Originally from Dispute Resolution Journal

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The Netherlands

In a judgment of the Dutch Supreme Court of June 15, 2018 (Diag v. Czech Republic, Docket No. ECLI:NL:GHAMS:2017:527) the Court denied recognition and enforcement of a Czech final arbitral award which, after having been rendered, was later revised by a different arbitral tribunal.

Background

Diag Human (“Diag”) is a Liechtenstein-incorporated blood plasma trading company which was founded by Swiss-Czech entrepreneur Josef Štáva in the 1980’s. The stated aim of Diag was to help currency-deficient Eastern Bloc states to acquire modern blood plasma technology. Diag was also active in the Czech Republic when the dispute arose with the Czech Republic after the then-Minister of Public Health of the Czech Republic sent a letter dated March 9, 1992 to Novo Nordisk, a Danish trading partner of Diag. According to Diag the letter contained statements expressing concerns about Diag’s business ethics and credibility. Diag argued that the Minister’s letter to Novo Nordisk, a major business partner of Diag, dissuaded the company from doing business with Diag, which according to Diag led to the failure of Diag’s business in the Czech Republic. On September 18, 1996, the parties agreed to submit the dispute to arbitration in accordance with Czech law. The arbitration agreement included a provision permitting either party to submit any arbitral awards rendered by the first instance arbitral tribunal (“Arbitrators”) to appellate arbitral tribunals (“Reviewing Tribunals”) for review. On March 19, 1997 the Arbitrators rendered an Interim Award, which was upheld by a Reviewing Tribunal on May 27, 1998. On June 25, 2002 the Arbitrators rendered a Partial Award (“the Partial Award”), in which the Czech Republic was ordered to pay to Diag Czech Krona 326,608,334 in compensation. The Partial Award was upheld by a different Reviewing Tribunal in a Review Partial Award dated 17 December 2002. The Czech Republic complied with its payment obligations under the Review Partial Award. On 4 August 2008, the Arbitrators rendered a Final Award in which Czech Republic was ordered to pay to Diag an amount of Czech Krona 4,089,716,666 and the earlier awarded claim of Czech Krona 326,608,334 was revoked.