Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-14-07142/USCOURTS-caDC-14-07142-0/pdf.json

Nature of Suit Code: 896
Nature of Suit: Other Statutes - Arbitration
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 15, 2015 Decided May 31, 2016 

No. 14-7142

DIAG HUMAN, S.E.,

APPELLANT

v.

CZECH REPUBLIC — MINISTRY OF HEALTH 

APPELLEE

On Appeal from the United States District Court for the 

District of Columbia

(No. 1:13-cv-00355)

Hyman L. Schaffer argued the cause for petitioner and 

filed the briefs for appellant.

Alana E. Fortna, argued the cause for respondents. With 

her on the brief was Leonard Fornella. Dean A. Calland 

entered an appearance.

Before: TATEL∗ AND BROWN, Circuit Judges, and 

SENTELLE, Senior Circuit Judge.

 ∗ Judge Tatel was drawn to replace Chief Judge Garland, who originally 

heard argument in this case but did not participate in the opinion. Judge 

Tatel has read the briefs, reviewed the record, and listened to the recording 

of the oral argument.

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Opinion filed for the Court by Circuit Judge BROWN. 

Dissenting opinion filed by Senior Circuit Judge SENTELLE.

BROWN, Circuit Judge: A medical technologies company, 

embroiled in a dispute with the Czech Republic Ministry of 

Health, appeals the district court’s decision to dismiss, sua 

sponte, its claim for enforcement of a foreign arbitral award 

for lack of subject matter jurisdiction. We reverse.

I

Soviet rule, as the playwright and dissident Václav Havel

said, left “a legacy of countless dead, an infinite spectrum of 

human suffering, profound economic decline, and above all 

enormous human humiliation.” President Václav Havel, 

Address Before a Joint Session of the U.S. Congress (Feb. 21, 

1990). Eastern Europe’s transition from Communist rule to 

democracy has not been easy. Centralized political systems 

were slow to respond to new or emerging needs, including in 

health care. For example, after the fall of its communist 

government, Czechoslovakia1 faced a state-run health care 

system on the verge of collapse, stagnated health status 

indicators, and critical shortages of blood plasma. See Eur. 

Observatory on Health Care Systems, Health Care Systems in 

Transition: Czech Republic (2000), available at http://

www.euro.who.int/__data/assets/pdf_file/0019/75151/E70931

.pdf.

The government had little in the way of hard currency 

reserves, next to no access to credit, and numerous demands 

 1 Czechoslovakia existed as a sovereign state from October 1918 

until its peaceful dissolution into the sovereign states of the Czech 

Republic and Slovakia on January 1, 1993.

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on its limited resources. See, e.g., Anders Åslund, BUILDING 

CAPITALISM: THE TRANSFORMATION OF THE FORMER SOVIET 

BLOC (2002). The government was in no position to fund the 

nationwide infrastructure required to provide the country with 

adequate supplies of blood plasma. The Czech Ministry of 

Health needed to provide for blood plasma requirements 

without expending large amounts of money up front. Diag 

Human offered a creative solution.2

Thus in 1990, the Ministry of Health entered into an 

agreement with Diag Human, a blood plasma technologies 

and production company. Under the “Framework Agreement”

crafted by the parties, the Ministry contracted to purchase the 

necessary technical equipment and to provide training for 

medical personnel to ensure fractionated blood products 

would be safely transported and made available to transfusion 

wards throughout the Czech Republic. In lieu of monetary 

compensation for its performance under the Framework 

Agreement, Diag Human agreed to accept a share of the total 

volume of fractionated plasma produced. This alternative 

funding arrangement made it possible for the Ministry to 

provide the necessary infrastructure despite the country’s 

depleted coffers.

By all accounts, Diag Human performed competently 

under the Framework Agreement. The company quickly 

established cooperation agreements with twenty state-owned 

hospitals and outfitted fourteen transfusion stations with 

equipment for plasma collection. The plasma was delivered

to Novo Nordisk, a company that fractionated the plasma

 2 The precise corporate names and identities varied throughout the 

facts of this case, but these distinctions are not material to the 

present dispute. For simplicity’s sake, we will refer to Diag Human 

and its related entities as “Diag Human” throughout.

