* EU lawyer says AstraZeneca did not even try to respect
contract
* "Not a contract for the delivery of shoes" - AstraZeneca
lawyer
* EU wants a total of 120 mln doses to be delivered by end
of June
(Adds more from AstraZeneca lawyer)
By Francesco Guarascio
BRUSSELS, May 26 (Reuters) - A lawyer for the European Union
accused AstraZeneca on Wednesday of failing to respect
its contract with the 27-nation bloc for the supply of COVID-19
vaccines and asked a Belgian court to impose a large fine on the
company.
The EU took the Anglo-Swedish firm to court in April after
the drugmaker said it would aim to deliver only 100 million
doses of its vaccine by the end of June, instead of the 300
million foreseen in the supply contract.
Brussels wants the company to deliver at least 120 million
vaccines by the end of June. AstraZeneca had delivered 50
million doses by the beginning of May, just a quarter of the 200
million vaccines foreseen in the contract by then.
"AstraZeneca did not even try to respect the contract," the
EU's lawyer, Rafael Jafferali, told a Brussels court in the
first hearing on the substance of the legal case.
He said the EU was seeking 10 euros ($12.2) for each day of
delay for each dose as compensation for AstraZeneca's
non-compliance with the contract. This penalty would apply from
July 1, 2021, if the judge accepted it.
Jafferali said the EU was seeking an additional penalty of
at least 10 million euros for each breach of the contract that
the judge may decide.
A verdict is expected next month.
NOT A CONTRACT FOR SHOES
"This is not a contract for the delivery of shoes or
T-shirts," AstraZeneca's lawyer Hakim Boularbah told the court
later on Wednesday, stressing the complexity of manufacturing a
new vaccine.
The EU accusations were "shocking", Boularbah said, noting
the company had formulated its delivery targets based on early
estimates of production capacity. He added that the vaccine was
sold at cost.
AstraZeneca has repeatedly said the contract was not
binding as it only committed to make "best reasonable efforts"
in delivering doses.
Jafferali said that principle had not been respected because
the drugmaker had not delivered to the bloc 50 million doses
produced in factories that are listed in the contract as
suppliers to the EU, including 39 million doses manufactured in
Britain, 10 million produced in the United States and 1 million
in the Netherlands.
The lawyer said these doses were "diverted" to other
clients.
The company has said that doses produced in Britain were
reserved under a contract the British government signed with the
University of Oxford, which developed the vaccine.
AstraZeneca's lawyer said the British factories were
mentioned in the EU contract for information, but there was no
commitment to use them. They were expected to produce vaccines
solely for Britain until February 2021, when the company
expected to deliver 100 million doses to London. It has not yet
completed its deliveries to Britain.
Jafferali said AstraZeneca had pledged in the EU contract
not to have other engagements that would prevent it from abiding
by the terms of the deal.
The lawyer also said AstraZeneca had failed to communicate
to the EU in a timely manner the magnitude of its supply
problems because it repeatedly sent messages, including
publicly, that it was able to meet its targets, before finally
admitting there were large shortfalls in March.
The company had warned the EU in December of production
problems, but communicated only at the end of January, just
before the start of deliveries, a much larger cut than initially
expected for the first-quarter.
Boularbah said AstraZeneca had continuously kept the EU
informed about its production plans and problems.
($1 = 0.8173 euros)
(Reporting by Francesco Guarascio; Editing by Kirsten Donovan)
Astrazeneca (AZN)
