[00:00:01] Speaker 01: Case number 17-7154, Dyack-Human-Essie Appellant versus Czech Republic Ministry of Health. [00:00:48] Speaker 04: Good morning, Your Honor. [00:00:49] Speaker 04: I'm Hyman Schaefer for Dyad Newman in Helen. [00:00:54] Speaker 04: Your Honor, we're here for the second time on this case, and it bears repeating what kind of case this really is. [00:01:02] Speaker 04: This is a summary proceeding, supposedly, for confirmation of a foreign arbitral award. [00:01:09] Speaker 04: And in that context, [00:01:11] Speaker 04: we as the holder of the award have a very, very small burden of proof. [00:01:16] Speaker 04: Our burden of proof is to present the award, to present the arbitration agreement, and we get enforcement unless the defendant proves that the award is not available or barred by the convention, through your convention, from being enforced. [00:01:33] Speaker 04: Now, in this case, the decision that we're looking at, the district court [00:01:41] Speaker 04: did something which no other court had ever done, no other person had ever claimed. [00:01:49] Speaker 04: What the district court did was, despite having the Czech Republic's motion to dismiss in front of it, [00:01:56] Speaker 04: decided on a ground based on what the arbitration agreement itself said, which in the district court's view precluded the arbitral award from ever becoming binding on the parties. [00:02:11] Speaker 04: And what the district court said was that under the party's arbitration agreement, which was made explicitly under the laws of the Czech Republic and its procedures, [00:02:23] Speaker 04: the mere service of a review request presumably by either party. [00:02:30] Speaker 04: made the award non-binding per se. [00:02:33] Speaker 05: Let's let's um I understand that argument but it's not particularly helpful where our review was de novo and ultimately um we're reviewing the holding of the district court which is that the um the motion to dismiss was properly granted because [00:02:53] Speaker 05: a competent authority had vacated or reversed the award that you were seeking to enforce, right? [00:03:04] Speaker 05: That's the ultimate ruling. [00:03:07] Speaker 04: Well, no, Your Honor. [00:03:08] Speaker 04: I mean, it is true in a certain way. [00:03:11] Speaker 04: That statement, which is contained in a footnote, in which the Court is choose any [00:03:17] Speaker 04: obligation to look at check law or its content, the district court says that the opinion, the resolution clearly and unequivocally stated that the final award was not binding. [00:03:32] Speaker 04: But the district court's opinion itself goes off on an entirely different basis. [00:03:38] Speaker 04: And it says that under the arbitration agreement, the arbitral award could never become binding because once the service of review request was made, either by DIAG or the Czech Republic, that makes the award non-binding per se, and that the resolution by dismissing the proceedings without coming to another award meant that there was nothing for it to enforce under the New York Convention. [00:04:06] Speaker 04: That is actually the holding of the court. [00:04:10] Speaker 05: You know, maybe I see it differently, but I think that the upshot of what the district court held in the upshot of what I conclude after reading the resolution myself. [00:04:24] Speaker 05: is that the district court concluded that the review tribunal held that the partial award was raised judicata with respect to the subsequent award that was called the final award. [00:04:44] Speaker 05: And therefore, that subsequent award was without effect because the arbitration should have been discontinued as of the payment and satisfaction of the partial award. [00:05:02] Speaker 05: that in that based on that then the district court in some in substance said that the award that you were seeking to enforce had been [00:05:17] Speaker 05: vacated by, you know, a competent tribunal. [00:05:22] Speaker 05: So, you know, we can parse what the district court said in this footnote or that footnote or whatever, but the upshot is that. [00:05:32] Speaker 05: What's wrong with that? [00:05:34] Speaker 04: What's wrong is that it is wrong on every conceivable basis. [00:05:38] Speaker 04: It's wrong under Czech law. [00:05:40] Speaker 04: It's wrong if you read the resolution carefully. [00:05:44] Speaker 05: The resolution says, you know, and I quote the translation, I think, that your client proffered, it says, the plea of race judicata is established. [00:05:59] Speaker 04: Yes, but the tribunal draws no conclusion from that whatsoever. [00:06:06] Speaker 04: What it then goes on to say is that notwithstanding that, whatever reason that the tribunal thought that was true, they then go on to say that for reasons apparently having to do with what happened on interventions, there had been a wave of arbitration. [00:06:28] Speaker 04: But if you read that resolution carefully, and it is carefully parsed linguistically by Judge Kodak, who is a Supreme Court Justice of Austria, [00:06:38] Speaker 04: He points out that the resolution, it fundamentally draws no conclusion from raised judicata and moves onto a different ground, and that the only thing you can possibly draw from that resolution is that the proceedings were dismissed. [00:06:56] Speaker 04: That has a very specific meaning. [00:06:58] Speaker 05: They've got an expert that says the opposite. [00:07:01] Speaker 05: Ultimately, you know, I don't know how much of any weight I give any of that. [00:07:06] Speaker 05: Ultimately, our job is to read this however ambiguous it is and try to construe it. [00:07:13] Speaker 04: But the court must read it in the context of check law. [00:07:18] Speaker 04: And the check law expertise that's in the record very clearly points out that there's [00:07:24] Speaker 04: very clear, even admitted difference between a arbitral resolution and an arbitral award. [00:07:31] Speaker 04: A resolution is a procedural device which says, which means that the court that is looking at the appeal has no jurisdiction to act. [00:07:42] Speaker 04: And as the experts point out, you cannot simultaneously ever have a case where the court in effect rules that an award that exists is nullified while itself claiming lack of jurisdiction to review the award. [00:08:00] Speaker 05: That is an impossibility. [00:08:01] Speaker 05: But isn't the holding essentially that the [00:08:06] Speaker 05: The arbitral tribunal that issued the 2008 final award didn't have jurisdiction itself because they should have discontinued the proceedings? [00:08:18] Speaker 04: That is nowhere stated, and it's not true. [00:08:21] Speaker 04: And the reason that's not true, Your Honor. [00:08:22] Speaker 05: What do you mean it's nowhere stated? [00:08:24] Speaker 05: It's stated in Section 4.5. [00:08:28] Speaker 04: No, what happens in 4.5 is that for whatever reason the tribunal thinks something has happened here with respect to arbitration and court proceedings, whatever conclusion the court ruled on with respect to intervention naturally applies to the award. [00:08:49] Speaker 04: But the award cannot be vacated. [00:08:53] Speaker 04: It cannot be nullified. [00:08:53] Speaker 05: Point to the language in 4.5 that says what you just said. [00:09:11] Speaker 05: In particular, I point point you to a 397. [00:09:24] Speaker 05: About eight lines down the sentence beginning with however. [00:09:33] Speaker 05: And then the following sentence, it says, in such a case, they had no other choice than to discontinue the arbitration on the principal intervention. [00:09:43] Speaker 05: So they're saying that I guess to the extent that this other intervener came in, they should have discontinued the intervention, or maybe they did. [00:09:54] Speaker 05: This is all very obtuse, but they end the paragraph [00:10:03] Speaker 05: by saying that the conclusions arrived at by the arbitrators when deciding on the principal intervention naturally apply also to the decision-making of the dispute between the parties of the original dispute. [00:10:19] Speaker 05: And then they say even though the plea of race judicata occurred earlier. [00:10:23] Speaker 05: Why shouldn't I conclude that to say that they [00:10:27] Speaker 05: that this review tribunal was saying that the arbitrators basically had no jurisdiction and should have discontinued the arbitration before reaching the 2008 final. [00:10:38] Speaker 04: Because regardless of what the reasoning says or does not say, the only thing that the panel can do under check law is to decide what happens to the award under review. [00:10:54] Speaker 04: Perhaps unlike our procedure, the decretal paragraph is what governs the rights of the parties. [00:10:59] Speaker 04: The decretal paragraph here says that the proceedings are dismissed. [00:11:03] Speaker 04: That means, in Czech law, that no review of this award took place without a review. [00:11:09] Speaker 02: Let me ask the question this way. [00:11:10] Speaker 02: So if we're looking at 4.5, here's how I'm looking at this. [00:11:15] Speaker 02: 4.4 has a bunch of language in it about race judicata. [00:11:20] Speaker 02: And if 4.4 were carried to its full conclusion, then you'd be in trouble. [00:11:27] Speaker 02: Because there's a bunch of stuff, just let me finish. [00:11:30] Speaker 02: There's a bunch of stuff in there about how race judicata