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outside the Czech Republic, and imported it back into the 

country. As agreed, Diag Human offset the cost of these 

modernization efforts and sustained a profitable business 

model by retaining a portion of the fractionated plasma.

Nevertheless, when the arrangement was only a few 

months old, the Ministry opened a bid tender seeking 

cooperation for the production of fractionated blood plasma—

essentially looking to replace the Framework 

Agreement. Diag Human and two other companies submitted 

bids. But shortly after receiving those bids, the Ministry 

suspended the tender entirely—allegedly based on 

information received from the Czech Federal Police accusing

Diag Human of illegally exporting drugs from the 

country. Although Diag Human won the bidding process and 

was ultimately cleared of any wrongdoing by the criminal 

investigation, the Ministry did not award the new tender to 

Diag Human. In the meantime, Diag Human continued to 

perform under the existing Framework Agreement.

In 1991, the Ministry opened a second tender to 

supersede the first tender, again seeking cooperation for the 

production of fractionated blood plasma. Diag Human again 

submitted a bid. But the Ministry rejected the company’s bid 

because it relied on a third party (Novo Nordisk) for 

fractionation. 

While the second tender was pending, Diag Human 

alleges the Ministry sent a letter to Novo Nordisk that has 

become the focal point of this dispute. The letter informed 

Novo Nordisk that Diag Human had not received the contract 

because of the Ministry’s concerns over the company’s 

business ethics. Diag Human says that this letter caused 

Novo Nordisk to discontinue its business relationship with 

Diag Human, Pl.’s Opp. at 7; Def.’s Mem. at 29, which led 

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directly to the collapse of Diag Human’s business in the 

Czech Republic. Compl. ¶ 9; Pl.’s Opp. at 8; Def.’s Mem. at 

2. According to Diag Human, “[t]he clear intention of the 

letter was to cripple Diag Human’s ability to perform its 

obligations with the Czech Republic by having Novo Nordisk 

cease doing business with Diag Human.” Diag Br. at 17. As 

a result, Diag Human could no longer perform under the 

Framework Agreement, which freed the Ministry to pursue 

other options for obtaining fractionated blood.

In 1996, Diag Human sued the Ministry in the Prague 

Commercial Court over the events outlined above, and the 

parties agreed to resolve their dispute in arbitration. The 

arbitration ended in 2008, with the tribunal concluding that

the Czech Republic and the Ministry had breached their duties 

to Diag Human, resulting in commercial losses. The tribunal 

awarded damages and interest totaling more than $325 million 

to Diag Human.

Diag Human then filed suit in the district court for the 

District of Columbia, seeking to enforce the 2008 arbitration 

award against the Czech Republic. Diag Human invoked the 

Federal Arbitration Act, 9 U.S.C. § 201, which, among other 

things, codifies the United Nations Convention on the 

Recognition and Enforcement of Foreign Arbitral Awards 

(the “New York Convention”).

The district court, however, dismissed the case sua 

sponte for lack of subject matter jurisdiction. The district 

court concluded that the relationship between Diag Human 

and the Ministry was not “commercial” in nature, and 

therefore the New York Convention did not 

apply. Additionally, the district court concluded the Czech 

Republic had not waived its sovereign immunity under the 

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terms of the Foreign Sovereign Immunity Act, 28 U.S.C. §

1605(a)(1).

II

We review a district court’s dismissal of a case for lack 

of subject matter jurisdiction de novo. Fisher-Cal Industries, 

Inc. v. United States, 747 F.3d 899, 902 (D.C. Cir. 

2014). Where jurisdiction is sought over a foreign sovereign 

for the enforcement of an arbitral award, we have held two 

conditions must be satisfied: “First, there must be a basis 

upon which a court in the United States may enforce a foreign 

arbitral award; and second, [the foreign sovereign] must not 

enjoy sovereign immunity from such an enforcement 

action.” Creighton Ltd. v. Gov’t of the State of Qatar, 181 

F.3d 118, 121 (D.C. Cir. 1999). Here, we find these two 

conditions satisfied. For reasons that will be apparent, we 

will proceed in reverse order.

Absence of sovereign immunity. The Foreign Sovereign 

Immunities Act “provides the sole basis for obtaining 

jurisdiction over a foreign state in the courts of this country.” 

