MOOT PROPOSITION
[Link] Pvt. Ltd. (hereinafter referred to as “VikPharm”) is one of the oldest and largest
Pharmaceutical Company in the Country with Head Office at Deltown, the capital of Indovia and
has been in existence since 1952. VikPharm’s vision is rigorously centred around offering high
quality Medicines, Drugs, Vaccines, Generics, Biosimilars, API etc. at an affordable cost.
VikPharm’s portfolio includes both established and cutting-edge formulations, offering a
comprehensive range of pharmaceutical products that address a variety of health issues
worldwide. VikPharm is renowned for formulating and manufacturing vaccines & medications at
around 25 sites in Indovia at a sustainable fashion coupled with cost effective pricing. VikPharm
pioneered the development of medications for Influenza, Chickenpox , Hepatitis A ,Hepatitis B,
Diphtheria ,Tetanus, Typhoid, Ebola etc. VikPharm's advanced manufacturing facilities and
adherence to global regulatory standards, ensures the consistent production of high-quality
drugs. VikPharm is recipient of various prestigious awards at national and international levels for
his outstanding work in producing and distributing vaccines on a global scale especially during
the Covid 19 era.
2. JayMed Clinics Inc (hereinafter referred to as “JayMed”) is a Company incorporated in Singa
with the mission of providing accessible and high-quality healthcare services globally. The
organisation started with a few clinics and has since expanded its network to include hundreds
of clinics and hospitals across multiple countries. JayMed has been at the forefront of efforts to
rebuild and strengthen healthcare systems in the post-COVID-19 era. The organisation has
implemented robust measures to enhance supply chain resilience, innovation of healthcare
infrastructure, and ensure the availability of essential medications and of their services. There
has been an emphasis on developing adaptive strategies to address future healthcare
challenges and improve overall healthcare delivery. It was further engaged in collaborations with
international partners to improve global health security and response capabilities.
3. Representatives from JayMed. and VikPharm met at the annual Global Pharma Conference
held in Singla on 2nd February 2023. The conference brought together key stakeholders from
the pharmaceutical and healthcare industries to discuss the latest advancements, challenges,
and opportunities in the field. During a panel discussion on the future of healthcare delivery,
executives from both companies recognized shared interests and complementary strengths.
VikPharm showcased its efficacy whereas, JayMed expressed its need for a reliable supply of
essential medications to enhance its healthcare services and meet the growing demands of its
patient population.
4. VikPharm aimed to expand its market reach and establish a steady distribution network of its
drugs and recognized the strategic advantage of partnering with a reputable healthcare provider
like JayMed to achieve its goals. The leadership at JayMed also identified VikPharm as a
strategic partner capable of meeting their supply chain needs while maintaining high standards
of quality and compliance.
5. Both companies agreed to enter into a supply chain agreement with parties recognizing the
potential for a mutually beneficial partnership. VikPharm was looking to expand its market reach
and ensure steady distribution of its flagship products in multiple countries. JayMed sought to
secure a reliable supply of essential medications to enhance its healthcare services and meet
the growing demands of its customers. A Supply Chain Agreement (hereinafter referred to as
the “Agreement”) was formally signed on 5th March 2023 at Indovia, which was attended by
senior executives from both companies, signalling a commitment to collaboration. Key
stakeholders from both organisations, including legal, regulatory, and supply chain experts,
contributed to drafting the comprehensive Agreement (Extracts of the Agreement provided in
Annexure).
6. As per the Agreement VikPhar committed to supplying drugs on a regular basis, adhering to
the delivery schedule. Shipments were to be made on a monthly basis to ensure a continuous
supply.
7. VikPharm was committed to supplying its drugs on a regular basis, adhering to a delivery
schedule of monthly shipments. During the first year of the agreement, both VikPharm and
JayMed experienced a period of smooth operations. The delivery schedule was meticulously
followed, ensuring that JayMed received the medication on time, which allowed for
uninterrupted patient care. VikPharm consistently met the agreed delivery schedules, shipping
high-quality batches on time. The medications were well-received by patients and healthcare
providers, leading to positive health outcomes and reinforcing the partnership’s success.
JayMed provided positive feedback on the timely deliveries and the efficacy of drugs which
enhanced JayMed’s reputation as a reliable supplier. Regular communication and reporting
ensured transparency, and any minor issues were promptly addressed through mutual
cooperation. Soon JayMed came to completely rely on VikPharm to provide the medications and
drugs and procured the drugs exclusively from VikPharm.
8. Before the expiry of a year of the Agreement, VikPharm began facing logistical challenges
that impacted their ability to adhere to the delivery schedule. The global demand for shipping
services surged, leading to a shortage of available transport vessels and increased competition
for shipping slots. VikPharm faced difficulties in securing timely shipments for its drugs resulting
in delays. Further, major ports experienced significant congestion due to increased cargo
volumes and operational inefficiencies. The congestion led to prolonged waiting times for
vessels to dock, unload, and reload, causing further delays in the supply chain.
9. AiKamm is an NGO which is well known for posting videos on allegations of fraud and bribery
in Indovia and is known for conducting awareness lectures across different Universities.
Meanwhile, AiKamm on 2nd Jan 2024 made serious allegations of fraud against VikPharm
related to the production and distribution of its drugs. It was alleged that VikPharm tampered
with the results of quality control tests to falsely indicate that its drugs met the required
standards. It was further alleged that VikPharm falsified documents to regulatory bodies to
obtain necessary approvals. The investigations by regulatory authorities on the said allegations
further delayed the supplies of VikPharm to JayMed.
10. This led to supply chain disruptions and the delays started to affect the regularity of
shipments to JayMed. Some shipments were delayed by several weeks, causing JayMed to
scramble for alternative sources and manage patient expectations. The frequency and duration
of the delays exceeded the reasonable time anticipated by JayMed, leading to operational
disruptions.