wouldn't be a good thing for you. [00:11:33] Speaker 02: At least we can agree on that. [00:11:34] Speaker 02: If you don't agree on that, I'm not understanding your position at all. [00:11:37] Speaker 02: But 4.4 at least has some language in it about race judicata that would be problematic. [00:11:43] Speaker 02: But I take your point that at the end of the day, [00:11:46] Speaker 02: the Review Tribunal didn't appear to do anything with it vis-à-vis the underlying arbitration proceeding. [00:11:51] Speaker 02: So they go on to 4.5, and in 4.5, the Review Tribunal explains why it's concluding that it doesn't have authority to act in this area, and it's going to discontinue the proceeding. [00:12:01] Speaker 02: Then, now that we're in the land of 4.5, the question becomes, well, what is 4.5 doing? [00:12:08] Speaker 02: And under 4.5, as Judge Wilkins says, [00:12:11] Speaker 02: it appears that in 4.5 the reason the Review Tribunal is saying it lacks jurisdiction has to do with the interplay between the arbitral proceeding and the judicial proceeding to which it refers. [00:12:24] Speaker 02: And the logical upshot of what the Review Tribunal seems to be saying in 4.5 is that the arbitral proceeding [00:12:33] Speaker 02: shouldn't have happened either, at least at the final reward stage. [00:12:36] Speaker 02: They don't do anything with, as far as I can tell, the review tribunal doesn't end up doing anything with that in terms of annulling the final award. [00:12:44] Speaker 02: You may have a position there. [00:12:46] Speaker 02: But the logical upshot of what appears to be the ground of 4.5 could have that consequence, because it would mean that the arbitral proceeding never should have gone forward to the final award stage. [00:13:00] Speaker 02: Does that not seem right, that that would be the logical upshot of the rationale in 4.5? [00:13:05] Speaker 04: We don't know what they're talking about in 4.5, but one thing we do know. [00:13:10] Speaker 02: Wait, but you have to know, I mean, what do you think they're talking about in 4.5? [00:13:13] Speaker 04: What they seem to be saying is that there was some sort of court proceeding, an arbitral court. [00:13:18] Speaker 04: Court proceeding, is that what you're saying? [00:13:20] Speaker 04: Court proceeding. [00:13:20] Speaker 04: Yeah, yeah. [00:13:21] Speaker 04: In which the arbitration award, the arbitration agreement was not pled in response to the proceeding, and therefore the court [00:13:33] Speaker 04: proceeded to do what it did. [00:13:35] Speaker 04: And the intervention really had nothing to do with any of this. [00:13:41] Speaker 04: The intervention was on behalf of non-parties through the proceeding altogether. [00:13:48] Speaker 04: And the court seemed, I mean, the tribunal here seems to think that the court somehow ruled that the failure to plead the arbitration agreement has an effect on [00:14:01] Speaker 04: not the underlying proceeding, but on its own ability to review. [00:14:07] Speaker 04: Literally the only clear statement in this resolution is that we lack a valid review request. [00:14:18] Speaker 04: Once they say that, [00:14:20] Speaker 04: So I understand this argument. [00:14:25] Speaker 02: I will say to you, though, it may be enough to get you home. [00:14:30] Speaker 02: I'm not saying it's not. [00:14:31] Speaker 02: It seems very formalistic, because what you're saying is [00:14:35] Speaker 02: I don't even know what this review tribunal is saying. [00:14:38] Speaker 02: I've read it in six languages. [00:14:39] Speaker 02: I have no idea what it's saying. [00:14:40] Speaker 02: All I care about is at the end of the day, the bottom line is they said they didn't have authority to pronounce a resolution on this review tribunal. [00:14:48] Speaker 02: That's all I need to know. [00:14:49] Speaker 02: I win. [00:14:50] Speaker 02: And you may be right about that, but suppose I care about the rationale of the review tribunal. [00:14:56] Speaker 02: And I think that you need to care, too, because the way I look at it, [00:15:00] Speaker 02: 4.4 has a race judicata resolution that wouldn't be in your best interests. [00:15:05] Speaker 02: Your argument is, well I'm okay because under 4.5 the review tribunal says at the end of the day whatever I said about race judicata doesn't matter because my resolution at the end of the day under 4.5 is I don't have authority in this area so I'm just absenting myself from this process. [00:15:20] Speaker 02: And then I care about the rationale in 4.5 whereby the review tribunal says I don't have authority. [00:15:25] Speaker 02: What is that underlying rationale? [00:15:27] Speaker 04: Your honor, what I would say about [00:15:30] Speaker 04: your perception is that you must divorce yourself from American jurisprudence and go into the Czech legal system, because the Czech legal system, unlike ours, is very formalistic. [00:15:43] Speaker 04: It must do things in a certain way. [00:15:46] Speaker 04: This is clear from all the expert opinions. [00:15:48] Speaker 02: Right, so that's why I'm saying that I, that's why I caveated everything I said by saying, I'm not saying you [00:15:54] Speaker 02: need to do this under Czech law. [00:15:57] Speaker 02: I understand your argument, and it may be that the formalistic, and I don't mean to be pejorative about that, the way in which you're pitching your argument may be right as a matter of Czech law. [00:16:07] Speaker 02: I'm just saying if you can help me, suppose I want to look at it differently, and the way I look at it is 4.4 has a race judicata exegesis, an explanation that seems to me like it's problematic for you. [00:16:20] Speaker 02: You have an argument that says, [00:16:22] Speaker 02: the review tribunal expounded on race judicata and then at the end of the day says basically forget everything I just said because the ultimate resolution is that I don't have jurisdiction. [00:16:34] Speaker 02: And so the review tribunal absents itself under 4.5. [00:16:37] Speaker 02: I think what Judge Wilkins is getting to and what I'd like to get to is [00:16:42] Speaker 02: The rationale in 4.5 by which the Review Tribunal says, I'm absenteeing myself from this, I don't have jurisdiction, seems to have consequences for the underlying arbitration proceeding, too, because the rationale would seem to be there's a tug of war between a judicial proceeding and a parallel arbitral proceeding. [00:17:00] Speaker 02: It seems like the way things went down, the judicial proceeding could have been stopped if the parties had raised the pendency of the arbitral proceeding as a red flag, but they didn't do it. [00:17:10] Speaker 02: So then the judicial proceeding takes precedence. [00:17:12] Speaker 02: And if that happens, then the arbitral proceeding is out. [00:17:16] Speaker 02: And that would seem to have implications for the final award, too. [00:17:20] Speaker 04: I don't believe so, Your Honor, because the award under review was already ongoing. [00:17:26] Speaker 04: At the time of this intervention, the parties to the arbitration, the principal parties to the arbitration were in the midst of an arbitration that had been going on for 10 years, more than 10 years at that point. [00:17:37] Speaker 04: So when the interveners came in with some claim that they had a right to intervene, what the court said was that, what the tribunal here said is that if they went to court and no one raised the arbitration, so therefore what that meant is that the court has jurisdiction, presumably, [00:17:55] Speaker 04: over the intervention action. [00:17:58] Speaker 04: But it can't really do anything about the underlying arbitration agreement, the underlying arbitration itself, which had been going on for probably 10 or 15 years. [00:18:07] Speaker 05: So what is the language on A397, that final full paragraph, the first sentence? [00:18:15] Speaker 05: It reads, however, due to all the reasons described above, the arbitrators had no other choice than to discontinue the arbitration. [00:18:25] Speaker 05: What does that sentence mean? [00:18:30] Speaker 04: What it means is that the arbitrators believe that they lack a valid review request. [00:18:37] Speaker 04: That's the only clear statement. [00:18:38] Speaker 05: They said that the arbitrators had no other choice past tense. [00:18:43] Speaker 05: Speaking about my belief is that they are speaking about the arbitrators who issued the final award. [00:18:53] Speaker 05: Can we agree on that? [00:18:56] Speaker 04: I don't think so. [00:18:58] Speaker 04: Because I don't think, here's why we can't agree on it. [00:19:03] Speaker 04: Because in order for this panel to say that, it has to conduct a review which it claims it has no jurisdiction to do. [00:19:14] Speaker 04: the only way that you can vacate this award and check, you can't vacate it, if you conclude, you are the review panel and you conclude that you lack jurisdiction to proceed, you cannot then render a merits decision on the underlying award. [00:19:31] Speaker 02: Yeah, I have the same question. [00:19:32] Speaker 02: I thought, although it seems, it is framed in the past tense, [00:19:36] Speaker 02: and it seems, and this could be an issue of translation, I understood that penultimate sentence to be a reference to the arbitrators who are issuing the review panel resolution and to saying, to say, [00:19:52] Speaker 02: that we don't have