Tuesday, February 02, 2021

AstraZeneca, the European Commission and Clause 13.1.(e)

There are better lawyers, and more popular blogs to read for the general take on the EU/AstraZeneca stramash. I just wanted to put down on paper what I think are the more egregious misreadings of the EU/AZ APA that are out there, why they're wrong, and what the actual position is. Usual disclaimer of not being a Belgian lawyer applies, but with the added proviso that in international contract law this doesn't matter very much. Pacta Sunt Servanda and all that, and generally speaking words mean what they say.

Best Reasonable Endeavours

The previous vaccine procurement contract that had been made public contained a "best reasonable efforts" qualification to the obligation by the company to produce vaccines, and it seemed pretty obvious that the AZ APA would contain the same sort of thing. It was a surprise, therefore, to hear the President of the European Commission deny that any such provision existed

Asked whether the quantities were subject to a "best-effort" limitation, von der Leyen responded: "No. There are binding orders and the contract is crystal-clear. AstraZeneca has expressly assured us in this contract that no other obligations will stand in the way of fulfilling the contract."

It was less of a surprise, on reading the contract to see that exactly that "best reasonable effort" language repeated throughout, from the Recitals through to the active clauses.

AZ's obligations

The two potentially relevant clauses covering AZ's obligation to supply the vaccines were 5.1. and 5.4. as below:

5.1    Initial Europe Doses. AstraZeneca shall use its Best Reasonable Efforts to manufacture the Initial Europe Doses within the EU for distribution, and to deliver to the Distribution Hubs, following EU marketing authorization... [the redacted schedule of vaccine delivery]/

5.4.  Manufacturing Sites.   AstraZeneca shall use its Best Reasonable Efforts to manufacture the Vaccine at manufacturing sites located within the EU (which, for the purpose of this Section 5.4 only shall include the United Kingdom)...

There has been (and continues to be) a good deal of controversy as to whether manufacturing sites located in the UK can be considered as a part of AZ's obligation to produce the Initial Europe Doses. As a pure matter of construction, I don't think they can be. Where a contract explicitly states that the effect of a specific definition is being varied only for the purposes of one clause, it means just that. When 5.1 states that the obligation is to manufacture within the EU, "the EU" means just that, not "the EU plus the UK", which is only the correct definition for the purposes of clause 5.4.

All good fun, but I don't think in any way relevant to what AZ's obligations were under this contract. They were, as set out in the Recital, to "use its Best Reasonable Efforts to build capacity to manufacture 300 million doses of the vaccine" and, as set out in 5.1., to "use its Best Reasonable Efforts to manufacture the Initial Europe Doses within the EU for distribution."


Did AZ do so? Well, that's a factual question, but the fact that the sites already in production were expected to produce the required number of vaccines on schedule, and that it was unexpectedly low yield from one of the plants that caused AZ to miss its target would strongly suggest that AZ did indeed make its Best Reasonable Efforts to build sufficient capacity, and to make the required number of vaccines, and that it was basically bad luck that has caused the problems. So, any attempt by the EC to sue AZ for damages for breach would, I think, be doomed.  

UK vaccines stocks

This then takes us to the main reason that the EC are so furious. Under a separate contract with the UK, AZ has no current issues with supply. The vaccines ordered by the UK are being delivered by AZ. This has made the EC think that the UK is cheating - taking more than its fair share of the total number of vaccines made by AZ. This wasn't helped by the interview given by the AZ CEO, when he said:

The UK agreement was reached in June, three months before the European one. As you could imagine, the UK government said the supply coming out of the UK supply chain would go to the UK first. Basically, that's how it is. In the EU agreement it is mentioned that the manufacturing sites in the UK were an option for Europe, but only later.

"Aha!" said the EC, "you're saying that the only reason you can't give these vaccines to us is that you promised them to the UK under a previous contract. That's a breach of contract! Look at Clause 13.1.(e)! You need to give the UK vaccines to us instead."

Clause 13.1.(e) is as follows:

(e) it [AZ] is not under any obligation, contractual or otherwise to any Person or third party in respect of the Initial Europe Doses or that conflicts with or is inconsistent in any material respect with the terms of this Agreement or that would impede the complete fulfillment of its obligations under this Agreement.

Does the contract signed by AZ and the UK breach this provision? And if so, does that breach entitle the EC to demand delivery of vaccines produced under it?

The UK Contract

Spoiler: no. The first point to look at is about the identity of the parties. The contracting party with the EU is AstraZeneca AB, Az's Swedish registered entity. I would be very surprised if the UK contract was not signed by AstraZeneca UK. There's a reasonable argument to run that contracts entered into by  AZUK are irrelevant to the representation made in 13.1.(e). I'm not sure it's one I'd like to pin all my hopes on though.

The better argument is the factual one: did the contract signed between the UK and AZ impede or conflict with the AZ's obligations under the contract? This gets to the heart of the misunderstanding: the EC are looking at vaccine supplies as a stock: there are so many vaccines and if some are promised to the UK then that means less for us. But really it's a flow: the UK ordered 100 million vaccines, so AZ built up capacity to try to meet that order; then the EU ordered 300 million vaccines, so AZ built additional capacity to try to meet that order.