Argentine Republic v. Amerada Hess Shipping Co., 488 U.S. 

428, 443 (1988). It “bars federal and state courts from 

exercising jurisdiction when a foreign state is entitled to 

immunity, and ... confers jurisdiction on district courts to 

hear suits ... when a foreign state is not entitled to 

immunity.” Id. at 434 (emphasis in original). As relevant 

here, the FSIA’s arbitration exception to sovereign immunity 

provides that 

[a] foreign state shall not be immune from the 

jurisdiction of courts of the United States ... in any 

case ... in which the action is brought ... to enforce 

an agreement made by the foreign state with or for 

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the benefit of a private party to submit to arbitration 

any or all differences which have arisen or which 

may arise between the parties with respect to a 

defined legal relationship, whether contractual or 

not, ... if ... the agreement or award is or may be 

governed by a treaty or other international agreement 

in force for the United States calling for the 

recognition and enforcement of arbitral awards.

28 U.S.C. § 1605(a)(6). 

Two aspects of that standard are in dispute here:

(1) whether Diag Human shared with the Czech Republic “a 

defined legal relationship, whether contractual or not” and (2) 

whether the arbitration award “is or may be governed by a 

treaty or other international agreement in force for the United 

States.” Id. We answer both of these questions in favor of 

Diag Human and conclude that the arbitration exception of 

the FSIA is satisfied here.

First, the 1990 Framework Agreement defined a legal 

relationship with the Czech Republic beginning in 1990 with 

the Framework Agreement. The agreement set out the 

purposes of the cooperative arrangement between Diag 

Human and the Czech Republic as “ensur[ing] fractionation 

products from frozen human plasma for the needs of 

Czechoslovak health care system” and “equip[ping] 

cooperating transfusion wards with necessary technical 

equipment to increase plasma production possibilities.” JA at 

A765. It listed both of the parties to the arrangement and the 

“[l]egal conditions of the cooperation,” which included two 

Czech statutes. Id. The agreement also detailed the 

obligations of each side. For the Czech Republic, this 

included organizing and examining donors and freezing and 

storing plasma. For Diag Human, it included supplying 

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necessary equipment; collecting, storing, and transporting 

plasma; training staff at Czech transfusion wards; and 

ensuring plasma fractionation in foreign countries. Id. at 

A766. And the agreement made clear that “[t]he 

technological equipment supplied to transfusion wards will be 

paid for with a share, determined in advance, of the total 

volume of plasma prepared for fractionation until the 

equipment is repaid.” Id.

For purposes of the FSIA’s arbitration exception, we 

need not determine if the Framework Agreement constituted a 

contract. We need only determine that the Framework 

Agreement created “a defined legal relationship, whether 

contractual or not,” 28 U.S.C. § 1605(a)(6), and we conclude 

it did. The agreement explicitly contemplated which parties it 

would obligate, the extent of the obligations, the remuneration 

exchanged for meeting the obligations, and the legal 

framework to govern the arrangement. In this way, the 

agreement defined a relationship between the parties, and 

given the subject matter of reciprocal obligations and 

responsibilities, we have no trouble concluding the 

relationship was legal in nature. Whether the agreement was 

lacking in other typical contract forms is of no relevance here; 

the FSIA explicitly contemplates that some legal relationships 

will qualify under § 1605(a)(6) despite not rising to the 

formality of a contractual arrangement. The relatively 

informal arrangement of the Framework Agreement, then, is 

enough to establish a “legal relationship” of the kind 

necessary for the FSIA’s arbitration exception to apply. 

The Czech Republic contends any legal relationship it 

shared with Diag Human had ended by the time this dispute 

arose and that its “interest in developing cooperation . . . to

ensure [the availability of] fractionation products . . . never 

came to fruition.” Response Br. at 21. Yet this contention 

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rings hollow since by all accounts Diag Human did supply the 

necessary training, technology, and coordination required for 

modernizing the Czech Republic’s plasma system. That 

kind of performance is hardly consistent with a fruitless 

arrangement. And Diag Human also “possessed all of the 

necessary administrative permits of the [Czech Republic] to 

buy plasma” and “was treated as a priority on the Czech 

market,” which further indicates that the Czech government 

knew of and supported Diag Human’s efforts to meet its 

obligations under the Framework Agreement. JA at 

A112. Moreover, since the agreement was open-ended, we 

cannot conclude that it ended at any time prior to the 1992 

letter that is the subject of this dispute. Thus, we conclude 

that Diag Human and the Czech Republic shared a legal 

relationship at the time of the events giving rise to this case.

