The row between the EU and AstraZeneca showed no sign of subsiding on Friday, even as the European commission published the terms of the deal struck between the two for millions of doses of the firm’s Covid-19 vaccine.
The commission’s president, Ursula von der Leyen, said it was “crystal clear” that the contract required AstraZeneca to deliver doses produced in the UK to the EU to make up for a shortfall in orders. But the firm has said this is not the case.
“There’s an expression in German, which is our equivalent of ‘clear as mud’, which is ‘clear as noodle soup’. And that’s what I think this particular kerfuffle in the contract is. I think this is clear as noodle soup,” said James Turner QC, of Quadrant Chambers, who specialises in cross-border commercial disputes.
Legal figures said the dispute was likely to rumble on to litigation, such was the lack of clarity provided, as they advanced competing arguments about where responsibility lay under the newly published contract.
Turner said he believed it required AstraZeneca to do only as much as it reasonably could to fulfil the EU’s initial order of 300m doses with stock produced within the EU, which he said must reasonably be interpreted as not including the UK.
“It seems to me that, so far as the initial 300m doses are concerned, AstraZeneca has a pretty good ground for arguing that it is not required to divert vaccine manufactured in the UK.
“And that’s the conclusion really … Essentially, clause 5.1 says quite clearly AstraZeneca will be using its best reasonable efforts to manufacture the initial doses within the EU.”
However, Richard Parkinson – a commercial contracts partner at JMW solicitors – said he interpreted the contract as requiring the firm to supply the 300m doses from manufacturing plants including those in the UK.
“If it has produced those doses, it would appear that it would have to supply them, as its efforts to date have resulted in the creation of that volume of vaccine.
“There doesn’t appear to be anything in the contract stating that the UK’s orders take priority. Therefore, AstraZeneca appears to be in a position whereby it has two customers who each seemingly have a valid claim on the doses that have been manufactured.”
Both pointed out that the contract would come under Belgian jurisdiction. While Turner stressed that he is not qualified there, he said his analysis of the document led him to believe that – should he be proven wrong and the EU proven right – AstraZeneca would have no grounds to argue that doses must not be taken from the UK to make up the shortfall.
He explained that the contract with the EU sets out that no other deal should take precedence.
Parkinson added: “Even if the UK contract does say that it should be given priority, this doesn’t affect the EU’s position – though it may give the UK another ground to bring a claim against AstraZeneca.”
Speaking yesterday, David Greene – the president of the Law Society and a senior partner at Edwin Coe, where he litigates contracts – predicted the row was likely to be settled by arbitration to avoid a court battle, should it be determined that AstraZeneca has to make good with the EU right away.