 United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued September 6, 2018            Decided October 26, 2018

                         No. 17-7154

                     DIAG HUMAN S.E.,
                        APPELLANT

                              v.

          CZECH REPUBLIC - MINISTRY OF HEALTH,
                       APPELLEE


        Appeal from the United States District Court
                for the District of Columbia
                    (No. 1:13-cv-00355)


    Hyman L. Schaffer argued the cause and filed the briefs for
appellant.

     Alana E. Fortna argued the cause for appellee. With her on
the brief was Leonard Fornella. Dean A. Calland entered an
appearance.

   Before: SRINIVASAN and WILKINS, Circuit Judges, and
RANDOLPH, Senior Circuit Judge.

   Opinion for the Court filed by Senior Circuit Judge
RANDOLPH.
                                2

     RANDOLPH, Senior Circuit Judge: This is an appeal from
the judgment of the district court refusing to enforce an arbitral
award against the Czech Republic Ministry of Health and in
favor of Diag Human, S.E., a corporation organized under the
laws of the Principality of Liechtenstein. Under the New York
Convention, federal courts enforce duly rendered foreign arbitral
awards, subject to certain exceptions. The district court held
that this award fell into one of those exceptions – the award was
not “binding on the parties.” Diag Human, S.E. v. Czech-
Ministry of Health, 279 F. Supp. 3d 114, 121 (D.D.C. 2017).
For the reasons that follow, we agree.

     The parties have been engaged in this dispute for nearly
three decades. The arbitration commenced after the Czech
Republic allegedly interfered with Diag Human’s blood plasma
business in the early 1990s. The then-Minister of Health
allegedly violated unfair competition laws by sending to Novo
Nordisk, a Danish company and Diag Human’s major business
partner, a letter accusing Diag Human of ethical violations. This
led Novo Nordisk to cease work with Diag Human, which was
fatal to the latter’s business in the Czech Republic. Further
details concerning the background of the dispute are recounted
in this court’s previous opinion and not necessary to repeat here.
Diag Human, S.E. v. Czech-Ministry of Health, 824 F.3d 131,
132–34 (D.C. Cir. 2016), cert. denied, 137 S. Ct. 1068 (2017).

     A series of arbitral awards flowed from proceedings
pursuant to the parties’ arbitration agreement. Initially, in 1997,
an arbitral panel confirmed that the Czech Republic had
committed a wrongful act and caused damages to Diag Human
(the “Interim Award”). This award left the issue of the amount
of damages for later proceedings. In 2002, this was followed by
a partial damages award covering undisputed damages of
approximately $10 million (the “Partial Award”). In 2008, an
additional arbitral panel considered the full scope of damages
                                 3

and awarded Diag Human approximately $400 million in
damages and interest, with further interest accruing until
payment (the “Final Award”). The action in the district court
sought to confirm the 2008 Final Award.

     “One of the traditional features of arbitration is its exclusion
of appeal . . ..” See Alexander J. Bìlohlávek, Arbitration Law
of Czech Republic: Practice and Procedure 1349 (2013).
Accordingly, most international arbitral systems use a single
panel to produce a final and binding award. See, e.g., United
Nations Comm’n on Int’l Trade Law, Arbitration Rules art.
34(2). But Czech arbitration law permits parties to agree to a
review process in which a second arbitral panel can revisit the
original award with the power to uphold, nullify, or modify it.
Zákon o rozhodèím øízení a o výkonu rozhodèích nálezù [Law
on Arbitral Proceedings and Enforcement of Arbitral Awards],
Zákon è. 216/1994 Sb. § 27 (Czech) [hereinafter Czech
Arbitration Law]. Although in the Czech Republic this
procedure is “rarely used by parties in practice,” Bìlohlávek,
supra, at 1350, it was used here. The arbitration agreement
allowed a party to request a review of any arbitral award within
30 days of receipt.