Second, Diag Human has amply demonstrated that its 

arbitration award “may be governed by a treaty or other 

international agreement,” namely, the New York 

Convention. 28 U.S.C. § 1605(a)(6). The New York 

Convention is a multilateral treaty providing for “the 

recognition and enforcement of arbitral awards” across 

international borders. Convention on the Recognition and 

Enforcement of Foreign Arbitral Awards (“New York 

Convention”), Art. I(1), 21 U.S.T. 2517 (1970). Both the 

Czech Republic and the United States are signatories. In the 

United States, Congress has codified the Convention in the 

Federal Arbitration Act, 9 U.S.C. §§ 202 et seq., which 

provides that any “action or proceeding falling under the 

Convention shall be deemed to arise under the laws and 

treaties of the United States” and that the “district courts of 

the United States . . . shall have original jurisdiction over such 

an action or proceeding, regardless of the amount in 

controversy.” Id. § 203. In the United States, an arbitral 

award falls under the Convention when it “aris[es] out of a 

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legal relationship, whether contractual or not, which is 

considered as commercial.” Id. § 201. The “commercial” 

aspect of this standard is optional—chosen (or not) by each 

individual signatory. The United States has adopted this 

commercial restriction.

Here, we conclude Diag Human has satisfied its burden 

of showing that its arbitration award “may be governed” by 

the New York Convention because, as explained above, Diag 

Human had a legal relationship with the Czech Republic, and 

additionally, that relationship was commercial in nature. We 

have previously noted that the Convention does not define the 

word “commercial,” and so we have given that word its 

established meaning as a term of art in its field. Belize Soc. 

Dev. Ltd. v. Belize, 794 F.3d 99, 103−04 (D.C. Cir. 2015). In 

the field of international arbitration, “commercial” refers to 

“‘matters or relationships, whether contractual or not, that 

arise out of or in connection with commerce.’” Id. at 104

(quoting Restatement (Third) of U.S. Law of Int’l Comm. 

Arbitration § 1-1 (2012)). Accordingly, a matter may be 

commercial even if not contractual, “so long as it has a 

connection with commerce.” Id.

Diag Human’s legal relationship with the Czech Republic 

through the Framework Agreement was commercial in 

nature. The provision of healthcare technology and medical 

services has an obvious connection to commerce. Deane 

Waldman, Is Health Care ‘Commerce’?, THE AMERICAN 

THINKER (Apr. 15, 2012), http://www.americanthinker.com

/articles/2012/04/is_health_care_commerce.html. Indeed, 

health care, including medical devices and medical care

services, accounts for a significant portion of the global 

economy, totaling nearly $6.5 trillion in expenditures last year 

alone. Spending on Health: A Global Overview, WORLD 

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HEALTH ORGANIZATION (Apr. 2012) http://www.who.int

/mediacentre/factsheet/fs319/en/. 

Under the Framework Agreement, Diag Human agreed to 

supply commercial goods to the Czech Republic in the form 

of blood plasma technologies and equipment. The fact that 

the Czech Republic agreed to fund Diag Human’s investment 

in blood plasma technologies through a percentage of blood 

plasma collected rather than through an up-front payment 

does not change the commercial nature of the relationship, 

which turned in large part on the transmission of valuable 

commodities from one party to the other. While other 

services were also exchanged under the Agreement, it is 

enough that some commodities were exchanged as 

well. “Commercial” merely means “matters which have a 

connection to commerce,” and the Framework Agreement is 

clearly connected to commerce. Any “argument to the 

contrary will not sell.” Belize Soc. Dev. Ltd., 794 F.3d at 105.

Thus, we find for Diag Human on both of the contested 

FSIA issues here: Diag Human and the Czech Republic 

shared a legal relationship, and their arbitration “may” be 

governed by the New York Convention. The Czech Republic 

is not entitled to sovereign immunity in this matter under the 

FSIA’s arbitration exception. 28 U.S.C. § 1605(a)(6). 

