Court Opinion

ID: 2718192
Source: CourtListenerOpinion
Date Created: 2014-08-14 22:00:38.706245+00
Date Added: 2024-06-11T12:06:16.303741
License: Public Domain

UNITED STATES DISTRICT COURT
                          FOR THE DISTRICT OF COLUMBIA
____________________________________
                                    )
DIAG HUMAN S.E.,                    )
                                    )
                  Plaintiff,        )
                                    )
      v.                            )              Civil Action No. 13-0355 (ABJ)
                                    )
CZECH REPUBLIC-MINISTRY             )
OF HEALTH,                          )
                                    )
                  Defendant.        )
____________________________________)

                                MEMORANDUM OPINION

       Plaintiff Diag Human filed this case against the Czech Republic Ministry of Health,

seeking to enforce an August 4, 2008 arbitration award related to the Ministry’s alleged

interference into a business relationship between plaintiff and a third party. Compl. ¶ 9 [Dkt.

# 1]. Plaintiff seeks to confirm the award pursuant to the Federal Arbitration Act (“FAA”),

9 U.S.C. §§ 201–08 (2012), which codifies the United Nations Convention on the Recognition

and Enforcement of Foreign Arbitral Awards (“New York Convention”), June 10, 1958, 21

U.S.T. 2518, 330 U.N.T.S. 38. Compl. ¶ 1.

       Defendant moved to dismiss the complaint on numerous grounds, including failure to

state a claim under the New York Convention, the SPEECH Act of 2010, and forum non

conveniens. See Def.’s Mot. to Dismiss Compl. [Dkt. # 16] at 2–3; Mem. of P. & A. in Supp. of

Def.’s Mot. to Dismiss Compl. (“Def.’s Mem.”) [Dkt. # 17] at 11–37. But the Court cannot

address these grounds for dismissal because it has no subject matter jurisdiction in this case.

Plaintiff cites the New York Convention and two exceptions to the Foreign Sovereign

                                              1
Immunities Act (“FSIA”) as its predicates for jurisdiction, Compl. ¶ 2, but after review, the

Court finds that these provisions do not apply. Accordingly, the Court will dismiss this case sua

sponte pursuant to Rule 12(h)(3) of the Federal Rules of Civil Procedure for lack of subject

matter jurisdiction. 1

                                        BACKGROUND

        Plaintiff Diag Human is a corporation organized under the laws of the Principality of

Liechtenstein. Compl. ¶ 6. The Czech Republic is a foreign state, and the Ministry of Health for

the Czech Republic is an agency of the Czech Republic. Id. ¶ 7; Def.’s Mem. at 2. In the 1980s,

Diag Human developed a business model that allowed “currency-deficient Eastern Bloc states to

acquire modern blood plasma technology.” Pl.’s Mem. of P. & A. in Opp. to Def.’s Mot. to

Dismiss Compl. (“Pl.’s Opp.”) [Dkt. # 20] at 5. By 1989, it was one of the world’s largest blood

plasma suppliers with fourteen branches across Europe and in Canada and Singapore. Id. at 6.

After the fall of the Berlin wall, plaintiff sought to enter the Eastern European market and began

to develop its business in Czechoslovakia. Pl.’s Opp. at 6; Def.’s Mem. at 2.

        One of plaintiff’s principal commercial relationships was with the Danish company Novo

Nordisk. Pl.’s Opp. at 6. Diag Human alleges that the Minister of Health for the Czech Republic

sent a letter to Novo Nordisk regarding a public bidding tender for blood plasma products

intended “to dissuade Novo Nordisk from continuing to do business with Diag.” Pl.’s Opp. at 7;

Def.’s Mem. at 29. It contends that the letter contained statements expressing concerns about

Diag Human’s business ethics and credibility, and that this letter caused Novo Nordisk to

discontinue its business relationship with Diag Human. Pl.’s Opp. at 7; Def.’s Mem. at 29.

1       Defendant raised the inapplicability of the New York Convention in its motion to dismiss
but predicated its motion on Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim,
rather than on Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction.
Def.’s Mem. at 11.
                                                2
Plaintiff asserts that the collapse of its business in the Czech Republic was a direct result of the

termination of its relationship with Novo Nordisk. Compl. ¶ 9; Pl.’s Opp. at 8; Def.’s Mem. at 2.