authority. [00:19:55] Speaker 02: Even though it could, just as a matter of translation, it could be referring to what had already happened in the underlying arbitration, I thought that this sentence actually referred to what the review panel itself was saying about its own authority. [00:20:07] Speaker 04: That is what it's saying, and you can prove that because when [00:20:13] Speaker 04: When the tribunal here, the review tribunal, discusses what had to happen when my client withdrew its review request, which it had done in 2010, it says that the only thing we can do as a result of the withdrawal of that is to discontinue the proceedings because they have no jurisdiction to do anything. [00:20:35] Speaker 05: That's not exactly what they say though. [00:20:38] Speaker 05: They say that of review that is being requested by the Czech Republic will ultimately, if found to have merit, will ultimately result in a discontinuation of the proceedings. [00:21:01] Speaker 05: They say that explicitly in their resolution. [00:21:07] Speaker 04: Well, they can say whatever, they can muse about anything, but the truth of the matter is that they must have jurisdiction to act. [00:21:17] Speaker 04: They're saying, as far as we can understand it, that if it were up to us in the first instance, we would have said it was raised judicata here. [00:21:26] Speaker 04: But the reason they can't say that is very simple. [00:21:29] Speaker 04: The 2002 award [00:21:31] Speaker 04: is itself confirmed, and it has raised judicata. [00:21:35] Speaker 04: And its raised judicata is on the following. [00:21:39] Speaker 04: It's a partial award, which does, it says that there is a minimal agreed amount of damages, which we are now going to award. [00:21:48] Speaker 04: Other issues are left open for a final award. [00:21:53] Speaker 04: And that's not the way they construed it. [00:21:59] Speaker 05: Well, that's what it does. [00:22:02] Speaker 04: But they have no choice but to construe it. [00:22:05] Speaker 04: They can say what they want. [00:22:07] Speaker 05: Let me ask you this question. [00:22:11] Speaker 05: Let's assume that the review tribunal looked at this and said, we don't believe that the arbitral panel had authority to issue the 2008 final award because there was race judicata and because they should have discontinued the proceedings once this intervention happened and the court asserted jurisdiction over this intervention dispute. [00:22:41] Speaker 05: And so that award, that 2008 final award is set aside. [00:22:49] Speaker 05: Let's suppose that was their intent. [00:22:51] Speaker 05: You're saying under check law, they would have had to have done that in a different way. [00:22:56] Speaker 05: than what they did here. [00:22:58] Speaker 05: Explain to me what they would have had to have done. [00:23:01] Speaker 04: Yeah, and this is supported by Professor Bailalovic, who is the leading arbitral expert in Czech law. [00:23:07] Speaker 04: He has the leading treatise. [00:23:09] Speaker 04: He explains that in that situation, where a review tribunal concludes that the original panel had no jurisdiction to proceed, first of all, the review tribunal itself assesses its jurisdiction. [00:23:26] Speaker 04: It takes the review, it says, we believe that the award is barred by Ray's Judicata, and we nullify it. [00:23:36] Speaker 04: Then they dismissed their own proceedings. [00:23:38] Speaker 04: They dismissed the review proceedings because having nullified the original award, there's nothing for them to review. [00:23:45] Speaker 04: That's not what this panel did. [00:23:46] Speaker 04: This panel said that it had... Isn't their contrary expert opinion? [00:23:51] Speaker 04: I don't think on this point, I don't think anyone would disagree. [00:23:55] Speaker 04: This is perfectly clear under Czech law. [00:23:59] Speaker 04: The only difference, by the way, between the experts here is not on that. [00:24:04] Speaker 04: The question is whether that can be done by a resolution. [00:24:09] Speaker 04: When you, in check law, if you're reviewing an award and you want to change it, or you want to vacate it, you want to so-called nullify it, that is a merits review of the award, which implies that you've had jurisdiction to conduct a review to do that. [00:24:26] Speaker 02: Can I ask you, we have a district court resolution that we're reviewing here where none of this was aired in the district court opinion. [00:24:35] Speaker 04: The district court says it's not going to get involved in what Chek will do, but it's perfectly clear that the resolution, the only basis for the resolutions doing what it did is because it believed that the final award was lacking in validity. [00:24:56] Speaker 04: The final award is nowhere, not once, mentioned in the resolution. [00:25:03] Speaker 04: Not once. [00:25:04] Speaker 04: And without all the agreement, all of the experts would agree that there is no... What do you mean the final award was not mentioned once in the resolution? [00:25:15] Speaker 05: It's mentioned all over the race judicata section. [00:25:20] Speaker 05: I mean, there's no point to having Section 4.3 if you're not discussing the final award. [00:25:29] Speaker 05: I'm sorry, 4.4. [00:25:36] Speaker 05: They even mention it in the duty to instruct section 4.3 because they talk about whether the motion for review was timely filed. [00:25:47] Speaker 05: And so they mention the 2008 award there because that starts the clock ticking for when there has to be the timely filing of a motion for review. [00:25:57] Speaker 04: The dispositive portion, which is the only thing that matters, [00:26:02] Speaker 04: does not mention the final award, there is. [00:26:05] Speaker 05: So in other words, you're talking about, I'm sorry. [00:26:07] Speaker 05: You're talking about the first two sentences, Roman numeral one and Roman numeral two. [00:26:10] Speaker 04: Correct, which are the controlling, they are the controlling matters in Czech law. [00:26:16] Speaker 02: What you're calling the resolution, the reasoning definitely mentions the final award. [00:26:20] Speaker 04: Well, my point simply is this. [00:26:23] Speaker 04: If you read, first of all, in check, Lord, you're not supposed to look at the reasoning at all unless the decretal paragraphs are ambiguous. [00:26:31] Speaker 04: Everyone agrees on that. [00:26:33] Speaker 04: There's no one who disagrees on that. [00:26:35] Speaker 05: Why aren't the decretal paragraphs ambiguous here? [00:26:38] Speaker 04: Because the proceedings are discontinued and no one gets costs. [00:26:41] Speaker 04: That implies that there's no jurisdiction. [00:26:44] Speaker 04: A resolution is issued. [00:26:46] Speaker 02: You just said that implies. [00:26:48] Speaker 02: That's not terribly useful language when you're saying it's clear on its base. [00:26:51] Speaker 04: The resolution says the proceedings are discontinued. [00:26:56] Speaker 04: A resolution has a specific point in check arbitral law, and this is by statute. [00:27:01] Speaker 04: The Arbitration Award Act is in the record. [00:27:07] Speaker 04: There are two things that happen in check arbitral law. [00:27:10] Speaker 04: There's an award, and in a case where there is no award, there is a resolution. [00:27:17] Speaker 04: The award, the way you measure what the award is, is that the award governs the rights between the party. [00:27:24] Speaker 04: It adjudicates the rights between the parties. [00:27:26] Speaker 04: A resolution does no such thing. [00:27:29] Speaker 04: It dismisses something for procedural basis. [00:27:31] Speaker 04: So if you go through and look at this resolution, you will find that there's not a single statement regarding the effect of the final award. [00:27:43] Speaker 04: And in fact, this is exactly why [00:27:47] Speaker 04: This is exactly why a clause of legal effect is on that final award after all of this. [00:27:53] Speaker 02: So just getting back, were these arguments aired in the district court? [00:27:57] Speaker 04: They were all before the district court. [00:27:59] Speaker 04: The district, the only reason they're being argued on this appeal is because the district court had a footnote. [00:28:05] Speaker 02: Right, so I'm just wondering what led to that footnote. [00:28:09] Speaker 02: The footnote has a legal conclusion. [00:28:11] Speaker 02: Yes. [00:28:11] Speaker 02: And what led to that legal conclusion is the exact same arguments that are being aired today. [00:28:16] Speaker 04: Correct. [00:28:17] Speaker 04: Presumably, I can't speak with the district court. [00:28:19] Speaker 02: We don't know for sure because the reasoning wasn't spelled out. [00:28:22] Speaker 04: But the district court said that it wasn't going to do anything about check law, but it's clear to it. [00:28:27] Speaker 04: So the issue has been briefed extensively in this court. [00:28:32] Speaker 04: But, Your Honor, with respect to raised judicata, no panel has the right to take away the raised judicata effect [00:28:41] Speaker 04: of the 2002 award, which everyone agrees has raised Judicata effect. [00:28:47] Speaker 04: And incidentally, under Czech law, if you were to conclude that that's exactly what the resolution did, that in other words, it nullified the award and said that the partial award was the final award, [00:29:03] Speaker 04: What would end up happening here is that the district court