Basis for a U.S. Court to enforce an arbitration award. To 

satisfy our standard for subject matter jurisdiction in an 

international arbitration case against a foreign sovereign, we 

must assure ourselves not only that the foreign sovereign is 

not entitled to sovereign immunity, but also that a basis exists 

upon which “a court in the United States may enforce [the] 

foreign arbitral award.” Creighton Ltd., 181 F.3d at 121. Our 

FSIA analysis in the previous section answers this 

question. We have already established that the New York 

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Convention, as codified by the United States, grants federal 

courts jurisdiction over arbitration disputes that fall within its 

ambit. 9 U.S.C. § 203. And we have established that in the 

United States, an arbitral award falls under the Convention 

when it “aris[es] out of a legal relationship, whether 

contractual or not, which is considered as commercial.” Id. § 

202. Here, Diag Human’s relationship with the Czech 

Republic qualifies as a commercial legal relationship, and the 

arbitration at issue here arises out of that commercial legal 

relationship. A legal basis exists for federal courts to enforce 

this arbitration award, and so we are satisfied that subject 

matter jurisdiction exists.

The dissent sees this matter differently not because it 

disagrees with our analysis here, but because it believes that 

analysis rests on our resolution of disputed facts, facts which 

the district court resolved and to which resolution we are 

bound to defer. Dissent Op. at 1. But the dissent confuses 

disputed facts with the disputed legal consequences of facts. 

The district court determined that a legal relationship did not 

exist between these parties. That conclusion is not a factual 

one, but a legal conclusion about the importance attributed to 

certain facts under the law. The relevant facts here are not in 

dispute—the parties agree about the existence of the 

Framework Agreement (just not its legal consequences), 

about the conduct of the two tender bids (just not why those 

bids took place or how they were awarded), and Diag’s 

performance of certain blood services in the country (just not 

whether that performance was relevant to establishing a legal 

relationship). We have resolved only disputed questions of 

law, and as to those questions, we appropriately review the 

district court’s decision de novo. 

We wrap-up by addressing an issue that arose at oral 

argument: whether the arbitration award to be enforced here 

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is final and how finality might (or might not) affect the 

resolution of this appeal. Though not covered in the briefing, 

it seems the arbitration award Diag Human obtained may 

have been subsequently reversed by an appellate arbitration 

panel, although the legitimacy of that reversal remains 

disputed between the parties. This appeal, however, concerns 

only whether the district court possessed subject matter 

jurisdiction to hear the dispute over the arbitral award. We 

have answered that question, and nothing about our holding 

suggests an outcome on the merits one way or the 

other. Whether the arbitration award is final will be a 

question going to the merits of the case, as it could determine 

whether the arbitration award can be enforced or not. Our 

opinion today expresses no view on the matter. It is enough 

for us to establish that the district court possesses subject 

matter jurisdiction to proceed with this case.

III

For these reasons, we reverse the holding of the district 

court and this case is remanded for further proceedings 

consistent with this opinion.

So ordered.

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SENTELLE, Senior Circuit Judge, dissenting: In reversing 

the district court’s dismissal for lack of jurisdiction, the 

majority discerns error both in the district court’s 

determination that the dispute did not come within the New 

York Convention and that the Czech Republic had not 

otherwise waived its sovereign immunity under the Foreign 

Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1605(a)(1). 

See Maj. Op. at 6. In so concluding, the majority holds that 

Diag Human and the Czech Republic had a commercial legal 

relationship at the time this dispute arose, thereby bringing the 

arbitration award at issue within the scope of the FSIA and 

the New York Convention. See 28 U.S.C. § 1605(a)(6); 9 

U.S.C. § 202. I see no error in the district court’s finding that 

any legal relationship between Diag Human and the Czech 

Republic ended before the present dispute. Nor do I conclude

that the Czech Republic has otherwise waived its sovereign 

immunity. I would therefore affirm the district court.

