Last month, we provided our analysis of the disagreement between AstraZeneca (AZ) and the EU Commission (EU) over the supply of COVID-19 vaccinations. The Court of First Instance in Brussels has since ordered that AZ must deliver 80.2 million vaccination doses to the EU, rather than the EU’s requested 300 million doses.
The dispute stemmed from a delay in AZ’s provision of vaccine doses to the EU, which had requested 120 million doses cumulatively by the end of June 2021, and a total of 300 million doses by the end of September 2021. A key area of contention was whether AZ could be compelled to re-direct vaccines produced in the UK to the EU. The EU relied on clause 5.4 of the contract in question, which stated:
“AstraZeneca shall use it Best Reasonable Efforts to manufacture the Vaccine at sites located within the EU (which for the purposes of this clause 5.4 only shall include the United Kingdom)…”
The EU argued that this clause meant that:
- AZ can use doses manufactured in the UK to fulfil its obligations, and
- AZ must (assuming it is reasonable to do so) use those doses to fulfil its obligations.
If this was the case, it would mean that the EU had exclusivity and/or right of priority over all other parties that AZ had contracted with for the supply of vaccines. However, the Court did not agree with the EU’s position. Instead, it ordered the delivery of 80.2 million doses by 27 September 2021 – a quantity that AZ expects to substantially exceed by this date, having already supplied more than 70 million doses to the EU.
The Court also noted that AZ’s delay in providing the vaccine doses was due in part to the extremely challenging and unprecedented circumstances the manufacturer has been operating in. AZ’s General Counsel commented: “We are pleased with the Court’s order. AstraZeneca has fully complied with its agreement with the European Commission and we will continue to focus on the urgent task of supplying an effective vaccine, which we are delivering at no profit to help protect people in Europe and around the world from the deadliest pandemic in a generation.”
While the parties may now turn all of their efforts to collaborating to ensure that an effective vaccine roll-out is achieved globally, this litigation nevertheless carries important lessons for contracting parties, especially those who entered contracts during (or in relation to) the COVID-19 pandemic. AZ’s critical role in helping to bring the pandemic to an end, while operating under extremely challenging circumstances and at no profit, undoubtedly went some way in persuading the Court to make an order in its favour.
That said, the key point in our initial analysis of the case remains: if one party requires the other to do something within a certain time frame, the obligation should be expressed with sufficient certainty to make it enforceable. Had the AZ/EU contract been drafted with more clarity in the first place, this litigation might have been avoided altogether.