     Each of the three awards was submitted for review
according to this procedure. The Interim and Partial Awards
were confirmed and upheld by review panels consisting of
different arbitrators. In each case, an “arbitral award” was
issued pursuant to § 23(a) of the Czech Arbitration Law
explicitly upholding the decision of the first panel. The arbitral
awards entered into legal force and effect following these
confirmations. After the Final Award was issued, each of the
parties challenged it and requested review, although Diag
Human later withdrew its request. The review panel, after a
lengthy delay, did not explicitly confirm the arbitral award as
had the previous review panels. Instead, it issued a “Resolution”
                                4

which “discontinued the proceedings.” The effect of this
Resolution on the 2008 Final Award is at the core of this
controversy.

     We enforce foreign arbitral awards according to the New
York Convention, “part of a ‘carefully crafted framework for the
enforcement of international arbitration awards.’” Belize Bank
Ltd. v. Gov't of Belize, 852 F.3d 1107, 1110 (D.C. Cir. 2017)
(quoting Belize Soc. Dev. Ltd. v. Gov’t of Belize, 668 F.3d 724,
729 (D.C. Cir. 2012)), cert. denied, 138 S. Ct. 448 (2017); see
also 9 U.S.C. §§ 201–208. A court “shall confirm the award
unless it finds one of the grounds for refusal or deferral of
recognition or enforcement” as specified in the Convention. 9
U.S.C. § 207. Article V sets out the circumstances that enable
a court to refuse to enforce an award; these are tightly construed,
and the burden is placed on the party opposing enforcement.
Convention on the Recognition and Enforcement of Foreign
Arbitral Awards art. V, opened for signature June 10, 1958, 21
U.S.T. 2517 [hereinafter New York Convention]; TermoRio S.A.
E.S.P. v. Electranta S.P., 487 F.3d 928, 934–35 (D.C. Cir.
2007). “Recognition and enforcement of an award may be
refused” if the “award has not yet become binding on the
parties.” New York Convention art. V(1)(e). An award may
also be “set aside” by a “competent authority” of the rendering
jurisdiction. Id.

     Under these circumstances, the district court found that the
terms of the parties’ arbitration agreement precluded the award
from entering into legal effect to become “binding” under
Article V(1)(e). The agreement specified that the award would
go into effect “[i]f the review application of the other party has
not been submitted within the deadline.” Arb. Agreement ¶ V.
The district court therefore ruled that because a party requested
                                 5

review, and the review “ended the arbitration,” the award did not
go into effect. Diag Human, 279 F. Supp. 3d at 120–21.1

     We agree with the district court’s result, but for different
reasons. Not only the termination of the review, but also the
content of the arbitration review panel’s “Resolution,” prevented
the Final Award from becoming binding. Under the agreement,
the parties had recourse to another arbitration panel, which was
sufficient to prevent the award from becoming binding at that
time. See Ministry of Def. & Support for the Armed Forces of
the Islamic Republic of Iran v. Cubic Def. Sys., Inc., 665 F.3d
1091, 1100–01 (9th Cir. 2011) (citing Fertilizer Corp. of India
v. IDI Mgmt., Inc., 517 F. Supp. 948, 958 (S.D. Ohio 1981)).
The Resolution resulting from the review proceeding does not
permit the award to stand. Instead, it offers multiple grounds for
the award’s invalidity. The review panel had the power to
nullify the award under Czech arbitration law, and it
discontinued the proceedings as a whole. Both the text of the
Resolution and the import of Czech law lead us to this result.

     The language of the Resolution indicates that it invalidated
the Final Award. As a threshold matter, the parties disagree
about whether the “reasoning” – that is, the longer explanatory
portions of the award – can aid in interpreting the decretal
paragraphs which are the legally operative portion of the award.
According to the parties’ experts in Czech law, when those
upfront paragraphs are ambiguous, the reasoning may be used
to decipher them. The review panel’s pronouncement that “[t]he
proceedings are discontinued,” in this two-step arbitration, is
ambiguous and makes consultation of the reasoning necessary.