would, first of all, end up depriving my client of an entire segment of his case. [00:29:15] Speaker 04: In check law, the case is decided by the plaintiff. [00:29:19] Speaker 04: The plaintiff makes claims everything must be disposed of. [00:29:23] Speaker 04: The partial award says that certain things are not being disposed of, save for a final award. [00:29:30] Speaker 04: It also [00:29:32] Speaker 04: results in the district court robbing the 2002 award of its own raised judicata effect and substituting what the district court thinks the resolution should have said to achieve what the district court thinks the resolution wanted to do but didn't. [00:29:53] Speaker 04: That is not something that a confirming court has any power to do. [00:29:58] Speaker 04: on a proceeding like this. [00:30:00] Speaker 04: Good morning, Your Honors. [00:30:18] Speaker 00: May it please the Court, Elena Fort on behalf of the Czech Republic. [00:30:22] Speaker 00: Deog-Human opened its argument by noting that enforcement proceedings before the District Court are supposed to be summary proceedings and that there's a very small burden of proof. [00:30:33] Speaker 00: However, under the New York Convention, which is the applicable law for the District Court to apply and the standards set forth under the New York Convention, [00:30:41] Speaker 00: the district court is required and bound to look at the exceptions to enforcement that are applicable in that case. [00:30:48] Speaker 02: Can I ask you a question about the district court opinions? [00:30:51] Speaker 02: Let's assume footnote nine wasn't in the opinion. [00:30:54] Speaker 02: Just assume it away. [00:30:55] Speaker 02: Are you defending what's left of the district court's opinion? [00:30:59] Speaker 00: Yes, your honor. [00:31:00] Speaker 02: So you think the way the arbitration agreement should be read is that anytime a party triggers review, then it makes an underlying award non enforceable. [00:31:13] Speaker 00: No, no, your honor, because I don't think that. [00:31:17] Speaker 00: Looking at the district court's opinion and taking that interpretation, I believe takes the opinion far beyond the four corners of the opinion and what the judge actually said. [00:31:28] Speaker 00: And what I think that she did as far as the footnote versus what was concluded in the body, I guess we'll say of the argument, [00:31:37] Speaker 00: is that initially and primarily the court focused on the plain language of the arbitration agreement coupled with the overall outcome of the arbitral review proceedings. [00:31:50] Speaker 00: So the court noted the fact that a timely review application was submitted [00:31:55] Speaker 00: that that review application ultimately was received by the Arbitration Review Tribunal. [00:32:01] Speaker 00: Those proceedings came to a conclusion, and the proceedings were ultimately discontinued. [00:32:08] Speaker 00: And so the court looked at the plain language of the agreement, which says that if a timely application for review is submitted, then the arbitral award will not go into effect at that time. [00:32:22] Speaker 00: And throughout the pendency of the arbitral review proceedings, the award cannot be final, binding, and capable of enforcement. [00:32:30] Speaker 00: Once the review tribunal came to its conclusion on that timely submitted application for review and discontinued the proceedings, [00:32:38] Speaker 00: There's no award to enforce. [00:32:40] Speaker 02: In other words, that all depends on what happened in the final review proceeding. [00:32:50] Speaker 02: You don't take the position, you and I might disagree on the way we read the district court's opinion, but it doesn't sound like you're taking the position that once the review panel mechanism was triggered, [00:33:01] Speaker 02: then that means, no matter what the review panel does, that the underlying arbitral award is incapable of enforcement. [00:33:09] Speaker 00: Right. [00:33:10] Speaker 00: And I don't think that's what the district court was trying to say. [00:33:13] Speaker 02: So even under your view, we have to look at what the review panel did in order to figure out whether the final award is enforceable. [00:33:23] Speaker 00: Yes, there has to be some, there has to be an outcome to the review proceedings. [00:33:27] Speaker 00: One of the factors or circumstances, I should say, that DIQ pointed to in its appellate brief was if you look at how the district court interpreted the arbitration agreement, theoretically both parties could have submitted a request for review or one of them and withdrew it and would try to prevent the arbitration award from ever coming into effect. [00:33:50] Speaker 02: However, that's not... Okay, let's get past that hypothetical and let's say the review panel just says, we don't have authority. [00:33:59] Speaker 02: plain as day, we don't have authority to pronounce on this review. [00:34:04] Speaker 02: It's not because somebody withdrew it. [00:34:06] Speaker 02: Nobody withdrew it. [00:34:07] Speaker 02: Or at least one person didn't withdraw it. [00:34:09] Speaker 02: We just don't have authority. [00:34:11] Speaker 02: And you can fill in your reasons, whatever they might be. [00:34:13] Speaker 02: It was an improperly filed request. [00:34:18] Speaker 02: It was out of time. [00:34:20] Speaker 02: Whatever it is, the bottom line is, flat out, we're not pronouncing on anything about the merits of the award. [00:34:25] Speaker 02: We just don't have authority to pronounce on it at all. [00:34:29] Speaker 02: That's a conclusion. [00:34:31] Speaker 02: It's a proceeding that's triggered, and it results in a resolution. [00:34:34] Speaker 02: Do you think that that conclusion would mean, per the district court's rationale, that the final award is something that can't be enforced? [00:34:42] Speaker 00: Well, I think, Your Honor, it would depend on how that resolution or award was ultimately drafted. [00:34:49] Speaker 02: I'm telling you how the final, the review panel, the only thing that's relevant to me is it says, [00:34:57] Speaker 02: We don't have authority to pronounce on this petition for review. [00:35:01] Speaker 02: I don't know the exact language, but we don't have the authority to pronounce on this petition for review. [00:35:05] Speaker 02: So we're discontinuing the proceeding. [00:35:08] Speaker 02: We are not pronouncing on the underlying final award because we don't have authority to pronounce on it. [00:35:15] Speaker 00: And are you saying this as far as a hypothetical situation? [00:35:20] Speaker 00: Yeah. [00:35:20] Speaker 00: OK. [00:35:21] Speaker 00: In that circumstance, I mean, from a hypothetical standpoint, I assume if the court said we don't have authority to do any sort of merits review or make any sort of determination, like they did here, where they have a race judicata analysis. [00:35:35] Speaker 00: Right. [00:35:36] Speaker 00: We're in hypothetical land. [00:35:37] Speaker 00: In that circumstance, I would assume that the review arbitration tribunal would say, I don't have authority [00:35:43] Speaker 00: discontinue or dismiss the proceedings and the award would then not be altered or would come into effect because there would be some sort of conclusion that says that it's not nullified, that there was no race judicata obstacle, that there was no obstacle to that award's enforcement. [00:36:01] Speaker 03: There's a legal issue that's lurking here, and it seems to me it's a legal issue under Czech law. [00:36:09] Speaker 03: And I wonder if you know the answer. [00:36:11] Speaker 03: Is it proper for an arbitration panel under the Czech law to issue a partial award with a final award to come later? [00:36:27] Speaker 00: It's appropriate if the partial award is actually a partial award and is correctly awarded under the circumstances of check law that allow it to be a partial award. [00:36:40] Speaker 00: My understanding of check law is, and based on what the review arbitration tribunal determined based on check law, [00:36:47] Speaker 00: was that the specific circumstances that are spelled out under check law for when it's appropriate to have a partial award were not present here. [00:36:55] Speaker 00: And because they were not present here and the partial award actually and effectively was a final award. [00:37:01] Speaker 03: Are you saying that if the parties in an arbitration agree that the [00:37:10] Speaker 03: claimant is entitled to, say, $10 million. [00:37:14] Speaker 03: And the disagreement is because the claimant is seeking $100 million that the arbitrators can't issue a $10 million award and let the arbitration go forward for the larger amount. [00:37:29] Speaker 03: I mean, that interpretation [00:37:32] Speaker 03: seems to me to be embodied in the district court's opinion that endorses, or she endorses, that view of Czech law, and yet I don't see any citation or any exposition about what the Czech law is. [00:37:48] Speaker 03: Maybe there is no Czech law on this, I don't know. [00:37:51] Speaker 00: On that specific issue that you just spelled out, I'm not sure. [00:37:55] Speaker 03: My understanding is that... Did the parties agree on the amount of the partial award? [00:38:01] Speaker 03: I thought they did. [00:38:04] Speaker 00: I think the partial award was just, the amount was awarded pursuant to an arbitration proceeding that resulted in the partial award. [00:38:13] Speaker 