2021 LS&HC Horizons - Flipbook - Page 48
Arbitration looming large in life sciences
Life sciences is big business. The
pharmaceuticals market expects global
revenues to exceed US$1300 billion in 2021.
Market players cooperate on the basis of a
range of contractual arrangements, such as
licensing agreements, R&D agreements, copromotion contracts, joint venture, and other
M&A agreements, or supply and distribution
agreements. Key players reported thousands
of the above agreements, among those a large
number of R&D and licensing agreements,
It is no overstatement to say that all players
in the life sciences sector operate on a global
scale. Notably Asian market players feature
prominently. China has become the leading
supplier of active pharmaceutical ingredients,
intermediates, and basic chemicals by volume.
All 20 of the world’s leading pharmaceutical
companies have manufacturing facilities in
China; many have established R&D centers.
Foreign companies appear increasingly willing
to license technologies to Chinese manufacturers
and research institutes. India retains its position
as a world leader in the production of generics
and vaccines, with structural reforms kicking in.
It is thus no surprise that international
arbitration looms large in life sciences.
Arbitration is an attractive forum for any
disputes arising out of cross-border agreements.
It provides for a neutral forum, the parties can
select their arbitrators and tailor the proceedings
as required, they can agree on confidentiality;
and, importantly, with the New York Convention
providing for a regime for the recognition and
enforcement of foreign arbitral awards, arbitral
awards are enforceable even where court
judgements are not, such as in Mainland China.
Currently, life sciences disputes account for
between 5 percent and 10 percent of the overall
caseload of major arbitral institutions such as
the International Chamber of Commerce (ICC)
and 15 percent of the caseload of the World
Intellectual Property Organization (WIPO),
attracting more technology driven disputes.
The number of ICC disputes relating to the
pharmaceuticals and health sector has more
than doubled between 2015 and 2020, from 30
to 67 disputes. Disputes tend to be very large,
with amounts in dispute exceeding US$1 billion.
The 2013 WIPO Survey on commercial disputes
in technology driven sectors such as the life
sciences sector indicated that license agreements
as well as R&D agreements most commonly give
rise to disputes.
If you are considering international arbitration
as a dispute resolution mechanism for your
agreement(s), or if you are facing an arbitral
dispute, wherever you operate, please contact us.
We are here to support you.