       In 1996, Diag Human commenced an action against defendant in the Prague Commercial

Court, claiming defamation and unfair competition, seeking damages including lost profits. Pl.’s

Opp. at 8, 38. The parties agreed to arbitrate their dispute, and on September 18, 1996, they

entered into a written arbitration agreement (“Arbitration Agreement”). Def.’s Mem. at 2; Pl.’s

Opp. at 8; Arbitration Agreement, Ex. B to Compl. [Dkt. # 1-2] at 2–3. The Arbitration

Agreement sets forth procedures for the arbitration process, covering such matters as the

selection and payment of the arbitrators and the location of the proceedings.            Arbitration

Agreement at 2–3.

       On August 4, 2008, the arbitration panel decided in favor of plaintiff, finding that the

Czech Republic had caused commercial loss to Diag Human. Pl.’s Opp. at 10; Def.’s Mem. at 3.

The final award (“Arbitration Award”) directed defendant to pay Diag Human approximately

$650 million in damages and interest. Pl.’s Opp. at 10. On August 22, 2008, defendant

requested review of the award pursuant to Article V of the Arbitration Agreement. Def.’s Mem.

at 4; Pl.’s Opp. at 13. A dispute concerning the composition of the arbitration review panel

lasted for more than two years, but in 2013, it was finally resolved, and a review panel was

convened. Def.’s Mem. at 4–7; Pl.’s Opp. at 13–16.

       While the dispute regarding the appointment of the arbitration review panel was pending

in the Czech courts, plaintiff applied to this Court and to the courts of Austria, France, the United

Kingdom, Luxembourg, and Switzerland for orders to enforce the Arbitration Award under the

                                                 3
New York Convention. Def.’s Mem. at 7; Pl.’s Opp. at 18–19. To date, it appears that no court

has ordered enforcement of the award. 2

                                  STANDARD OF REVIEW

       “Federal courts are courts of limited jurisdiction.       They possess only that power

authorized by Constitution and statute, which is not to be expanded by judicial decree. It is to be

presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the

contrary rests upon the party asserting jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am.,

511 U.S. 375, 377 (1994) (citations omitted). In addition, “‘[i]t is axiomatic that subject matter

jurisdiction may not be waived, and that courts may raise the issue sua sponte.’” NetworkIP,

LLC v. FCC, 548 F.3d 116, 120 (D.C. Cir. 2008), quoting Athens Cmty. Hosp., Inc. v. Schweiker,

686 F.2d 989, 992 (D.C. Cir. 1982). Indeed, a federal court must raise the issue because it is

“forbidden – as a court of limited jurisdiction – from acting beyond [its] authority.” Id., citing

Akinseye v. District of Columbia, 339 F.3d 970, 971 (D.C. Cir. 2003).

       A district court must dismiss a complaint sua sponte when it is evident that the court

lacks subject matter jurisdiction. Fed. R. Civ. Pro. 12(h)(3) (“If the court determines at any time

that it lacks subject-matter jurisdiction, the court must dismiss the action.”); Arbaugh v. Y&H

Corp., 546 U.S. 500, 514 (2006) (“when a federal court concludes that it lacks subject-matter

2       On October 29, 2012, the Court of Appeal in Vienna dismissed the claim filed in Austria
because the Arbitration Award had not yet become final or enforceable under the New York
Convention. Def.’s Mem. at 17. The Austria Supreme Court affirmed this decision on April 16,
2013. Id.; see also Ex. W to Def.’s Mot. [Dkt. # 16-23]. The Court of Appeal of the French
Republic in Paris dismissed the claim to enforce the arbitration award because it found that the
intent of the Arbitration Agreement was to deprive the parties of a final award if an application
for review was made in the agreed upon timeframe. Def.’s Mem. at 17; see also Ex. V to Def.’s
Mot. [Dkt. # 16-22]. On March 5, 2014, the French Supreme Court dismissed Diag Human’s
complaint. Def.’s Second Suppl. to Mot. to Dismiss Compl. [Dkt. # 34]. On June 24, 2013, the
Tribunal of First Instance in Geneva, Switzerland declared the Arbitration Award unenforceable
in Switzerland. Id.; see also Ex. X to Def.’s Mot. [Dkt. # 16-24].

