EU suing AZ

[Baileysforchristmas]

Do you think it’s a good idea to sue a non profit vaccine producer in the middle of a pandemic? Especially when it’s in the contract the EU can’t sue for late delivery

www.politico.eu/article/belgium-was-warned-eus-astrazeneca-contract-lacked-teeth-documents/

So much of the analysis is speculation - the contract is governed by Belgian law (under which there is greater scope for arguments based on duties of good faith as I understand it) and has been heavily redacted, at AZ's insistence.

I dont know what remedies are available in Belgium apart from damages, but I would imagine that one aim may be to use the pending litigation as a means of forcing a decent settlement with AZ, which may involve amendment of existing contract(s)/new deal(s).

I do think it is likely that the EU believe they have a good arguable case based on breach of reasonable efforts obligations.

I would like to see the clause that suggests that AZ can be supplied from a US facility. Someone mentioned it above. If that is correct, given that it’s reported that the US are going to have about 60 million AZ vaccines going spare, it would seem more sensible for the EU to pursue that route, rather than trying to take all of the UK’s supply. Even if you have a 100% watertight contract, it does seem incendiary to demand another country’s entire supply.

@LEnferCestLesAutres

So much of the analysis is speculation - the contract is governed by Belgian law (under which there is greater scope for arguments based on duties of good faith as I understand it) and has been heavily redacted, at AZ's insistence.

I dont know what remedies are available in Belgium apart from damages, but I would imagine that one aim may be to use the pending litigation as a means of forcing a decent settlement with AZ, which may involve amendment of existing contract(s)/new deal(s).

I do think it is likely that the EU believe they have a good arguable case based on breach of reasonable efforts obligations.

I think another issue that came to light was there were negotiations and contacts in place between 3 or 3 eu member states to buy vaccines then merkel said eu commission and udvl should take over all eu procurement and all member states went with eu scheme no one opted out that I know if although they had option to. So they were not starting with a blank contract there were already terms and conditions agreed and attached . What I am confused about is deloitte. Is it typical of countries to ask them to look over contacts then informed contacts too weak but too late nothing they can do now. The article said the eu commission steering group was informed of deloitte findings. Think someone above said the layers the eu used were maybe not experience with large commercial contacts with pharmaceutical companies and the eu even itself has said we have had enough if being niave. That to me in English translation means they realise they made mistakes that the contract was not right. Its like example you local authority sending a housing solicitor to a special needs tribunal they appear to have a poor knowledge of the SEND code of practice. Sometimes you need more specialist help in some areas. Its seems odd to me the contact was not proof read before signing.

it does seem incendiary to demand another country’s entire supply.

I don't see what legal power a court in Belgium could have to compel a factory in the UK or the US, or any other country, to give up its product, that has been ordered and paid for by someone else?

Aren't AZ in the UK and AZ in the EU different legal entities?

@BuggerBognor But wouldn’t that amount to the same thing given the volumes involved? To fulfil the order, they would have to take everything made in the U.K. (and a lot more as we’re not producing sufficient volumes to meet the amount the EU has ordered).

@UserEleventyNine

it does seem incendiary to demand another country’s entire supply.

I don't see what legal power a court in Belgium could have to compel a factory in the UK or the US, or any other country, to give up its product, that has been ordered and paid for by someone else?

Aren't AZ in the UK and AZ in the EU different legal entities?

As productive as the 2 uk sites are The eu by end quarter 2 will have received 70 million az doses when they were meant to get 100million so 110million. I imagine it would take uk factories a long time to produce that amount and they wouldn't be able to do it by end of quarter 1 or 3 it would also impact on the uk supply. We simply don't make the quantities they require in the short to medium term. What we make a is drop in the ocean in terms of what they ordered and size of population.

[quote BunsyGirl]@BuggerBognor But wouldn’t that amount to the same thing given the volumes involved? To fulfil the order, they would have to take everything made in the U.K. (and a lot more as we’re not producing sufficient volumes to meet the amount the EU has ordered).[/quote]
We can't even make enough fulfill our own order as we ordered 10million from serum institute and an undisclosed amount from the Netherlands eu have blocked.
We don't even know for sure how much we have only what we vaccinated.
We think we had 5million from India 1million from eu.
So its total number az minus total UK az jabs done so far but that doesn't tell us exactly what uk produce or how much backstock which could be 2nd doses.