We stated in Herbert v. Nat’l Acad. of Sciences, 974 F.2d 

192, 197 (D.C. Cir. 1992), that the procedural posture by 

which a district court considers subject-matter jurisdiction

“has a profound effect on the manner in which this Court will 

review its disposition.” Where the district court relies only on 

“undisputed facts within or outside the pleadings,” our review 

is necessarily de novo. Id. “If, however, the trial court rests 

not only upon undisputed statements, but determines disputed 

factual issues, we will review its findings as we would any 

other district court’s factual determinations: accepting them 

unless they are ‘clearly erroneous.’” Id. These principles 

suffice to dispose of this case.

First, the district court did not clearly err when it found 

that any legal relationship between Diag Human and the 

Czech Republic ended before the dispute arose. Diag 

Human’s complaint nowhere references a commercial 

relationship between the Czech Republic and Diag Human. 

See J.A. 388-96. Instead, the complaint avers that the Czech 

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Republic’s “actions had illicitly disrupted cooperation 

between Diag Human and a second company, Novo 

Nordisk, . . . causing it eventually to shut down.” J.A. 390

¶ 9. The district court so concluded when it dismissed Diag 

Human’s complaint sua sponte. See Diag Human S.E. v. 

Czech Republic-Ministry of Health, 64 F. Supp. 3d 22, 29 

(D.D.C. 2014) (“Before entering into the Arbitration 

Agreement, plaintiff and defendant did not have any legal 

relationship, let alone a commercial one.”). 

Only with its Rule 59(e) motion for reconsideration did 

Diag Human provide any evidence, or even an allegation, that 

it had an ongoing legal relationship with the Czech Republic. 

See J.A. 712-14. Specifically, Diag Human presented the 

Declaration of Joseph Stava, which supposedly establishes 

such a relationship “through a cooperation program and 

Framework Agreement between the Ministry and Diag 

Human.” J.A. 813. The district court considered the 

statements in the Stava Declaration and, based on those 

allegations, agreed “that at one time there was a commercial 

relationship between Diag Human and the Ministry.” J.A. 

814 (emphasis in original). However, the district court also 

found that “the parties’ commercial relationship changed over 

time” such that “the commercial relationship between the 

parties ended before the dispute at issue in this case arose in 

1992.” Id.

Because the district court resolved disputed issues of fact 

when it dismissed Diag Human’s complaint for lack of 

subject-matter jurisdiction, we review those findings for clear 

error. Herbert, 974 F.2d at 197. I see none. The Stava 

Declaration contains myriad facts suggesting that Diag 

Human’s relationship with the Czech Republic ended prior to 

the dispute. For example, the declaration states that the 

Ministry of Health “decided to open a tender for bids for a 

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relatively small portion of the work that already was covered 

by the Framework Agreement,” suggesting that it did not see 

itself as bound by that agreement. J.A. 740 ¶ 14. 

Furthermore, the Ministry of Health allegedly “aided” Diag 

Human’s competitors “to discredit Diag.” Id. at 741 ¶ 17. 

The Ministry did not award an initial tender to Diag Human 

and “took further steps to cut Diag out as a competitor in the 

market” while transferring control of Czech hospitals to state 

regional offices. Id. at 742 ¶¶ 18-19. The Ministry also “sent 

a directive ordering all hospitals to deal exclusively 

with . . . parties” other than Diag Human. Id. at 743 ¶ 20. 

When the Ministry announced a new tender in 1991 for blood 

plasma services supposedly covered by the agreement with 

Diag Human, Diag’s bid was unsuccessful. Id. ¶ 22. If 

anything, the Stava Declaration suggests that the Czech 

Republic affirmatively disavowed any legal relationship it had 

with Diag Human. Diag’s alternative argument that its 

participation in the tender bids sufficed to create a legal 

relationship is specious. Cf. United States v. Comm. Am. 

Barge Line Co., 424 F. Supp. 453, 456 (E.D. Mo. 1977) 

(“[T]he government is under no obligation to accept bids and 

[] no legal relationship arises from the submission of the bid.” 

(citation omitted)). 

The majority replaces the district court’s fact-finding 

with its own view that “by all accounts Diag Human did

supply the necessary training, technology, and coordination 

required for modernizing the Czech Republic’s plasma 

system.” Maj. Op. at 9 (emphasis in original); see also id. 