                                                4
jurisdiction, the court must dismiss the complaint in its entirety”); see also Evans v. Suter, No.

09-5242, 2010 WL 1632902, at *1 (D.C. Cir. Apr. 2, 2010); Scholastic Entm’t, Inc. v. Fox

Entm’t Grp., Inc., 336 F.3d 982, 985 (9th Cir. 2003); Zernial v. United States, 714 F.2d 431,

433–34 (5th Cir. 1983).

       In evaluating whether a dismissal for lack of subject matter jurisdiction under Rule

12(b)(1) is appropriate, the Court treats the complaint’s factual allegations as true and must grant

the plaintiff “the benefit of all inferences that can be derived from the facts alleged.” Barr v.

Clinton, 370 F.3d 1196, 1199 (D.C. Cir. 2004). Nevertheless, the Court need not accept factual

inferences drawn by the plaintiff if those inferences are unsupported by facts alleged in the

complaint, nor must the Court accept plaintiff’s legal conclusions. Speelman v. United States,

461 F. Supp. 2d 71, 73 (D.D.C. 2006).

       Under Rule 12(b)(1), the plaintiff bears the burden of establishing jurisdiction by a

preponderance of the evidence. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992);

Shekoyan v. Sibley Int’l Corp., 217 F. Supp. 2d 59, 63 (D.D.C. 2002). Because “subject-matter

jurisdiction is an ‘Art[icle] III as well as a statutory requirement . . . no action of the parties can

confer subject-matter jurisdiction upon a federal court.’” Akinseye v. District of Columbia, 339
F.3d 970, 971 (D.C. Cir. 2003), quoting Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de

Guinee, 456 U.S. 694, 702 (1982).

       When considering dismissal for lack of jurisdiction, the court “is not limited to the

allegations of the complaint.” Hohri v. United States, 782 F.2d 227, 241 (D.C. Cir. 1986),

vacated on other grounds, 482 U.S. 64 (1987). Rather, a court “may consider such materials

outside the pleadings as it deems appropriate to resolve the question of whether it has jurisdiction

to hear the case.” Scolaro v. D.C. Bd. of Elections & Ethics, 104 F. Supp. 2d 18, 22 (D.D.C.

                                                  5
2000), citing Herbert v. Nat’l Acad. of Sciences, 974 F.2d 192, 197 (D.C. Cir. 1992); see also

Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005).

                                           ANALYSIS

        In determining whether a district court has subject matter jurisdiction in an action

seeking to enforce a foreign arbitral award against a foreign sovereign, the D.C. Circuit has

stated that two requirements 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 state] must

not enjoy sovereign immunity from such an enforcement action.” Creighton Ltd. v. Gov’t of

State of Qatar, 181 F.3d 118, 121 (D.C. Cir. 1999).

       I.      The New York Convention

       Diag Human asserts that the arbitral award may be enforced under U.S. law pursuant to

the New York Convention. Compl. ¶ 2. The New York Convention is a multilateral treaty

providing for “the recognition and enforcement of arbitral awards made in the territory of a State

other than the State where the recognition and enforcement of such awards are sought.” New

York Convention, art. I.1, June 10, 1958, 21 U.S.T. 2517. The Federal Arbitration Act, 9 U.S.C.

§§ 201–08, which codifies the New York Convention into U.S. law, declares that “[a]n action or

proceeding falling under the Convention shall be deemed to arise under the laws and treaties of

the United States. The district courts . . . shall have original jurisdiction over such an action or

proceeding, regardless of the amount in controversy.” 9 U.S.C. § 203.

       Section 202 of the FAA specifies the type of arbitration agreements and arbitral awards

that are covered by the Convention:

               An arbitration agreement or arbitral award arising out of a legal
               relationship, whether contractual or not, which is considered as
               commercial, including a transaction, contract, or agreement described in
               section 2 of this title, falls under the Convention.

                                                 6
9 U.S.C. § 202. The Second Circuit utilizes a four-part test for when the Convention and FAA

will apply:

                (1) there is a written agreement; (2) the writing provides for arbitration in
                the territory of a signatory of the convention; (3) the subject matter is
                commercial; and (4) the subject matter is not entirely domestic in scope.