EU’s claim for breach of contract is against the AZ Swedish entity which does not own or control the UK plants so it’s unlikely that the remedy EU is seeking is even within the court’s jurisdiction

But the litigation could still be used as a means of leveraging a settlement/new deal that extended to the UK plants. I emphasise that I am speculating - I have no idea what their thought processes are, but this seems a fairly obvious possibility!

BuggerBognor (great username!) Risky - agreed, though I don't think the merits of the arguments on the contract terms are as clear cut as you do.
But risky for AZ too as even assuming no UK/US style disclosure of documents (not sure what the position is in Belgian courts), AZ are surely going to have to be more transparent about the terms of their other contracts in order to make good their "reasonable efforts" argument.

Moderna - UK delivery cut, probably to avoid the export controls.

Pfizer - meeting its orders so daft to stop exports.

AZ - not meeting UK contract, so UK could bring in something similar if required. The EU really couldn't complain as it's exactly what they have done.

BBC are saying the extra 60million pfizer will arrive in autumn as booster shots so by then ensure UK population should have been vaccinate by 31st August so clearly uk government not worried eu will block pfizer but I also think uk government and az being less transparent on what we produce in uk and how much we produce..
I do think we maybe have az supply shortage but we not admitting it.
Hopefully norovax be available soon.
Theres no guarantee Janson production will go smoothly they say they can deliver eu 55million by end of June.

There is at least some information on the basis of the claim at www.reuters.com/world/europe/eu-legal-case-against-astrazeneca-begins-brussels-court-2021-04-28/

Helpfully, this also gives figures on Az's under-supply on the UK contract, also.

It does strike me that the claimants lawyers can demand hundreds of millions of doses by the end of June as loudly and as vehemently as they like. If Az doesn't have those doses (and all the evidence is they don't) then there isn't a court in the world that can actually ensure that they are produced.

It's going to be interesting to see how this plays out...

I can't help wondering if the EU is trying to prove that the UK was right to leave.

The dates are also interesting. "The EU lawyers asked for a decision before the end of June to make sure missing doses could be delivered in a timely fashion"

The UK is hoping to have finished its rollout to all adults by mid-July, and most of the last month of rollout will be to the under 30s, so won't be using Az anyway. By the time judgement is delivered the UK will have finished with Az for first doses, and will really just be mopping up a relatively small number of remaining Az second doses, at least some of which will already have been stockpiled.

Let's assume that timetables don't slip (rare in my experience of lawyers) and that the court awards the EU full access to the supply from UK factories. So a resounding victory for the EU. It gets them those doses maybe three or four weeks sooner than it would if it just let the distribution play out naturally.

The UK production is say 2.5 million doses a week. If the EU gets everything it is requesting from the court, it might gain them a total of say 10 million doses.

And that's assuming there's no appeal, and no counterclaim through the UK courts, which would inevitably cause delivery timetables to slip.

Whatever this is about, it isn't about procuring meaningful quantities of vaccine.

(@BuggerBognor - also, thank you for the compliment!)

I think that's what I don't get! Even a Belguim court ordering AZ to hand over UK manufactured doses - a Belguim court has no jurisdiction in UK.

Are they simply trying to get out if paying for the doses they already have?

@WaitinginWorcestershire It is possible to get a judgement in one country and enforce it in another. It’s a complicated process and I’m not saying that’s what will happen here, but it can happen in some situations.

@Motorina I also agree and that’s why I said above that I think the EU’s claim is incendiary. It’s going to wind the U.K. up but won’t actually achieve what they want - the fulfilment of the contract.

The Govt. has said that once we've completed our vaccination programme, any spare doses will go to Covax. Is the EU intending to claim the doses should go to them instead?

Matt Hancock said today, speaking about the biomedical and pharmaceutical industries, "We will not ever block exports to anywhere around the world of a product made for a market around the world."

I don’t think we should allow ourselves to be wound up by this though. The U.K. needs to keep calm and keep jabbing.

The UK can only do this with doses we have purchased. They can't really tell AZ what to do with their plants.

So if AZ want to supply to EU from UK plants we shouldn't stop them.

The problem is that the UK sites are already fully booked out for UK order manufacture for the next while so no spare capacity for EU.

The EU do have part of the UK supply chain though- Halix. So this has reduced the UK Supy & increased the EU supply already.