EU v. AstraZeneca - both sides win but no side sides with the CISG?

by Till Maier-Lohmann, 23 June 2021

Fans of the CISG and of health did not have to wait long: Only two months after the EU Commission's filing of its suit against AstraZeneca AB on 26 April 2021, the Tribunal de première instance francophone de Bruxelles on 18 June 2021 rendered a judgment under Article 584 of the Belgian Judicial Code. Under this provision, the parties can ask the President of the respective court to decide a matter provisorily in urgent cases. AstraZeneca was found to have breached the contract and was ordered to deliver 50 million doses of COVID-19 vaccine in three monthly installments or pay 10 € for every dose not delivered on time. The EU Commission's claim for further deliveries - the Commission had demanded delivery of 390 million doses of vaccine to the extent that these doses had not already been delivered - was dismissed by the court.

Silence regarding the applicable law

While interesting for many reasons, the judgment is featured on CISG-online first and foremost because of the potential applicability of the CISG to the Advance Purchase Agreement between the EU and AstraZeneca. Since the prima facie substantiation of the claim is one of the prerequisites for the judge to grant the interim measure (cf. p. 39, para. 28 of the judgment), it is not apparent why the Court should be exempted from assessing the applicable law. Yet, the decision contains no explicit reference to the international character of the contract that may give rise to questions of the applicable law. On page 39, para. 29 the Court claims Article 1156 and other Articles of the old Belgian Civil Code to be applicable to the interpretation of the contract. Whether this application is due to the to the choice of law clause in section 18.4 of the APA that declares 'Belgian law' to be applicable, due to the parties’ arguments or whether the international character of the contract was assumed to be irrelevant because of the proceedings' preliminary character remains open to speculation.

Belgian stance on choice of a Contracting State's law under Article 6 CISG

If the choice of law clause was found to be decisive, the provisional decision by the Brussels Court of first instance might be in conflict with other Belgian decisions that have considered the CISG to be part of Contracting States’ laws. They found – in line with the overwhelming majority of case law in other jurisdictions and with the prevailing opinion in literature – that the mere choice of 'Belgian law' does not suffice to exclude the Sales Convention's applicability under Article 6 CISG.

This reasoning seems to equally apply in the case at hand. It goes without saying that there could be other reasons why the CISG was not applicable to the present contract, notwithstanding the choice of law (see for a detailed discussion, Ben Köhler, Global sales law in a global pandemic: The CISG as the applicable law to the EU-AstraZeneca Advance Purchase Agreement?), but the respective uncertainty would appear to have warranted at least some remarks in the decision. The urgency and complex facts of the case and (potentially) the parties’ arguments might explain, but not justify the lacuna.

Outlook

Notably, the EU on 11 May 2021 initiated a second, non-preliminary proceeding in the same matter in which the merits of the case (and, consequently, potentially also the applicable law) will be fully examined. Although the decision at hand does not have a binding character for the second decision, it will be interesting to see whether both parties’ apparent reliance on unharmonized Belgian law in the first proceeding could be considered an implicit, subsequent exclusion of the CISG (see on implicit exclusions of the CISG during proceedings, Julian Juhasz, IHR 2021, 89-95 [in German] fresh from the press). Fans of the CISG will, thus, have to wait a bit longer, as will the fans of health, inter alia due to the delays in the delivery of the vaccine in dispute.