    1
      Diag Human contends that this leads to an absurd result because
a voluntarily withdrawn review request would result in invalidating
the award.
                                6

     The review panel found jurisdictional problems with the
entirety of the arbitration after the conclusion of the first
damages phase. Among other findings, the review panel held
that the Final Award should have been precluded as res judicata
by the earlier Partial Award. That 2003 Partial Award, which
resulted in the payment of $10 million to Diag Human, was
deemed by the rendering panel to represent only a subset of the
damages of the claim, leaving the full amount to be decided
later. The review panel saw it differently. Because there was an
award in legal force on the claim, and because “a partial
decision may only be issued on one of otherwise separate claims
or on a claim against only one of several defendants,” the partial
decision here was actually a complete decision. The Partial
Award did not specify that it dealt only with a separate claim or
only with one of several defendants. The review panel noted
that the 2008 Final Award “merely deducted the previously
awarded amount from the remaining amount of lost profits,”
suggesting that it was revisiting an issue previously decided.
The review panel therefore concluded that the “obstacle” of res
judicata was “effectively established.” There is a remedy when
a prior decision is res judicata: the later proceedings must be
discontinued.

     The review panel’s Resolution identified another problem.
During the pendency of the arbitration, third parties initiated
judicial proceedings concerning assignment of parts of the
claims of the parties. The review panel noted that “[p]arallel
court and arbitration proceedings on the same case” are not
allowed by Czech law. The parties thus waived further
arbitration by not invoking the arbitration agreement to bar these
court proceedings. This let the court proceedings take
precedence. The arbitration review panel applied this logic to
the interventions as well as to the original dispute, providing an
additional reason undercutting the Final Award, though the
                                7

panel noted that “the obstacle of res [j]udicata had arisen
earlier.”

     Diag Human believes that this section of the Resolution
denies the review panel’s jurisdiction to look at the award. We
find no clear statement to this effect, much less a statement that
would supersede the panel’s clear statements on res judicata.
While the Resolution states that “[n]evertheless, the arbitrators
can perform any assessment (review) only on condition that a
procedurally effective request for review exists,” it never clearly
states that the review panel itself lacked jurisdiction. The panel
considered a number of issues, including the delivery of the
review request, and the duty to instruct the parties on procedural
issues, but the panel never stated that it lacked power of review.
While highlighting that the review request was “procedurally
ineffective,” the panel went on to use its jurisdiction to consider
and decide issues relevant to the Final Award.

     Diag Human attacks the underlying merits of the review
panel’s decision, particularly its discussion of res judicata, as
“plainly wrong under Czech law.” But we do not sit in
judgment of the reasoning of the arbitral decision. Mistakes of
law by the arbitral panel are not ours to correct. “It is not
enough . . . to show that the [arbitrators] committed an error—or
even a serious error” for this court to invalidate the Resolution.
Stolt–Nielsen S.A. v. Animal Feeds Int'l Corp., 559 U.S. 662,
671 (2010); see also Enron Nigeria Power Holding, Ltd. v. Fed.
Republic of Nigeria, 844 F.3d 281, 289 (D.C. Cir. 2016).

     After analyzing the issues in the case, the review panel
finished by noting that “for all the above-described reasons, the
arbitrators were forced to discontinue the arbitration
proceedings.” With the prominent discussion of res judicata –
one of those “reasons” – the Resolution discontinued the
proceedings including the previous award.
                               8

     Czech arbitral law fortifies our understanding of the
Resolution. When the “binding” status of an award is in doubt
under Article V(1)(e) of the New York Convention, the court
may look to the law of the rendering jurisdiction, though
litigation of the issue is rare. See Pactrans Air & Sea, Inc. v.
China Nat'l Chartering Corp., No. 3:06-cv-369/RS-EMT, 2010
WL 1332085, at *1 (N.D. Fla. Mar. 29, 2010) (applying Chinese
law); Fertilizer Corp., 517 F. Supp. at 955–58 (applying Indian
law and International Chamber of Commerce rules). This is true
particularly when the agreement incorporates local arbitral law,
as this agreement did here. See Aperture Software GmbH v.
Avocent Huntsville Corp., No. 5:14-cv-00211-JHE, 2015 WL
12838967, at *2–3 (N.D. Ala. Jan. 5, 2015) (determination of
binding nature does not require looking at foreign law unless the
agreement specially incorporates it). The scope of the powers
of the review arbitrators, and the interpretation of the
Resolution’s effect, thus hinge on Czech law. This is true even
though in an enforcement proceeding, federal law governs the
procedure.