U.S. Titan, Inc. v. Guangzhou Zhen Hua Shipping Co., 241 F.3d 135, 146 (2d Cir. 2001); see

also Nanosolutions, LLC v. Prajza, 793 F. Supp. 2d 46, 53 (D.D.C. 2011). If each requirement is

satisfied, then the agreement properly falls under the New York Convention. See Ledee v.

Ceramiche Ragno, 684 F.2d 184, 186–87 (1st Cir. 1982).

       With respect to the third requirement – the commercial nature of the matter – courts have

explained that the “subject matter of the relationship between the parties must be commercial.”

JSC Surgutneftegaz v. President & Fellows of Harvard Coll., No. 04 Civ. 6069 (RCC), 2005 WL
1863676, at *2 (S.D.N.Y. Aug. 3, 2005) (emphasis added); see also Freudensprung v. Offshore

Technical Servs., Inc., 379 F.3d 327, 339 (5th Cir. 2004); Prograph Int’l Inc. v. Barhydt, 928 F.

Supp. 983, 988-89 (N.D. Cal. 1996). The Fifth Circuit has interpreted a “commercial legal

relationship” to mean “‘a transaction, contract, or agreement described in section 2 of [Title 9]’ –

that is, either a maritime transaction or a contract involving commerce.” Freudensprung, 379
F.3d at 339. Further, the FAA provides that:

                “commerce”, as herein defined, means commerce among the several
                States or with foreign nations, or in any Territory of the United States or in
                the District of Columbia, or between any such Territory and another, or
                between any such Territory and any State or foreign nation, or between the
                District of Columbia and any State or Territory or foreign nation . . . .

9 U.S.C. § 1.

       Here, the first, second, and fourth requirements of the Second Circuit’s test have been

satisfied: there is a written arbitration agreement, the arbitration occurred in a territory of a

                                                  7
signatory to the Convention, and the dispute is not entirely domestic in scope. See Arbitration

Agreement, Ex. B to Compl. at 2–3. But the Czech Republic argued that the third requirement

has not been met, and the claims undergoing arbitration were “traditional tort-based claims,” not

commercial ones. Def.’s Mem. at 28–31. Plaintiff argues that because the award relates to a

“commercial dispute,” and damages were awarded based on the claim of unfair economic

competition, the award properly falls under the New York Convention. Pl.’s Opp. at 38–39.

       The Court finds that a plain reading of the text of the treaty shows that the Convention

does not apply: the arbitration and award did not “aris[e] out of a legal relationship . . . which is

considered as commercial.” 9 U.S.C. § 202. While the arbitration concerned defendant’s

alleged interference in plaintiff’s commercial activities, and it sought compensation for economic

harm, “the subject matter of the relationship between the parties” is not commercial, JSC

Surgutneftegaz, 2005 WL 1863676, at *2, and the arbitration did not arise out of a commercial

legal relationship. Before entering into the Arbitration Agreement, plaintiff and defendant did

not have any legal relationship, let alone a commercial one. While Diag Human endeavored to

extend its business into the Czech Republic, it did not have any contract, agreement, or

transaction with the Czech Republic that could be considered to be commercial. Def.’s Mem.

at 2.; Pl.’s Opp. at 6. Plaintiff’s issue with the state arose when the Minister of Health allegedly

interfered with plaintiff’s business relationship with a private party – Novo Nordisk – by sending

the letter that plaintiff claims was defamatory. Def.’s Mem. at 2; Pl.’s Opp. at 7. But there were

no commercial dealings between plaintiff and the Czech Republic itself. Although this alleged

interference had commercial consequences for the company, and the arbitration panel ultimately

awarded damages to address commercial losses, there was no pre-existing legal relationship of

commercial subject matter between Diag Human and the Czech Republic.

                                                 8
       Plaintiff argues that because the award was rendered under numerous provisions of the

Czech Commercial Code that the dispute itself is commercial in nature. Pl.’s Opp. at 38.