AZ were obliged under their EU contract to make best reasonable efforts to build the capacity and to make 300 million doses of vaccine for the EU. These efforts, on one reading, were unaffected by the vaccines being produced for the UK and on another reading benefited from them (in that AZ had experience of producing the vaccines, and some pre-existing capacity).

Neither the EU nor the UK are buying vaccines off a shelf, where if someone gets in early they can scoop the lot. Both are investing in manufacturing capacity, and it shouldn't be a surprise that if you get your orders in early, you are more likely to get your manufacturing issues dealt with early too.

Friday, February 14, 2020

Sound judgement; sound judgment

The last time I was in court, it was for a case where the barrister had declared he could see no way in which we could lose our case. Counsel for the claimants started off, and made the case we knew that he would make, with very limited "I see"s from the judge. Our barrister stood up in return to make the case for the Respondents, and before he had said half a dozen words the judge interrupted him:

"When exactly," he said, "would you say that this particular obligation attached?"

Without going into any of the fascinating details, it was a killer of a question. Literally: the moment he asked it, I knew that we were completely sunk (as, indeed, the vessel in question almost had been). Most judges have a habit of making it very clear which way their thoughts are going very early. It's a habit that is even more pronounced in their judgments. 

There was once a case about whether some poor chap had been missold a skiing holiday (the "house party" advertised consisted of himself and nobody else, and the skis available for hire were half size). Lord Denning started his judgment like this:
Mr. Jarvis is a solicitor, employed by a local authority at Barking. In 1969 he was minded to go for Christmas to Switzerland. He was looking forward to a ski-ing holiday. It is his one fortnights holiday in the year.
In another case, newcomers to a village complained about the nuisance of cricket balls from the village green landing in their garden. Denning (once again) began like this:
In summertime village cricket is the delight of everyone. Nearly every village has its own cricket field where the young men play and the old men watch. In the village of Lintz in County Durham they have their own ground, where they have played these last 70 years. They tend it well. The wicket area is well rolled and mown. The outfield is kept short . . [y]et now after these 70 years a judge of the High Court has ordered that they must not play there anymore . . [h]e has done it at the instance of a newcomer who is no lover of cricket.
Denning was in the minority on that one, but even so it's pretty obvious from the opening words of each judgment exactly which way the ruling is going to go.

So it is with the recent Case of the "Transphobic" Policeman (which is a Sherlock Holmes story manque if ever I heard one). The facts were that a retired copper retweeted a fairly disobliging poem about transwomen, and various other tweets on the same subject that someone found objectionable. They contacted the police, who promptly turned up at Harry Miller's workplace to tell him that they were recording the incident as a "non-crime hate incident". He then sued the police on the basis that they had no right to do any such thing on the basis of what he had tweeted.

The full (alarming) facts of the case are well set out in the judgment, but if you want to know the outcome, you only need to read the first paragraph:
In his unpublished introduction to Animal Farm (1945) George Orwell wrote:
“If liberty means anything at all, it means the right to tell people what they do not want to hear.”
In a case about online freedom of speech, you know how the rest is going to go from the first line...

Wednesday, February 12, 2020

Political nepotism

There's a bit of a humdinger in today's Guardian by our old friend Zoe Williams.
Thanks to Boris Johnson, political nepotism is making a comeback
The hook for this accusation is that Stanley Johnson, Boris's dad, was invited to a discussion of environmental matters by the Chinese ambassador, and then emailed various bods in Government to pass on a message for Boris. This is embarrassing only because he accidentally copied in a BBC journo.

It ought to go without saying that there's nothing obviously nepotistic about this - Johnson Sr had no official role, was not there on the Govt's behalf, and is pretty obviously not on the make. Further, as Zoe recognises:
Stanley Johnson does, in fact, have considerable experience negotiating the environmental policies of the EU
But, more widely, has Boris Johnson inspired political nepotism? I can't see that the article even begins to make this case. I mean, this:
Five years ago, it would have been highly unusual to find a leader’s family involved in government. You wouldn’t have expected a prime minister’s dad, for instance, to be anywhere near the political arena.
This may be explained by the fact that in 2015 the PM's dad had been dead for five years.

The charge of nepotism clearly, obviously sticks when made against Donald Trump - that's the easiest target imaginable. But it equally obviously fails to land against Boris Johnson. But it's not as if British politics is a target-free environment. On the contrary, we have an example of the son of a party leader getting a billet as chief of staff for the deputy, the son of a former deputy leader getting protected from extremely serious allegations by virtue of his birth, and the former lover of the most senior Trade Unionist rising to the top of her party.

Oddly, however, Labour doesn't get a mention.