03: It was not an agreed- Did the claimant and the check organization agree you're entitled to whatever that, I've forgotten what the award was? [00:38:22] Speaker 00: Well, the partial award was, as the arbitration agreement allows, there's a built-in review procedure. [00:38:29] Speaker 00: So the partial award went up to an arbitration review tribunal as well and was ultimately affirmed and enforced. [00:38:35] Speaker 00: And then at that point, once it went through the necessary review proceedings and came back down, then the award was enforced and it was ultimately paid by the Czech Republic. [00:38:46] Speaker 05: But as far as a partial award... What triggered the second award? [00:38:50] Speaker 00: What triggered the second award? [00:38:52] Speaker 00: Yeah, was there... The final... The final award. [00:38:57] Speaker 00: As far as my understanding is there was mostly interest, basically. [00:39:03] Speaker 00: It was amounts for interest that were outstanding and some other ancillary issues that were supposed to ultimately be decided by an additional award. [00:39:12] Speaker 02: I thought we were talking, I don't understand how it could be ancillary if the amounts were something like 10 million for partial and 300 million for final. [00:39:22] Speaker 00: Am I wrong about that? [00:39:23] Speaker 00: The amounts in interest that were [00:39:26] Speaker 00: Set forth in the final order are very very large so but that's My my recollection of the of the final or excuse me the partial award is that it spells out actually I have a partial award in here [00:39:42] Speaker 00: that it spells out, that it uses the phrase ancillary issues. [00:39:46] Speaker 00: And, you know, quite honestly, you know, I can't really explain why the partial award was issued and why the final award came to be and obviously the underlying original arbitration panel. [00:40:01] Speaker 00: thought that they could proceed and thought that they appropriately issued a partial award under check law. [00:40:06] Speaker 00: That ultimately was decided to be incorrect by the review arbitration panel on the resolution. [00:40:12] Speaker 00: I think that's very clear from the section that discusses race judicata. [00:40:18] Speaker 00: I was just trying to pull up the, I have the partial award right here. [00:40:28] Speaker 00: And it talks about other parts of the matter at issue, including ancillary rights and interest accrued, as well as costs of the proceedings shall be decided upon in a final award. [00:40:38] Speaker 00: So, you know, from my standpoint, the bulk of the damages and the underlying arbitration were decided by the partial award, and they were ultimately paid by the Czech Republic and satisfied, and the additional [00:40:53] Speaker 00: issues which aren't even actually spelled out in the partial award, which I think is one of the arguments as far as check law and why it does not appropriately constitute a partial award. [00:41:06] Speaker 00: That would be one of the issues that the review resolution board actually noted. [00:41:11] Speaker 02: And you're saying it doesn't appropriately constitute a partial award because of the race judicata explanation by the review panel. [00:41:17] Speaker 00: Yes, and just under the application of check law, my understanding is that a partial award can only be issued when there are, it's an award on, as to one party's claim, when there's maybe multiple plaintiffs, multiple defendants, or when there's multiple actions at issue. [00:41:35] Speaker 00: Say it was, you know, you had a breach of contract claim and two other claims, and there was a partial award on just the breach of contract claim, for example. [00:41:43] Speaker 00: And then additionally, under check law, my understanding is that a partial award has to specifically spell out what it is reserving for a future and final award. [00:41:56] Speaker 00: And this award, based on the plain language that I just read, does not do that. [00:42:00] Speaker 00: And that was an additional issue under check law that the review arbitration panel [00:42:07] Speaker 00: found for determining that the partial award was actually, in fact, a final award when you look at and, you know, when you take substance over form. [00:42:19] Speaker 00: And that was the race judicata argument. [00:42:22] Speaker 05: Well, what about your friend on the other side's argument that the resolution makes clear in the two decretal paragraphs there, room number one and two, [00:42:34] Speaker 05: that the proceedings are discontinued, that that's essentially the holding and it's a holding that they don't have jurisdiction. [00:42:45] Speaker 05: And so it can't really under check law result in vacating the final award. [00:42:54] Speaker 00: Well, first of all, Your Honor, and I think you might have spoke to this, but I don't view the decretal paragraphs as being clear. [00:43:04] Speaker 00: I think that's very evident here considering that there is a lot of dispute and there's different experts on both sides talking about what was meant and intended by the proceedings are discontinued. [00:43:18] Speaker 00: And I'm not going to be able to pronounce his name, but Professor Bela Hovik, I think it is. [00:43:26] Speaker 00: That is Diyag Human's primary expert in this area. [00:43:30] Speaker 00: And he's probably the most renowned expert that was submitted by the Czech Republic. [00:43:34] Speaker 00: And even he concedes [00:43:36] Speaker 00: that the Arbitration Act itself does not specify when specifically an arbitration award has to be issued versus a resolution. [00:43:46] Speaker 00: And also, another one of the Czech Republic's experts actually concedes that whenever the decretal paragraphs are not clear or are ambiguous, then you resort to the reasoning of the opinion. [00:43:59] Speaker 00: And here, I think it was very appropriate to resort to the reasoning of the opinion. [00:44:02] Speaker 00: And once you do that, it's very clearly spelled out that there's a race judicata obstacle that was established. [00:44:10] Speaker 00: Dieg human does not dispute the plain language of the resolution, nor can it. [00:44:14] Speaker 02: But what I don't understand about the reasoning is this. [00:44:17] Speaker 02: Let's suppose we get past the resolution and get to the reasoning, per the argument that you just laid out. [00:44:22] Speaker 02: Then what if, conceptually, I don't understand why this can't happen? [00:44:27] Speaker 02: the review panel says, I don't have jurisdiction. [00:44:32] Speaker 02: There's a bunch of stuff I want to get off my chest about race judicata that I think just has to be out there because I don't want people to not understand that I'm overlooking race judicata. [00:44:42] Speaker 02: So I'm going to go ahead and spin out a bunch of stuff about race judicata. [00:44:47] Speaker 02: But I don't have jurisdiction. [00:44:48] Speaker 02: At the end of the day, that's the conclusion I'm coming to. [00:44:51] Speaker 02: my exposition of race judicata and then it expounds upon race judicata and then at the end of the day it comes back and says by the way everything I told you I firmly believe about race judicata but my ultimate resolution here is that I said all that but I don't have jurisdiction so I'm just discontinuing the proceeding given my lack of jurisdiction. [00:45:12] Speaker 02: That seems at least theoretically possible as [00:45:15] Speaker 02: as a way to reason through an arbitration resolution. [00:45:20] Speaker 02: And then the question becomes, is that what happened here? [00:45:23] Speaker 02: And there's some indication in the language of the resolution, of the, I'm using the wrong language, because I don't mean to say resolution is just those two sentences. [00:45:34] Speaker 02: In the decision, use that language, there's some language in the decision that indicates that that's exactly what the review panel did, because it says, and this is your translation, it says at page 552, [00:45:53] Speaker 02: And I'm looking at the paragraph right before 4.3. [00:46:00] Speaker 02: It says, the plaintiff's plea thus cannot be upheld in this respect. [00:46:03] Speaker 02: This in no way prejudices the fact that the request for review of the arbitral award is in fact procedurally ineffective, only for completely different reasons. [00:46:12] Speaker 02: See below. [00:46:14] Speaker 02: So right there they're saying this request review is procedurally ineffective. [00:46:19] Speaker 02: which I take it, I understand to me, we don't have authority to pronounce on it because it's procedurally effective. [00:46:25] Speaker 02: And then if you skip forward to 557, the first paragraph of 4.5, 4.4 is res judicata, which you rightly rely on. [00:46:35] Speaker 02: I can completely understand why you rely on the res judicata resolution because it's helpful to you. [00:46:39] Speaker 02: And the first paragraph of 4.5 under your translation, [00:46:44] Speaker 02: That's right after the race judicata conclusion, which says, according to EG, the ruling of the Supreme Court, an obstacle of race judicata is also established by a final arbitral award. [00:46:56] Speaker 02: The arbitrators are of the opinion that the obstacle was effectively established by the issue of the partial arbitral award. [00:47:00] Speaker 02: So all of which is good for you because it says race judicata has been established. [00:47:03] Speaker 02: