What does the contract that Brazil signed with Pfizer for 100 million vaccines say: did it include the indemnity clause?

The CEO of Pfizer, Nicolas vaquer, reported to Congress on Tuesday that the company had offered the Argentine government a contract for more than 13 million vaccines against the coronavirus. What prevented the agreement, according to his testimony, is that “the legal framework is not compatible with some of the contractual mechanisms requested by Pfizer, which relate to compensation and other matters”. On the contrary, other countries in the region, such as Brazil, Chile, Peru, Colombia and Ecuador, have managed to strike a deal with the American pharmaceutical company.

In the case of Brazil, initially, the president Jair Bolsonaro he refused to accept the conditions imposed by Pfizer. “The contract is very clear: if you become yacaré, that’s your problem. If you become a superhero … If a woman or a man grows a beard, they start talking harshly … They have nothing to do with that, “said the president at the end of the meeting. ‘last year. The laboratory replied that the conditions demanded of the country were the same as those demanded of others, such as the United States, Japan or Chile, which had already reached an agreement. Finally, in March The neighboring country has signed a contract with the pharmaceutical company to purchase 100 million doses of the coronavirus vaccine, worth $ 10 each.

The contract that Brazil signed with Pfizer

In the document, dated March 18 and consisting of 66 pages, you can analyze Iindemnification clauses in the event of “negligence” by the service provider and waiver of sovereign immunity, the two most controversial points of the document that the Argentine government refused to sign. In addition, he mentions the possible vaccine supply difficulties and the penalties in the event of non-compliance with the announced deadlines.

Pfizer said in the document that Brazil was to make a deposit of 20% of the total amount ten days after signing the contract, for a total of US $ 1,000,010,700. He also specifies that its vaccine has not completed Phase 3 clinical trials and that, “despite the best efforts” of the company, “the product may not be successful. due to technical, clinical, regulatory, manufacturing, shipping, storage and other problems or failures ”.

The company assures that it will make “commercially reasonable efforts” to supply the vaccines agreed upon in the contract but assumes that the deadlines may not be met, since their aspirations are subject to “significant risks and uncertainties”.

Regarding the quality of vaccines, he states: “The purchaser acknowledges that the vaccine and related materials, as well as its components and constituent materials, are developing rapidly due to the emergency circumstances of the COVID-19 pandemic and will continue to be investigated for the supply of the vaccine to the buyer under this contract. The purchaser further acknowledges that the long-term effects and efficacy of the vaccine are not currently known. “

Negligence

In clause 8 of the contract, entitled “indemnification”, Pfizer demands that Brazil release it from any kind of compensation for problems involving “the research, development, manufacture, distribution, marketing or use of the vaccine.”.

However, the key to the comparison with the Argentinian case in terms of compensation is found in article 9, “insurance and civil liability”. In the section “Limits of Liability”, the contract states: “Under no circumstances will either party be liable to the other party or its affiliates, whether this is the result of a tort (including, without limitation, negligence), contract or other, for any indirect, special, consequential, incidental or punitive damage, whether by contract, guarantee, tort, negligence, strict liability or arising out of or relating to this agreement, the transactions contemplated therein or any breach thereof (whether or not reasonably foreseeable and even if the first party has been informed that the other party suffers such loss or type of loss)”.

“Pfizer will not be liable to the purchaser for direct damages., except to the extent that such direct damage is the consequence of a material breach of any representation or warranty by Pfizer under this Agreement, which directly and exclusively caused damage, ”the document continues.

And he concludes on this subject: “In no event will Pfizer and its affiliates be liable to the purchaser. [ya sea por garantía, agravio (incluyendo, sin limitación, negligencia), contrato, responsabilidad estricta o de otro modo] for any liability of Buyer to third parties, including, without limitation, for contribution, indemnity or for any claim for which Buyer should indemnify Pfizer if such claim were brought directly against Pfizer”.

On reading these clauses, we see that the company did not make requests that were significantly different from those it addressed to Argentina. Specifically, the conflict at the local level centered on Article 4 of the Vaccine Law, included at the request of the deputy of Frente de Todos Cecilia Moreau and supported by Juntos por el Cambio, which allows lawsuits in cases of “negligence”.

The aforementioned article protects from the possible execution of certain property of the national State (such as movable and immovable property which is in the country or abroad and the reserves of the Central Bank) and argues that in the event of “fraudulent, malicious or negligent” legal action can be taken against pharmaceutical companies. As stated: In the agreement with Brazil, Pfizer accepts no liability for damages, “including, without limitation, negligence”.

Waiver of sovereign immunity

Numerous versions have circulated about the claims Pfizer allegedly made to Argentina in exchange for the contract closing. Section 4 of Article 9 of the document signed by the Government of Jair Bolsonaro, entitled “Waiver of sovereign immunity”, states: “The buyer expressly and irrevocably waives any right to immunity that he or his property may have or acquire in the future. (either as sovereign immunity or any other type of immunity), including any asset controlled by any body, instrument, central bank or monetary authority of Brazil”.

According to the contract, this measure reaches “any arbitral award, order or award, or any judgment in connection with an arbitration, whether in Brazil or any other foreign jurisdiction, including, but not limited to, immunity from notification immunity from jurisdiction, or immunity from any conviction of a court or tribunal, immunity from enforcement order the penalty and immunity against the freezing of any of its assets ”.

In addition, it is specified that any dispute that may arise between Pfizer and Brazil must be resolved in the courts of New York: “The buyer undertakes not to assert said immunity in any procedure related to this contract. Buyer expressly and irrevocably submits to the jurisdiction of the courts of New York , or any other court having jurisdiction, for the purposes of enforcing any decision, order or award ”.

And he concludes on this subject: “The purchaser also expressly and irrevocably waives the application of any law in any jurisdiction which could limit or restrict its obligation to pay damages. arising out of or in connection with any claim for compensation ”.

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