to suit)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (plaintiff bears burden to prove jurisdiction by preponderance)