Yes. [00:47:04] Speaker 02: Then 4.5 starts and says, nevertheless, [00:47:07] Speaker 02: The arbitrators can perform any assessment review only on condition that a procedurally effective request for review exists, which exactly tracks the language that we just talked about earlier, where they say, look ahead. [00:47:18] Speaker 02: We're going to tell you why this is procedurally ineffective. [00:47:22] Speaker 02: In the interim, there's a bunch of stuff about race judicata that's really good for you. [00:47:26] Speaker 02: And then there's a paragraph that says, nevertheless, in other words, [00:47:30] Speaker 02: Whatever I might have just said about race judicata, the arbitrators can perform any review only on condition that a procedurally effective request for review exists. [00:47:38] Speaker 02: And then 4.5 proceeds to explain why the procedurally effective request review does not exist. [00:47:45] Speaker 02: And then at the end of the day, what we're left with is a resolution that seems like the bottom line is a procedurally effective request doesn't exist, and therefore we don't have jurisdiction. [00:47:57] Speaker 00: But the review arbitration tribunal addressed all of the allegedly procedural defective arguments that were raised by DIQ and with respect to the request for review. [00:48:09] Speaker 00: As far as the appropriate signature of the person that submitted the application for review, they resolved that. [00:48:16] Speaker 00: As far as the additional discussion of [00:48:20] Speaker 00: How it had to be initiated by a motion for review and there was this duty to advise but the duty to advise could not kick in Theoretically until the motion for review was actually filed the court ultimately went on to do an in-depth discussion of substantive versus procedural law and how when something is ineffective under substantive law that cannot be remedied but when something is [00:48:44] Speaker 00: procedurally defective under a procedural law concept, that that in fact can be remedied. [00:48:50] Speaker 00: And I believe it was one of, it was not Professor Belihovic, it was another one of DIHUMAN's experts that addressed this issue and said that the review arbitration tribunal essentially moved forward [00:49:06] Speaker 00: despite that procedural defectiveness and heard the review anyways, went through with the review process anyways. [00:49:14] Speaker 00: And because it was not a substantive issue, it was just a procedural defective issue, they basically waived that issue with their determination, came to the [00:49:25] Speaker 00: race judicata argument, and then ultimately discuss the almost separate argument, right, as far as whether the arbitration proceedings should have been discontinued previously because of this whole issue with the intervention. [00:49:40] Speaker 02: Well, so the whole issue with the intervention seems like it's doing all the work, though, because after the race judicata resolution, the next sentence says, nevertheless, [00:49:49] Speaker 02: which indicates to me that notwithstanding everything I just told you, I raised Judicata, there's a procedural ineffectiveness problem here. [00:49:56] Speaker 02: And the procedural ineffectiveness problem is what I'm going to spell out in 4.5, and what is spelled out in 4.5 is exactly what you just said, which is the interrelationship between the arbitral proceeding and the judicial proceeding, the upshot of which at the end of the day is it's a procedurally ineffective request for review before us, so we lack jurisdiction. [00:50:15] Speaker 00: Yes, and I mean it admit I think everybody can agree your honors that this is not artfully drafted, and that there are there are questions. [00:50:26] Speaker 00: But one thing that the Czech Republic included in its pellet brief. [00:50:32] Speaker 00: was, and this is also based on a footnote, I understand that the district court specifically said that it did not roll on the foreign decisions in coming to its conclusion, but Your Honor, as you noted in a previous argument from earlier today, this court is permitted to affirm on a different basis that was raised below, and we have multiple foreign jurisdictions that are all signatory countries to the New York Convention that all looked at this resolution [00:51:01] Speaker 00: and declined to enforce the award based on the outcome of the arbitral review proceedings and what this resolution says. [00:51:15] Speaker 00: I think two of the opinions that were referenced by the Czech Republic in our appellate brief are still up on appeal. [00:51:22] Speaker 00: One appeal came down and affirmed in the Czech Republic's favor. [00:51:26] Speaker 00: That was submitted in a subsequent letter to the Court of Citation of Supplemental Authorities. [00:51:31] Speaker 00: But we have other signatory countries who are bound to [00:51:36] Speaker 00: apply the standards set forth in the New York Convention. [00:51:40] Speaker 00: And there is a, it's favored among signatory countries that they interpret and apply the New York Convention in a similar fashion, arguably to prevent parties from forum shopping. [00:51:54] Speaker 00: And so there's an even more sound basis to recognizing race judicata and international comedy when we're talking about enforcing an arbitration award under the New York Convention. [00:52:07] Speaker 05: So if Dieg Heumann can just find one country, I guess it has jurisdiction to enforce the arbitration agreement. [00:52:25] Speaker 05: that will, whose courts will, I guess, interpret this review tribunal's resolution and reasoning the way that D.A. [00:52:42] Speaker 05: Heumann says it should be interpreted. [00:52:48] Speaker 05: It doesn't matter if there's 10 other countries [00:52:53] Speaker 05: that have ruled the other way, as long as the courts in that country rule the human way and they can attach assets or whatever they need to do to try to satisfy that judgment, that's the way that this works. [00:53:11] Speaker 05: In essence, that there's kind of no sort of race judicata or preclusion that basically you have to fight this all over the world. [00:53:24] Speaker 05: any signatory country to the New York Convention? [00:53:27] Speaker 05: Is that the way that this works? [00:53:30] Speaker 00: As far as enforcing an arbitration award, if you have the ability to bring an enforcement action in a particular signatory country, as you noted, because there's theoretically some sort of assets or something of the defendant that you can come after and claim in that signatory country, [00:53:51] Speaker 00: then a party certainly is allowed to go into that country and pursue an enforcement action, as Your Honors have seen from the various forum proceedings that I've noted in the brief, that that has happened in this case, so that's certainly taking place. [00:54:07] Speaker 00: And, you know, as far as international comedy, the court's obviously not required, I believe the language may look to those opinions as [00:54:21] Speaker 03: Were those opinions that Brussels, Amsterdam, or whatever, were they based on Czech law? [00:54:27] Speaker 00: Yes. [00:54:28] Speaker 00: Well, [00:54:31] Speaker 00: The opinions basically, the three opinions that the Czech Republic notes in its appellate brief were essentially very similar to what is taking place here because they were actions that were filed to enforce the arbitration award and the same sort of arguments came up before those courts, particularly with respect to the resolution and what the important effect of that resolution was. [00:54:54] Speaker 00: And applying [00:54:56] Speaker 00: the language of the resolution in those cases the courts determined. [00:55:00] Speaker 03: What I was wondering is if these other courts went beyond simply looking at the resolution and coming to a conclusion like the district court did here and delved into check law of arbitration and partial rewards and all the rest of it. [00:55:18] Speaker 00: As far as the issue of the enforceability based on the resolution, my recollection is that they did not delve into check law. [00:55:27] Speaker 00: And I mean, I would submit that the reason for that is that the applicable law under and in respect to an enforcement action is obviously the New York Convention and the standards set forth under the New York Convention and then the law of the enforcing jurisdiction. [00:55:43] Speaker 00: Because what the district court was not being asked to do was to overturn [00:55:48] Speaker 00: or invalidate the award. [00:55:50] Speaker 00: That's not the district court's purview, and that was not the purview of these foreign courts either. [00:55:55] Speaker 00: They're just simply acting in an enforcement capacity. [00:55:59] Speaker 03: So therefore, the district, all of- Yes, but you would agree, would you not, that the background and an important aspect of the interpretation of this resolution is checked law. [00:56:16] Speaker 03: If Chekhov said that arbitrators are perfectly free to issue partial awards and that was established, then that would have, it seems to me, a bearing on how one looks at this resolution. [00:56:30] Speaker 00: Well, sure. [00:56:31] Speaker 00: Check law is very important to the underlying arbitration proceedings. [00:56:36] Speaker 00: The arbitration agreement itself was concluded under the Arbitration Act and specifically says that proceedings will be conducted pursuant to