Singapore arbitration begins over failed vaccine deal

A legal dispute has been filed at the Singapore International Arbitration Centre between pharmaceutical firms Prestige Biopharma and Biolexis Pte regarding the unsuccessful production of Russia's Sputnik Light COVID-19 vaccine. Prestige is seeking $136.32 million in alleged lost profits, while Biolexis has refuted the claims. The arbitration also involves India's Enso Healthcare, a procurement partner of the Russian Direct Investment Fund, the sovereign wealth fund that backed the vaccine's development.

The conflict stems from a preliminary manufacturing agreement signed in August 2021, under which Prestige asserted that its South Korean facility was prepared to produce the vaccine, with initial delivery expected by October. Due to pandemic-related travel restrictions, Biolexis - unable to conduct an on-site audit - relied on Prestige's representations and transferred $13.632 million to secure production capacity. The agreement included a clause guaranteeing a refund if production timelines were not met.

However, Prestige later revised its timeline, pushing production to December 2021, before ultimately admitting in November that its facility was not ready. Biolexis subsequently discovered that Human Vaccine, the RDIF subsidiary holding intellectual property rights to Sputnik Light, had inspected Prestige's plant but did not provide the necessary cell banks - a critical component for vaccine manufacturing - for undisclosed reasons.

Biolexis terminated the agreement and demanded reimbursement, while Prestige countered with an $11.69 million claim for procurement and storage costs. In January 2023, Prestige escalated its demand to $136.32 million, citing lost profits, and initiated arbitration after mediation failed.

Biolexis has dismissed the claims as unfounded, arguing that the preliminary agreement explicitly excluded liability for lost profits and indirect damages. Legal analysts suggest Prestige faces significant hurdles in proving its case, particularly in establishing foreseeability of damages.

RDIF declined to comment, and responses from Prestige, Biolexis, and their legal representatives remain pending.