Belgian court finds AstraZeneca should have used UK production to meet EU contract

Today (18 June) Belgium’s Court of First Instance published its judgement on the case brought against AstraZeneca (AZ) by the European Commission and its member states for interim measures. The court found that AZ failed to meet “best reasonable efforts” outlined in its advance purchase agreement (APA) with the EU, importantly the court found that the Oxford production facility had been monopolized to meet UK commitments despite explicit references to it in the APA.

AZ’s actions triggered the European Union to enact very carefully circumscribed trade restrictions that were targeted at addressing this problem.

AstraZeneca will need to deliver 80.2 million doses by the end of September or incur a cost of €10 for every dose it fails to deliver. This is a long way from the European Commission’s request for 120 million vaccine doses by the end of June 2021, and a total of 300 million doses by the end of September 2021. Our reading of the judgement suggests that with the acknowledgement that the UK production should be used to meet the EU’s requirements and other production in other non-EU countries coming online these doses are probably now within reach.

The decision has been welcomed by AstraZeneca and the European Commission, but costs were allocated on a 7:3 basis with AZ covering 70%.

In its press release AstraZeneca General Counsel, Jeffrey Pott, said: “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.”

However, in its statement the European Commission welcomes the judges finding that AstraZeneca committed a serious breach (‘faute lourde') of its contractual obligations with the EU.

The President of the European Commission, Ursula von der Leyen said: “This decision confirms the position of the Commission: AstraZeneca did not live up to the commitments it made in the contract.” The Commission also says that the Commission’s “sound legal basis” - that some had brought into question - had been vindicated. 

In their press release AstraZeneca stated: “The Court found that the European Commission has no exclusivity or right of priority over all other contracting parties.” However, this wasn’t at issue, the court called for proportionality when there are conflicting contracts.

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