But it is the nature of the relationship between the parties, not the nature of their dispute, that

determines whether the third requirement is satisfied. See, e.g., Freudensprung, 379 F.3d at 339

(finding a commercial legal relationship where the plaintiff had a “Consultant’s

Agreement” with the defendant to provide professional services); Bautista v. Star Cruises, 396
F.3d 1289, 1300 (11th Cir. 2005) (finding that the arbitration provisions in a cruise ship

crewmembers’ employment contracts constitutes a “commercial legal relationship[] within the

meaning of the Convention Act”). The fact that Diag Human initially brought the dispute before

a commercial court in Prague or that the arbitration was predicated upon commercial laws of the

Czech Republic does not transform the subject matter of the legal relationship between the

parties. Because the subject matter of the relationship between Diag Human and the Czech

Republic is not commercial, this action falls outside the scope of the New York Convention.

       II.     The Foreign Sovereign Immunities Act

       The second requirement for establishing subject matter jurisdiction against an

instrumentality of a foreign government is that the foreign state must not enjoy sovereign

immunity. See Creighton, 181 F.3d at 121. “In the United States, there is only one way for a

court to obtain jurisdiction over a foreign state and it is not a particularly generous one – the

FSIA.” Peterson v. Royal Kingdom of Saudi Arabia, 416 F.3d 83, 86 (D.C. Cir. 2005).

       Under the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1602–11 (2012), “a foreign

state is presumptively immune from the jurisdiction of United States courts,” and “unless a

specified exception applies, a federal court lacks subject-matter jurisdiction over a claim

against a foreign state.” Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993); see also 28 U.S.C.

                                                9
§§ 1604–05. The FSIA provides “the sole basis for obtaining jurisdiction over a foreign state in

the courts of this country.” Nelson, 507 U.S. at 355, quoting Argentine Republic v. Amerada

Hess Shipping Corp., 488 U.S. 428, 443 (1989) (internal quotation marks omitted). Because

“subject matter jurisdiction in any such action depends on the existence of one of the specified

exceptions . . . [a]t the threshold of every action in a District Court against a foreign state . . . the

court must satisfy itself that one of the exceptions applies.” Verlinden B.V. v. Cent. Bank of

Nigeria, 461 U.S. 480, 493–94 (1983). In other words, U.S. courts have no power to hear a

case brought against a foreign sovereign unless one of the exceptions applies.

        A “foreign state” includes “a political subdivision of a foreign state or an agency or

instrumentality of a foreign state.” 28 U.S.C. § 1603(a). An “agency or instrumentality of a

foreign state” is, in part, defined as “an organ of a foreign state or political subdivision thereof.”

Id. § 1603(b)(2). Here, the Ministry of Health is an agency of the foreign state of the Czech

Republic, and therefore properly falls within the purview of the FSIA.

        Plaintiff asserts that the Court has subject matter jurisdiction in this case, in part, pursuant

to sections 1605(a)(1) and (6) of the FSIA. Compl. ¶ 2. Section 1605(a)(1) provides that a

foreign state shall not be immune in any case in which the foreign state has explicitly or

implicitly waived its immunity. Id. § 1605(a)(1). Section 1605(a)(6) provides an exception to

foreign sovereign immunity for actions to confirm certain arbitration awards.                   See id.

§ 1605(a)(6). Although defendant does not challenge plaintiffs’ stated basis for subject matter

jurisdiction, the Court must satisfy itself that one of the exceptions to sovereign immunity

applies, Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. at 493–94, and it finds that neither

exception applies in this case.

                                                   10
               A. Section 1605(a)(1) Does Not Apply Because Defendant Has Not Explicitly
                  or Implicitly Waived its Sovereign Immunity.

       Under 28 U.S.C. § 1605(a)(1), “a state is not immune from suit in any case ‘in which the

foreign state has waived its immunity either explicitly or by implication.’”          World Wide

Minerals, Ltd. v. Republic of Kaz., 296 F.3d 1154, 1161 (D.C. Cir. 2002). The U.S. Court of

Appeals for the D.C. Circuit has found implied waivers in three circumstances: when “(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.” 3 Foremost-McKesson,

Inc. v. Islamic Republic of Iran, 905 F.2d 438, 444 (D.C. Cir. 1990), citing S. Rep. No. 94-1310,

at 18 (1976); H.R. Rep. No. 94-1487, at 18 (1976), reprinted in 1976 U.S.C.C.A.N. 6604, 6617.