(“Moreover, since the agreement was open-ended, we cannot 

conclude that it ended at any time prior to the 1992 letter that 

is the subject of this dispute.”). Even disregarding the 

problem of whether unilateral performance can establish a 

legal relationship, “[f]actfinding is the basic responsibility of 

district courts, rather than appellate courts . . . .” PullmanUSCA Case #14-7142 Document #1615464 Filed: 05/31/2016 Page 16 of 19
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Standard v. Swint, 456 U.S. 273, 291 (1982) (citation and 

internal quotation marks omitted). Taking the facts as the 

district court found them, the New York Convention does not 

apply to Diag Human’s claims, meaning that the FSIA, 28 

U.S.C. § 1605(a)(6), provides no basis for the district court’s 

jurisdiction. Accordingly, I would affirm. 

Second, in my view, the district court did not err in 

holding that the Czech Republic did not otherwise waive its 

sovereign immunity. As the majority acknowledges, “The 

Foreign Sovereign Immunities Act ‘provides the sole basis for 

obtaining jurisdiction over a foreign state in the courts of this 

country.’” Maj. Op. at 6 (quoting Argentine Republic v. 

Amerada Hess Shipping Corp., 488 U.S. 428, 443 (1989)). 

Therefore, as the district court held, if the current dispute is 

not arbitrable under the New York Convention, then the 

district court and derivatively this court have no jurisdiction 

unless the dispute comes within one of the other exceptions to 

foreign sovereign immunity recognized in the statute. The 

only other exception asserted before us is that created by 28 

U.S.C. § 1605(a)(1), which applies to “any case . . . in which 

the foreign state has waived its immunity either explicitly or 

by implication . . . .” 

I see no error in the district court’s conclusion that the 

Czech Republic had not explicitly or by necessary implication 

waived its sovereign immunity. Diag Human only argues 

implied waiver under § 1605(a)(1). See Appellant’s Br. at 48. 

“We . . . follow[] the ‘virtually unanimous’ precedents 

construing the implied waiver provision narrowly.” 

Creighton Ltd. v. Gov’t of State of Qatar, 181 F.3d 118, 122 

(D.C. Cir. 1999) (citation omitted). Specifically, “we have 

held that implicit in § 1605(a)(1) is the requirement that the 

foreign state have intended to waive its sovereign immunity.” 

Id. That is to say, “[a]n implied waiver depends upon the 

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foreign government’s having at some time indicated its 

amenability to suit.” Id. (citation omitted). Because the 

district court and I agree that the New York Convention 

provides no exception to sovereign immunity for this case, 

any implied waiver of the immunity must come from 

elsewhere. The only “elsewhere” suggested by Diag Human 

is the fact that in the early stages of this litigation, the 

Republic moved to dismiss under Rule 12(b)(6) and for forum

non conveniens without raising sovereign immunity. I do not 

agree that this is sufficient foundation to constitute an implied 

waiver. 

Courts have found waivers of implied sovereign 

immunity in three circumstances: “(1) a foreign state has 

agreed to arbitration in another country; (2) a foreign state has 

agreed that the law of a particular country governs a contract; 

or (3) a foreign state has filed a responsive pleading in an 

action without raising the defense of sovereign immunity.” 

Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905 

F.2d 438, 444 (D.C. Cir. 1990).

While the list from Foremost-McKesson is not 

necessarily exhaustive, it serves to illustrate what is not 

present in the instant case. For the reasons set forth above,

the New York Convention does not apply to Diag Human’s 

arbitral award, meaning the arbitration circumstance is not 

present. Appellant makes no argument that the second 

circumstance governs. As to the third circumstance, a motion 

to dismiss is not a responsive pleading. Cf. Ashraf-Hassan v. 

Embassy of Fr., 40 F. Supp. 3d 94, 101 (D.D.C. 2014) (“[A]

motion to dismiss that omits mention of immunity will not 

provide sufficient proof of such a conscious decision.”). 

For the reasons stated above, I believe that the New York 

Convention is inapplicable to this case, and Diag Human 

USCA Case #14-7142 Document #1615464 Filed: 05/31/2016 Page 18 of 19
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otherwise provides no compelling argument to rebut the 

presumed immunity of a sovereign. I therefore agree with the 

district court’s conclusion that “[n]one of the bases to find an 

implied waiver exist in this case.” Diag Human, 64 F. Supp. 

3d at 31.

I respectfully dissent.

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