Diag Human S.E. v. Czech Republic - Ministry of H

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.

2

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, Czechoslovakia 1 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.

3

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.

4

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

5

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

6

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

8

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

9

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

10

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

11

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

12

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

13

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.

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

2

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

3

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 . . . .” Pullman-

4

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

5

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

6

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.