These three examples demonstrate that the theory of implied waiver contains an intent

requirement, and that a finding of “an implied waiver depends upon the foreign government’s

having at some point indicated its amenability to suit.” Princz v. Fed. Republic of Ger., 26 F.3d
1166, 1174 (D.C. Cir. 1994); see also Frolova v. Union of Soviet Socialist Republics, 761 F.2d
370, 377 (7th Cir. 1985) (noting that courts “rarely find that a nation has waived its sovereign

immunity . . . without strong evidence that this is what the foreign state intended”). Further,

“‘[s]ince the FSIA became law, courts have been reluctant to stray beyond these [three]

3       The D.C. Circuit has suggested that when the New York Convention is a basis for a
claim, that a foreign state has implicitly waived its immunity if it is a signatory to the New York
Convention.      See Creighton, 181 F.3d at 123, quoting Seetransport Wiking Trader
Schiffarhtsgesellschaft MBH & Co., Kommanditgesellschaft v. Navimpex Centrala Navala, 989
F.2d 572, 578 (2d Cir. 1993) (“‘[W]hen a country becomes a signatory to the Convention, by the
very provisions of the Convention, the signatory state must have contemplated enforcement
actions in other signatory states.’”). As discussed above, the New York Convention does not
apply to this case and, accordingly, is not a basis for plaintiff’s claims, so defendant’s sovereign
immunity defense is not implicitly waived on the ground that it is a signatory to the New York
Convention.
                                                11
examples when considering claims that a nation has implicitly waived its defense of sovereign

immunity.’” Princz, 26 F.3d at 1174 (first edit in original), quoting Frolova, 761 F.2d at 377.

       None of the bases to find an implied waiver exist in this case. First, defendant did not

agree to arbitrate in another country; the Arbitration Agreement specified that arbitration would

take place in a location determined by the arbitrators, which was the Czech Republic.

Arbitration Agreement, Ex. B to Compl. at 2–3. Second, plaintiff and defendant did not have a

contract that contained an arbitration clause or choice of law clause within it. See Pl.’s Opp. at

5–8; Def.’s Mem. at 1–2. Rather, a dispute arose between the parties, which they agreed to

arbitrate. Pl.’s Opp. at 5–8; Def.’s Mem. at 1–2. Third, the Czech Republic has not filed the sort

of “responsive pleading” that acts as a waiver by filing to contest jurisdiction on immunity

grounds. Ashraf-Hassan v. Embassy of Fr. in the U.S., No. 11-805 (JEB), 2014 WL 1493210, at

*4 (D.D.C. Apr. 17, 2014); see also Foremost–McKesson, 905 F.2d at 443.

       Although the Czech Republic has filed a motion to dismiss that does not address

sovereign immunity, under the law of this Circuit, that filing does not waive sovereign immunity.

The D.C. Circuit has held that implied waiver requires “a conscious decision [by the sovereign]

to take part in the litigation and a failure to raise sovereign immunity despite the opportunity to

do so.” Foremost-McKesson, 905 F.2d at 444 (internal quotations omitted). Because a motion

to dismiss is not a responsive pleading, “a motion to dismiss that omits mention of immunity will

not provide sufficient proof of such a conscious decision.” Ashraf-Hassan, 2014 WL 1493210,

at *4; see also Gutch v. Fed. Republic of Germany, 444 F. Supp. 2d 1, 9 (D.D.C. 2006)

(overruled on other grounds) (“A motion to dismiss, however, is not a responsive pleading for

the purpose of this exception.”); Canadian Overseas Ores Ltd. v. Compania de Acero del

Pacifico S.A., 727 F.2d 274, 277 (2d Cir. 1984) (stating that because the Federal Rules of Civil

                                                12
Procedure explicitly distinguish between pleadings and motions, “[the court] refuse[s] to hold

that the filing of a variety of motions, including a motion to dismiss, automatically waives the

defense [of sovereign immunity]”).

         A recent case, Ashraf-Hassan v. Embassy of France in the U.S., 2014 WL 1493210

(D.D.C. Apr. 17, 2014), illustrates the type of activity a foreign sovereign must undertake to

implicitly waive sovereign immunity. There, the court held that the FSIA’s implied waiver

exception applied because the defendant had filed a motion to dismiss that specifically conceded

the immunity question, 4 it had filed an answer and a motion for summary judgment, and it

participated in the case through the end of discovery. Id. at *4–5. The court denied the motion

to dismiss that the defendant filed on the eve of trial on immunity grounds, in part, because of the

defendant’s initial concession regarding immunity and its continued participation in the case. Id.

at *5.