that Act. [00:56:45] Speaker 00: The Act in Section 30 [00:56:47] Speaker 00: incorporates the Czech Civil Procedure Code and mandates that the Czech Civil Procedure Code be applied to underlying arbitration proceedings. [00:56:56] Speaker 00: I guess where I was sort of heading in my point was that nothing in the Arbitration Act and nothing cited by DIHUMAN requires the district court to apply Czech law and delve into these issues. [00:57:10] Speaker 00: The district court is an enforcement court looking at the award and trying to determine whether or not one of the [00:57:18] Speaker 00: exceptions to enforcement that were appropriately raised by the Czech Republic applies in this instance and that's what the district court did. [00:57:26] Speaker 05: I mean isn't the job for the district court in this enforcement proceeding to try to ascertain what happened but not to review what happened to see if it was correct? [00:57:38] Speaker 05: Yes. [00:57:39] Speaker 05: Unless of course there's some sort of action that took place that violates public policy that falls within [00:57:47] Speaker 05: within the exceptions to enforcement in the New York Convention. [00:57:52] Speaker 05: So in other words, let's suppose the reasoning of the review tribunal was absolutely wrong under Czech law, wrong as two left shoes. [00:58:03] Speaker 05: Doesn't really matter whether they did this incorrectly, right? [00:58:11] Speaker 05: If we can ascertain what they did, [00:58:16] Speaker 05: and the effect of what they did, even if they were wrong in doing it, don't we have to enforce it? [00:58:22] Speaker 05: Isn't that the way that this works? [00:58:24] Speaker 00: That's correct, Your Honor, and I think you hit the nail right on the head, and that, I believe, is very clearly spelled out in the Czech Republic's brief, because DIAG human focuses a lot, and a lot of the argument in its brief [00:58:38] Speaker 00: goes to the review arbitration tribunal shouldn't have done this, or applied check law improperly, or if you look at check law, that actually can't happen. [00:58:49] Speaker 00: But none of that, as Your Honor said, matters for purposes of this enforcement proceeding, because it's not- Oh, I wonder about that. [00:58:56] Speaker 03: I mean, it seems to me just perfectly logical and common sense that the background of check law enables you to interpret, or helps in interpreting what they did here. [00:59:09] Speaker 00: as far as understanding the reasoning portion of the resolution? [00:59:12] Speaker 00: It does. [00:59:14] Speaker 00: And again, I can't say that it's not relevant because it certainly is because the underlying arbitration proceedings that this award came out of were based in Czech law and were governed by Czech law. [00:59:25] Speaker 00: But what I'm saying is the district court's job is not to determine whether there was an error of law or fact in the decision of the review resolution. [00:59:34] Speaker 03: District court's job is to determine what the arbitrators did. [00:59:38] Speaker 00: Yes. [00:59:40] Speaker 00: And I think the district court's opinion does ultimately decide what the review tribunal did. [00:59:45] Speaker 05: I think we found one instance where this has happened, but I know that it's not what's supposed to happen in these cases. [00:59:56] Speaker 05: But is this a rare instance where you don't [01:00:03] Speaker 05: we or the district court should ask the review tribunal, what the heck did you mean? [01:00:12] Speaker 05: If we can't figure it out, we mean what are we supposed to do if we can't, if we're not sure? [01:00:20] Speaker 05: Do we reverse? [01:00:21] Speaker 05: Do we affirm? [01:00:22] Speaker 05: Do we remand and kick the can down the road and tell the district court to try again? [01:00:29] Speaker 05: I mean, what, you know, or do we ask the review tribunal, you know, can you clarify, you know, these two, three points? [01:00:38] Speaker 00: Honestly, Your Honor, I think that's probably a very unique, novel question that maybe has never come up. [01:00:46] Speaker 00: I don't know. [01:00:49] Speaker 00: Is it proper for the district court or this court to do that? [01:00:53] Speaker 00: Because isn't that essentially, I mean, are you asking the Review Tribunal to reconvene and make a decision on the merits again? [01:01:01] Speaker 00: Or are you just asking for a purely advisory opinion? [01:01:04] Speaker 00: I don't know how that could, honestly, Your Honor, I would have to think about it, I guess, a little bit. [01:01:13] Speaker 02: Under the New York Convention, is the burden on you to show that the award shouldn't be enforced? [01:01:18] Speaker 00: That an exception applies? [01:01:19] Speaker 00: Yes. [01:01:20] Speaker 02: Yeah, so that's one way to break a tie, is that you look to see the party on which the burden rests, on whom the burden rests. [01:01:28] Speaker 00: To break the tie of? [01:01:30] Speaker 02: In terms of if it's not, you can't kind of make out what's going on here. [01:01:34] Speaker 05: He's being diplomatic, but what he's saying is you lose if we can't figure it out. [01:01:39] Speaker 00: But isn't that, I mean is that, isn't that [01:01:45] Speaker 00: essentially depriving my client of the benefit of the resolution because, I mean, they didn't draft it. [01:01:52] Speaker 00: They can't help that if something wasn't particularly clearly drafted. [01:01:57] Speaker 02: I mean, as far as... Well, that's just the way burdens work, is that you're trying to make use of a resolution and the burden is on you to show that the resolution warrants an exception from enforcement. [01:02:08] Speaker 02: And so, I mean, I take your point that it would be great if the resolution was more clearly in your favor because, for you at least, it would be great because then we carry a burden. [01:02:17] Speaker 00: I mean, Your Honor, I would respectfully say then that we met that burden because not only have we submitted expert opinions, I hear, Your Honor, and I understand that whether or not you should be, how much value or import you give to those expert legal opinions is within the court's purview. [01:02:37] Speaker 00: But we have certainly attached and filed legal expert opinions as well. [01:02:43] Speaker 00: We have also throughout our brief pointed to areas where DIHuman's expert opinions actually make concessions that are helpful to our argument and support our argument. [01:02:54] Speaker 00: And in addition to that, we've also pointed to multiple jurisdictions who have grappled with the same questions that your honors are dealing with today and that have sided with the Czech Republic. [01:03:07] Speaker 00: So from our standpoint, I guess I would argue that we've met that burden. [01:03:14] Speaker 02: Thank you. [01:03:15] Speaker 00: Thank you, Your Honors. [01:03:16] Speaker 02: Thank you, Council. [01:03:18] Speaker 02: We'll give you two minutes for rebuttal. [01:03:21] Speaker 04: There are many things I have to say in two minutes. [01:03:24] Speaker 04: First, Judge Randolph, I do want to explain that yes, partial award is available under Czech law. [01:03:29] Speaker 04: It's available in these circumstances. [01:03:32] Speaker 04: The Czech Republic's resolution, by the way, and this is discussed in the record, [01:03:37] Speaker 04: in the cases that the Czech Republic panel cites, they actually excised through ellipses the portions of the opinions which say that you can issue an award in these circumstances. [01:03:49] Speaker 03: One way or the other, however... Well, that's interesting, and I use that as simply a hypothetical, because the way I read this resolution is that the prerequisites, whatever they are, for a partial award were not met. [01:04:08] Speaker 04: Yeah. [01:04:08] Speaker 04: Your Honor, if you – there is in the record Mr. Calvada's declaration, which – who explains all of this and what they did, how – but it's neither here nor there because the 2002 partial award was appealed by the Czech Republic on one – and one of the grounds for the appeal was that a partial award was not available in these circumstances. [01:04:30] Speaker 04: And the appeals – No, no, no. [01:04:32] Speaker 03: I didn't – I understand. [01:04:35] Speaker 03: Maybe I didn't finish my thought correctly. [01:04:39] Speaker 03: The way I read this is the prerequisites for a partial award were not satisfied. [01:04:46] Speaker 03: Therefore, we treat the partial award as a final award, and you cannot appeal that because the race is due to cotton. [01:04:57] Speaker 04: That's the way I see it. [01:04:59] Speaker 04: the capability of so saying, and they were that appeals panel, they might have said that, but they don't have power to do it because they say they don't have any possibility of conducting a review. [01:05:10] Speaker 04: But beyond that, the 2002 award was appealed on the very ground to an appellate panel, a prior appellate panel. [01:05:20] Speaker 04: One of the grounds for it was that you could not issue a partial award in these circumstances. [01:05:26] Speaker 04: The appeals panel rejected that. [01:05:28] Speaker 04: And that award is raised judicata in this case, which is why this review panel can't possibly upset that, because that award is raised judicata. [01:05:39] Speaker 04: And the substance of that harsh award... Is that in the record? [01:05:44] Speaker 03: It is. [01:05:45] Speaker 04: Yes, it