Back in April, a civil court in Brussels issued a non-final ruling in the case of Pfizer Export vs. Poland. The court ordered Poland to take delivery of roughly 64 million doses of COVID-19 vaccines and pay Pfizer around €1.3 billion, plus interest and legal costs. It rejected Warsaw’s arguments that circumstances had changed, demand had fallen, the war in Ukraine had placed an exceptional burden on the country, and Pfizer had abused its dominant market position. Poland can appeal, but the ruling may be enforced before the appeal is decided. The case is being heard in Belgium because the vaccine contract, negotiated by the European Commission on behalf of EU member states, is governed by Belgian law.

Pfizer has since used the ruling to freeze funds that Eurocontrol was due to transfer to the Polish Air Navigation Services Agency (PAZP). Eurocontrol collects route charges from airlines and passes the relevant share on to national air navigation agencies. In Poland, these payments account for more than 80% of PAZP’s revenue. That is why the case has attracted so much attention. PAZP is responsible for ensuring the safety of air traffic over Poland. It pays air-traffic controllers, maintains radar and communications systems, and finances essential infrastructure.

A prolonged freeze on its main source of income would clearly create serious problems. It is unlikely, however, to ground flights. The Polish government has already said that it will support the agency if necessary. In practice, the missing revenue would likely be made up with funds from the state budget. Once again, taxpayers would be left to foot the bill. This article does not attempt to assess whether purchasing COVID-19 vaccines was, in general, the right policy response, or whether governments should have taken a different approach. It would be too easy to portray Pfizer as a ruthless multinational and Poland as an innocent victim. But a state cannot sign an agreement during a crisis and later decide that it no longer applies simply because political or economic conditions have changed. If governments could walk away from contracts without consequences, companies would charge the public sector more to cover the additional risk.

That does not, however, mean that every method of enforcement is justified. PAZP did not negotiate the vaccine contract. It did not order the doses and had no influence over decisions made by the Ministry of Health. The frozen funds are not simply cash belonging to the Polish government. They come from fees paid for specific air-navigation services. Poland may ultimately have to pay Pfizer. That does not necessarily mean that the revenue of a separate agency responsible for aviation safety should be treated like any other state asset.

The dispute also highlights broader weaknesses in public procurement. In 2021, politicians had every reason to order too many vaccines rather than too few. A shortage could have damaged public confidence and cost lives. The consequences of over-ordering, by contrast, would only become apparent years later, when someone else might already be in office. A private company that misjudges demand suffers a financial loss. When a government makes the same mistake, the cost is usually spread across millions of taxpayers.

Pfizer is unlikely to close Poland’s airspace. By targeting PAZP’s revenue, however, it has shown how a poorly designed public contract can create problems far beyond the original subject of the agreement. Poland should honor its obligations if the courts ultimately confirm them. It should also ensure that future emergency contracts are more transparent, more flexible, and better against decisions whose costs are ultimately passed on to unrelated institutions and the public.

Source, Šaltinis Łukasz Wojdyga,

Director of the Center for Strategic

Studies Warsaw Enterprise Institute