         Here, the Czech Republic has filed a motion to dismiss that does not specifically disclaim

immunity, and it has not filed a responsive pleading, such as an answer. Further, there have been

no proceedings beyond briefs and other motions relating to defendant’s motion to dismiss. Thus,

the Court finds that defendant has not made a “conscious decision to take part in the litigation,”

Foremost-McKesson, 905 F.2d at 444, and defendant’s mere failure to address immunity in its

motion to dismiss does not suffice as a “conscious decision” to waive sovereign immunity. See

Ashraf-Hassan, 2014 WL 1493210, at *4. For these reasons, the Court finds that defendant has

not implicitly waived sovereign immunity, and the exception found in section 1605(a)(1) does

not apply.

4      The defendant’s first motion to dismiss stated “it is conceded that [the Embassy’s]
immunity does not apply in this case.” Ashraf-Hassan, 2014 WL 1493210, at *3 (quoting
motion to dismiss).
                                                 13
              B. Section 1605(a)(6) Does Not Apply Because the Arbitration Award Does
                 Not Fall Under the New York Convention.

       In the absence of a waiver, the Court cannot exercise jurisdiction over a foreign state

unless that exercise falls within one of the exceptions set forth in the FSIA. Section 1605(a)(6)

of FSIA states that foreign sovereigns are not immune from suits,

              in which the action is brought, either to enforce an agreement made by the
              foreign state with or for the benefit of a private party to . . . confirm an
              award made pursuant to such an agreement to arbitrate, if (A) the
              arbitration takes place or is intended to take place in the United States, (B)
              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, (C) the underlying claim,
              save for the agreement to arbitrate, could have been brought in a United
              States court under this section or section 1607, or (D) paragraph (1) of this
              subsection is otherwise applicable.

28 U.S.C. § 1605(a)(6).

       Subsection (a)(6)(A) does not apply here because the parties’ arbitration took place in the

Czech Republic.     Id. §1605(a)(6)(A); see Arbitration Agreement, Ex. B to Compl. at 2.

Subsection (a)(6)(C) does not apply because the underlying claim could not have been brought in

a U.S. court under section 1605 or 1607 of FSIA, 5 and plaintiff does not assert that any other

sections apply. 28 U.S.C. §§ 1605, 1607; see Compl. ¶ 2. Section 1605(a)(6)(D) does not apply

because paragraph 1 of section 1605(a) sets forth the waiver exception; and, as discussed above,

defendant has not implicitly or explicitly waived sovereign immunity.

5       Section 1605(a) states a number of other exceptions to foreign state immunity, including:
where the action is based upon a commercial activity or arose in connection to a commercial
activity carried on in the United States by a foreign state, where the claim arose from property
located in the United States, and where money damages are sought for personal injury, death, or
damage to property occurring in the United States. 28 U.S.C. § 1605(a). There are also
exceptions for maritime and terrorism cases. See id. §§ 1605(b), 1605A. Section 1607 is
irrelevant, because it applies only when a foreign state brings an action in a U.S. court and the
opposing party counter-claims. 28 U.S.C. § 1607.
                                               14
        Plaintiff did not specifically invoke the exception in subsection (a)(6)(B), which provides

that immunity does not attach where the arbitration agreement or award is governed by an

international agreement.       But plaintiff relies on the New York Convention as a source of

jurisdiction in this case. Compl. ¶ 2. Since, as explained above, this case does not fall within the

scope of the New York Convention because the parties did not have a commercial relationship,

none of the exceptions listed in 1605(a)(6) apply, and the Court does not have subject matter

jurisdiction over this case.

                                          CONCLUSION

        For the reasons set forth above, the Court will dismiss this case sua sponte pursuant to

Rule 12(h)(3) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction.

Defendant’s motion to dismiss [Dkt. # 16] and motion to strike [Dkt. # 26], and plaintiff’s

motion for leave to file supplement to opposition to motion to dismiss [Dkt. # 35] will be denied

as moot. A separate order will issue.

                                                 AMY BERMAN JACKSON
                                                 United States District Judge

DATE: August 14, 2014

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