The latest edition of the Spanish journal La Ley (No 90 March 2021) contains an interesting article about the contract concluded by the European Commission with AstraZeneca for the provision of COVID-19 vaccines. It is authored by Sixto Sánchez Lorenzo, the renowned expert on private international law at the University of Granada. The author deals with the liability of AstraZeneca for the failure to deliver enough jabs, leaving aside possible tortious and product liability suits for the vaccines alleged side effects.
The author argues that the agreement is a binding contract subject to the condition that a vaccine will be developed by the pharmaceutical company. In his view, the Commission acted both as a party and as an agent for (“on behalf of”) the Member States, which are therefore also parties to the contract. This will give them standing in court should they intend to sue the company. According to Sixto Sánchez Lorenzo, the Member States could bring claims individually and need not necessarily act together.
As for jurisdiction, he notes the contract’s jurisdiction clause in favour of the Belgian courts. The author considers this clause to be binding under Art 25 Brussels Ibis Regulation. He puts emphasis on the civil and commercial nature of the agreement, which clearly brings it within the Regulation’s scope. The Commission Implementing Regulation, which allows Member States under certain conditions to restrict the export of vaccines, does not change this characterisation.
In case the choice-of-court agreement would be inexistent or invalid, the courts of the state of incorporation and headquarters (in this case: Sweden) would have general jurisdiction for any claim against the company (Art 4, 63 Brussels Ibis Regulation). The author also points to the jurisdiction of the courts at the place of contractual performance (Art 7(1)(b) Brussels Ibis Regulation). In the event of a collective action brought by the Commission and the Member States, he discusses a possible parallel to the Color Drack case, where the CJEU ruled that in case of multiple places of performance jurisdiction lies with the courts at the “principal place of delivery”. These questions are however merely speculative given the contract’s jurisdiction clause in favour of the Belgian courts.
Regarding the applicable law, the contract stipulates a choice of Belgian law, which the author considers binding according to Art 3 Rome I Regulation. By virtue of this choice-of-law clause, the Vienna Sales Convention (CISG) would govern the entire contractual relation (Art 1(1)(b) CISG), including with those States that have not signed the CISG (Malta and Ireland).
With respect to the substantive law, the crucial question of course is whether AstraZeneca is liable under the contract with the Commission and the Member States, or whether it can invoke the priority of other contracts it has entered into with other parties, such as the UK. Sixto Sánchez Lorenzo refers to Art 28 CISG and the Belgian lex fori for a solution. As he underlines, Belgian law allows a claim for specific performance, contrary to the general position of the Common law.
But what if the company cannot deliver because it cannot produce enough quantities of the vaccine? Sixto Sánchez Lorenzo outrightly discards the exception to liability under Art 79 CISG because the shortage of vaccine would be the result of the dealings of AstraZeneca and not of a force majeure. Rather, the likely solution would be a proportional or “pro rata” condemnation.
This is an insightful article written by one of the masters of the profession. It is possible that the question of liability for non-performance will remain theoretical given the recent banning of AstraZeneca in various Member States. But nevertheless, other suits may arise, for which the article provides useful information.