     Under the law of the Czech Republic, there are two
outcomes of an arbitral proceeding: an arbitral award or a
resolution (“order” or “decree” in some translations). Czech
Arbitration Law § 23. An arbitral award is judicially
enforceable and is used when any legal obligation is imposed on
a party. Bìlohlávek, supra, at 1138–39. When an arbitral award
is not to be issued, a resolution ends the proceedings. Id. at
1139. The review panel in this case issued a resolution.

     Diag Human argues that a resolution may not be used to
nullify an arbitral award. This is not clear from Czech
arbitration law, which does not spell out exactly when an award
or resolution is required and how it would impact the review
procedure. Czech Arbitration Law § 23. Experts equivocated
on the point, although resolutions generally decide procedural
                                 9

issues. J.A. 933 (“I generally do not believe that an arbitral
award should (or can according to the applicable law) be
cancelled by a resolution, although the review arbitrators may
in theory indeed proceed in this way.”) (emphasis added); J.A
575 (noting that in Czech civil litigation, resolutions are used “to
decide on the conditions of the proceedings; on discontinuing or
suspending the proceedings” and other procedural matters). We
are unconvinced that the panel’s failure to use the nomenclature
of “award” changes the import of the decision. If the panel
wanted to uphold the award, it could have done so. Both the
Interim and Prior Awards were explicitly confirmed with arbitral
awards.

     When the panel “discontinued the proceedings,” it was
ending both the review and the original panel’s work. A panel’s
review of a prior arbitral award is not a separate arbitration
proceeding, but part of a single arc of arbitration. “The revision
of an award shall be part of the arbitral proceedings . . ..” Czech
Arbitration Law § 27; see also J.A. 605–06 (opinion of Aleš
Gerloch & Vladimír Balaš), 904 (opinion of Alena Bányaiová).
If the original and review panels are part of the same arbitral
proceedings, the “proceedings” that are “discontinued”
constitute the entire arbitration. See Bìlohlávek, supra, at 1139
(“Arbitrators may issue a resolution terminating the proceedings
at any time during the proceedings should the procedural
circumstances allow . . ..”). This can be done even when the
original panel issued an award, which prevents that award from
having “legal force and effect.” Id. at 1372. Coupled with the
statements that strongly suggest that the Final Award was fatally
flawed, we must conclude that the review arbitrators included
both panels in its discontinuation of proceedings.

    It is undisputed that the review panel had the powers that it
exercised here. The review panel had power to set aside the
award. It had the additional power to reach judgments on the
                               10

merits, to collect new evidence, and to modify the award as it
saw fit. Id. at 1352–56. Terminating the proceedings, and in
doing so nullifying the arbitral award, was within the powers
delegated to the review panel. The parties’ agreement
contemplated this result by mandating review mirroring Czech
Arbitration Law § 27.

     Diag Human’s remaining argument is that the review
panel’s nullification of the award is against public policy and
that this court should not give it effect. While we have
recognized that there is a limited “public policy gloss” on
Article V(1)(e) of the New York Convention, “the standard is
high, and infrequently met.” TermoRio, 487 F.3d at 938
(quoting Ackermann v. Levine, 788 F.2d 830, 841 (2d Cir.
1986)). In order for us to overturn the “Resolution,” the conduct
at issue must be “repugnant to fundamental notions of what is
decent and just in the State where enforcement is sought.” Id.
at 938 (quoting Ackermann, 788 F.2d at 841). We hesitate to
disturb the conclusions of the review arbitrators on this basis.
The evidence concerning the rendering of the Resolution was
too inconclusive to meet the level of “repugnance” required for
this rarely met standard. Accordingly, the district court did not
err in failing to set aside the decision of the review panel on
public policy grounds.

    We hold that the Final Award was not “binding” on the
Czech Republic and therefore not enforceable.

                                                       Affirmed.