Friday, February 07, 2020

Ladies steaks

Via Tim, I'm afraid that this story in the Telegraph triggered (yet) another African reminisce.
A steak restaurant in Liverpool has launched a ‘ladies fillet’ because they say that their female diners struggle to eat the larger cuts. 
The steak “is for the ladies” boasts the menu of the Manhattan Bar & Grill on Fenwick Street, which offers a cheaper, smaller, fillet for women. 
The restaurant said that they had introduced the 8oz steaks after they received “countless queries” from female visitors and hen parties asking if they had anything smaller than their classic 10oz fat free version.
Stax Steakhouse in Mutare (tucked away in a shopping arcade) served about the best steaks I'd ever had  up to then (I was 18, so not exactly a gourmand). They were also enormous (standard 12oz, T-bone something ludicrous like 18oz). Tucked away at the bottom of the menu was the 250g "Ladies' steak", the description of which was something like "Not man enough for our steaks? Maybe this one's for you." Put it down with the adverts for Madison Reds: "Real Men Smoke Madisons".
But some people have criticised the restaurant and said that the gendered menu is sexist.
 They definitely wouldn't have liked Zimbabwe in the 90's...

Tuesday, February 04, 2020

Mad Mike

Now there's someone I assumed had died decades ago! He'd be absolutely delighted with his Times obit:
“Mad Mike” Hoare was perhaps the best-known mercenary since Xenophon. Like the ancient Greek general, he had a remarkable gift for leadership in trying circumstances, notably in the mid-1960s in what became known as the Democratic Republic of Congo (DRC), where his “Wild Geese” saved thousands of lives during the Simba (Lion) rebellion.
Congo Mercenary is a great book (although it should probably be taken with a pinch or two of salt - Mike Hoare was definitely not averse to polishing his legend a little). I'll have to drag it out and have another read...

Friday, January 31, 2020


This is an absolutely lovely piece about the Harare Sports Club by Liam Brickhill - whose father I am sure appears in my copy of Di Mitchell's Gook Book (technically "African nationalist leaders in Zimbabwe: Who's Who 1980", but that was too much of a mouthful for the Rhodies).

The only time I went to the HSC was to watch an indescribably tedious day of a Test between Zimbabwe and New Zealand watching Grant Flower grind out 150 with 8 men out on the boundary as the Kiwis tried to slow things down. The poor girls we'd taken with us tried very hard to keep watching (when not ogling Chris Cairns), while the rest of us got cheerfully smashed in Castle Corner.

Still, second best memory of cricket in Zimbabwe, shortly behind taking a screaming catch in the gully off a chap called Dion at the Mutare Sports Club only to find that the ball had come straight off the side of his head.


John Kampfner in today's Times asks why the UK doesn't have a second city that matches London:
Compare the UK with other equivalent countries. Spain has two major centres: Madrid and Barcelona. Italy’s are Rome and Milan. Russia would cite Moscow and St Petersburg. Australia: Sydney and Melbourne. Germany has several, as has the United States. The only country of similar size and weight that is as over-centralised as Britain is France.
There are perfectly good historical reasons why this should be the case. Spain is the result of the union of the kingdoms of Aragon and Castile, with Madrid and Barcelona the respective capitals. Italy only became more than Metternich's geographical expression in the mid 19th Century, and unification was only completed in 1870 - Milan and Rome were two of the many principal Italian cities. Russia has moved the capital between Moscow and St Petersburg more than once, and Germany, the USA and Australia all have their origins as unions of more or less independent states. 

The UK and France are nation states (England so dominates the UK that the capitals of Scotland. Wales and Northern Ireland are inevitably over-shadowed), without the history of amalgamation that all Kampfner's examples share. It's pretty much inevitable that if a city is a nation's capital for a thousand years it will dominate culturally, politically and economically.

Wednesday, January 29, 2020

Getting to the heart of the matter

Poor old Raphael Behr. As someone who has hit 40 and is still accelerating, I am naturally sympathetic to anyone struck down while exercising. But there does seem to have been a slight silver lining in that he has put his finger on the biggest problem with the entire Remain referendum campaign, and continuity Remain guerilla campaign:
Remainers lost the argument with arch, eye-rolling negativity. In 2016 the pro-European case was made exclusively in terms of loss – forfeited growth, shrunken prestige, jettisoned jobs – while the leavers advertised gains. After the referendum, those Brexit promises were assailed by fact-checkers, myth-busters, expert debunkers, but what was the counter offer? What would leavers get in exchange for surrendering a prize for which they had voted, to which they were democratically entitled and which they had not yet received? 
On we went, rubbishing the idea that Brexit was a bounty of freedom, sovereignty and control, irritating more than we converted, until Boris Johnson came along to lift the siege. By December, the liberation he could realistically offer voters wasn’t from Europe any more, it was from the argument encircling them. It was from us, the remainers.
I was a Remainer, and still think that the wrong decision was made in 2016. But the overwhelming tide of sneering negativity has done more than anything else to change my mind. The lack of any positive message destroyed the pro-European movement. All it has now is Terry Christian hoping that old people die.

The persistent miserabilism of the left, coupled with their self-righteous sanctimony, has been a real obstacle for them gaining power. If you want to persuade people to support you or your point of view, it's not a great idea to start by whingeing on about how awful they are, and how much you look forward to their death...