is. [01:05:46] Speaker 05: But aren't we getting into, you know, whether the review tribunal was right or wrong? [01:05:52] Speaker 05: And, you know, isn't that beyond what we're supposed to be doing here? [01:05:56] Speaker 04: No, because the appeals panel itself knows it can't do anything about that award. [01:06:02] Speaker 04: That's why they can't, that's why they say nothing about raise judicata, because even they know they can't do anything about it. [01:06:07] Speaker 04: They're saying, had we been the people involved in that appeals panel, we might have said this, but we can't. [01:06:13] Speaker 04: So we're now going to move on to something else. [01:06:16] Speaker 04: But there are all kinds of other issues here. [01:06:17] Speaker 04: I mean, [01:06:18] Speaker 04: there is a certain redolence to this resolution, which we haven't discussed. [01:06:23] Speaker 04: That's all in the record, too, with respect to what exactly happened after the resolution and what emerged after this resolution came out, which I'm not going to get into, but it's all in the record. [01:06:33] Speaker 04: I do want to address something else, however, and that is with respect to [01:06:40] Speaker 04: The question of what you can do to find out what they meant, we have that in the record because Mr. Schwartz, who was the administrative review panel arbitrator, told in response to our request that we put a clause of legal effect on, he explained, and this is in the record on pages 1151 through 54, [01:07:06] Speaker 04: Here's what Mr. Schwartz had to say when the lower panel asked him what happened, because we don't know, and I'll explain why that happens in chat form. [01:07:14] Speaker 04: He says, we decided that we did not have jurisdiction to conduct, to review the final award, and the above proceedings were stayed by a resolution on staying, meaning they discontinued the proceedings. [01:07:24] Speaker 04: The award dated for August 2008 was not annulled, modified, or upheld. [01:07:30] Speaker 04: In my legal opinion, it became binding and came into legal force as it was not challenged judicially within the relevant timeframes. [01:07:39] Speaker 04: And therefore, he goes on to say that, I think you can put a clause of legal effect on it. [01:07:43] Speaker 04: And we have that. [01:07:44] Speaker 04: It's in the record. [01:07:46] Speaker 03: May I interrupt you? [01:07:48] Speaker 03: You said a couple of things that I wonder. [01:07:51] Speaker 03: I think we both covered this ground. [01:07:52] Speaker 03: At the end of 4.4, [01:08:00] Speaker 03: your translation, the following sentence appears, the objections of the defendant that the decision formerly titled as partial is not actually such a partial decision must be agreed to. [01:08:14] Speaker 03: So the arbitrators here seems to be agreeing that the partial award was not really a partial award. [01:08:22] Speaker 03: in their view, however. [01:08:26] Speaker 03: Then the next section is entitled judicial proceedings. [01:08:31] Speaker 03: And in looking it over, I just haven't struck me before, but it seems to me that what that is is, okay, here's our decision on race judicata. [01:08:41] Speaker 03: Now let's take a look at what the law is that given to us by the courts. [01:08:46] Speaker 03: And they go through all this, it almost looks like cut and paste stuff. [01:08:50] Speaker 03: I mean, things that were in prior decisions and they cut it out and they put it in here, we've got all this fluff which really doesn't have much to do with anything. [01:08:58] Speaker 04: There are analyses of this resolution, the Calvada Declaration, should we say, and the expert opinions, but I will say this. [01:09:06] Speaker 04: They have no power. [01:09:08] Speaker 04: If they're saying, we would have done something different, that's one thing. [01:09:12] Speaker 04: But they can't do anything different, because the 2002 partial court itself has raised judicata. [01:09:17] Speaker 02: Yeah, you made that point a few times. [01:09:18] Speaker 02: I thought that the reason the 4.5 is called judicial proceedings or court proceedings is because it's an explanation by the review panel of why we lack authority. [01:09:29] Speaker 02: And the reason they say they lack authority is because of judicial proceedings, court proceedings, because all they say in there [01:09:36] Speaker 02: I mean, at some point, somebody has to be able to tell us what this means. [01:09:42] Speaker 02: And what it seems to mean to me is that in 4.5, it's called judicial proceedings or court proceedings under the other side's translation because they're saying there were also court proceedings slash judicial proceedings going on parallel to the arbitral proceedings. [01:09:57] Speaker 02: And those court proceedings took precedence because the arbitral proceeding was never raised as a reason to stop the court proceedings from going forward. [01:10:04] Speaker 02: Therefore, we lack authority. [01:10:07] Speaker 04: It's difficult to say what they meant or didn't say. [01:10:10] Speaker 04: One thing it is clear is that they have no jurisdiction. [01:10:12] Speaker 02: I'm sorry? [01:10:12] Speaker 02: Is that not what they said? [01:10:15] Speaker 04: I can't really tell what they're saying. [01:10:18] Speaker 04: They seem to think that something that happened in intervention [01:10:22] Speaker 04: meant that they had no power to act. [01:10:25] Speaker 04: For whatever reason. [01:10:26] Speaker 04: They could be wrong about that. [01:10:27] Speaker 04: They could be right. [01:10:28] Speaker 04: But one thing they conclude is that they lack jurisdiction to do anything. [01:10:32] Speaker 04: In Czech law, the only thing you can ever appeal in Czech law, by the way, is the Decretal Paragraph. [01:10:37] Speaker 04: You can never appeal the reasoning. [01:10:40] Speaker 04: So the reasoning can be entirely wrong. [01:10:41] Speaker 04: If the result is correct, that's what happened. [01:10:45] Speaker 04: And incidentally, Judge Wilkins, you asked about Ray's recantum. [01:10:49] Speaker 04: In Czech law, in 2002, if the Czech Republic thought this was raised judicata, it had the right to go and the obligation to go to the Czech court system under Article 31 of the Arbitration Act and tell the court, this is what happened, stop that proceeding. [01:11:08] Speaker 04: And it never did. [01:11:08] Speaker 04: And in fact, they never raised the objection whatsoever until [01:11:12] Speaker 04: I think 2010 or 11, if you look through the records, you'll see they never raised this before. [01:11:19] Speaker 04: This is something that seems to have been put in. [01:11:22] Speaker 04: But Judge Wilkins, to address something that you asked before, a review panel, once it tides something, has no jurisdiction anymore to do anything. [01:11:34] Speaker 04: There are only two things in check law that it does have the power to do, one of which is if it happens to be the lower panel in this instance had issued a final award which wasn't affected by a review, then the lower panel has put a clause of legal effect on it. [01:11:54] Speaker 04: That happened here. [01:11:56] Speaker 04: The other thing that a lower panel has is the power to deposit the arbitral file in a court. [01:12:04] Speaker 04: Those are the only things it can do. [01:12:05] Speaker 03: I wanted to ask you about that. [01:12:07] Speaker 03: Is, under Czech law, would you have had or Czech defendant have the right to seek judicial review of this arbitration resolution? [01:12:19] Speaker 04: No. [01:12:20] Speaker 04: because under the check system, a resolution is not something that can be reviewed by a court. [01:12:27] Speaker 04: Only an award can be reviewed by a court. [01:12:29] Speaker 04: This is all discussed in the expert opinions. [01:12:31] Speaker 04: There are expert opinions in the record on this point. [01:12:33] Speaker 04: So the answer to that is no, it's not reviewable by a court, which, by the way, can also account for why this panel did what it did the way it did, because it didn't want it being reviewed by a court. [01:12:44] Speaker 04: But in any event, [01:12:46] Speaker 04: It's a confirmation proceeding in which it's the defendant's burden to prove that this award is not available to be confirmed. [01:12:56] Speaker 04: The fact that there are other decisions around the world, those are all local in the sense that, for example, the most recent one that the Czech Republic has pointed to in Amsterdam, in Holland, [01:13:09] Speaker 04: The reason that they did what they did was because of restrictions on what a court of Cassation can do and cannot do on review. [01:13:16] Speaker 04: And certain arguments that Dayak made on that appeal were not in the record, so it couldn't do anything. [01:13:22] Speaker 04: The only opinion that had everything that Dayak had said, and the only opinion to rule on it, is the court in Luxembourg, the Cassation court, [01:13:34] Speaker 04: which rejected all the Czech Republic's arguments and enforced the award. [01:13:38] Speaker 04: That's the most recent decision, and we put that in there as the court knows. [01:13:46] Speaker 04: I think I've covered all the open issues, but I'm happy to answer any other that the court has. [01:13:51] Speaker 02: Thank you, counsel. [01:13:52] Speaker 02: Thank you, counsel. [01:13:53] Speaker 02: Thank you. [01:13:54] Speaker 02: The case is submitted.