11. VikPharm took all reasonable steps to mitigate the impact of the delays on the supply chain
and ensure that the disruptions were minimised. VikPharm promptly communicated with JayMed
regarding the potential delays as soon as the issues were identified. Regular updates were
provided on the status of shipments and the measures being taken to address the logistical
challenges. VikPharm further explored alternative transportation routes and suppliers to
expedite shipments and reduce delays. Additional resources were allocated to expedite
production and ensure that quality standards were maintained despite the disruptions.
12. However, delayed shipments resulted in critical shortages of drugs disrupting patient care
and leading to negative health outcomes. Healthcare providers at JayMed had to ration the
medication and prioritise patients based on the severity of their conditions of certain illnesses.
The delays eroded the trust of patients and healthcare providers in JayMed’s ability to provide
essential medications reliably and thereby, putting additional pressure on the organisation’s
resources.
13. There were a string of emails sent by JayMed to VikPharm in respect to the ongoing issues.
An email dated 2nd May 2024 was sent by JayMed to VikPharm alleging that VikPharm’s failure
to adhere to the delivery schedule caused critical shortages of drugs disrupting patient care and
leading to negative health outcomes. The delays and allegations of fraud on VikPharm have
eroded the trust of patients and healthcare providers in JayMed’s ability to provide essential
medications and especially the drugs of VikPharm.
14. VikPharm replied by way of Email dated 3rd May 2024 and stated that the delays in the
supply chain were caused by unforeseen logistical challenges. VikPharm took all reasonable
steps to mitigate the impact of the delays, communicated promptly with JayMed and negotiated
adjusted delivery timelines in compliance with the flexibility clause. VikPharm remains
committed to fulfilling its contractual obligations and ensuring the continuous supply of drugs
with significant investments made to enhance supply chain resilience and prevent future
disruptions. It was further contended that all allegations of fraud on VikPharm by AiKamm were
all false and necessary steps were also taken to challenge and sue the allegations.
15. Since the delays further continued, JayMed issued a Notice of Termination by way of Legal
Notice dated 5th June 2024 stating that due to the delayed shipments of drugs, JayMed had to
source alternative medications to ensure continuous patient care. The alternatives were often
more expensive, leading to significantly higher healthcare costs. The additional expenditure
strained the organisation’s budget, impacting other critical areas of operations and patient
services. JayMed further faced penalties and fines for failing to meet regulatory requirements
and contractual obligations with patients and insurance providers. These financial penalties
added to the overall financial burden on the organisation. Also, the need to manage and
mitigate the impact of the delays required additional resources, including overtime pay for staff,
expedited shipping costs for alternative medications, and increased administrative costs for
managing recalls and patient communication. It further alleged that the delayed allegations of
fraud on VikPharm have resulted in loss of trust and reliability. The organisation faced criticism
and complaints from patients who experienced interruptions in their treatment.
16. VikPharm replied by way of a Legal Notice dated 15th June 2024, stating that the logistical
challenges, such as transportation disruptions and supplier shortages, qualify as force majeure
events under the Agreement. These were unforeseeable and beyond the company’s control.
Also the increased global demand for shipping and significant port congestion caused delays in
securing timely shipments for the drugs. It was further alleged that best efforts were taken to
fulfil its contractual obligations and ensure the continuous supply of drugs to JayMed. Vikpharm
contended that significant investments were made to enhance supply chain resilience, including
diversifying suppliers, expanding production capacity, and improving logistical capabilities. It
was further contended that the company has taken all reasonable steps to mitigate the impact of
the delays, communicated promptly with JayMed Clinics Inc., and implemented multiple
strategies to resolve the issues. The allegations of fraud were again rebutted and it was stated
that final stages of investigation were under process.
17. JayMed on 12th September 2024, submitted a Notice of Arbitration along with its Statement
of Claim to the Administrator of the International Centre for Dispute Resolution. The following
reliefs were sought by JayMed: USD 30 million towards cost of alternative medications sourced
to ensure continuous patient care due to delay in supply of drugs by VikPharm. USD 10 million
towards penalties and fines as paid by JayMed for failing to meet regulatory requirements and
contractual obligations with patients and insurance providers due to supply chain disruptions.
USD 15 million towards loss of reputation owing to delay and allegations of fraud. Arbitration
and Legal costs to be awarded. VikPharm filed a short Reply on 22nd September 2024 claiming
for dismissal of all reliefs and requested further time for filing Statement of Defence.
Three Arbitrators were appointed by the Administrator as per the Rules :
● [Link] White (Co-Arbitrator)
● [Link] Kashyap (Co-Arbitrator)
● [Link] Wei (Presiding Arbitrator)
All Arbitrators disclosed that there are no circumstances that may give rise to justifiable doubts
as to the arbitrator’s impartiality or independence.
19. VikPharm filed its Statement of Defence on 30th October 2024. Along with the Statement of
Defence, an application challenging the appointment of [Link] Kashyap was filed by VikPharm
stating that [Link] Kashyap had given four guest lectures conducted by AiKamm between 2017
and 2018 in different universities and hence this may cause prejudice against VikPharm. Hence
a relief was sought for removal and substitution of Mr. Sai Kashyap from the Tribunal.
In addition the following reliefs were sought by VikPharm in Statement of Defence:
The Tribunal lacks jurisdiction since the dispute consists of underlying issues of fraud. The
Claim is to be dismissed. Arbitration and Legal Costs to be awarded.
20. [Link] Kashyap sent an email dated 3rd November 2024 to Arbitrators and Parties, while
agreeing to give those guest lectures, he stated that questions as to his impartiality and
independence can be decided in further proceedings.
21. A conference call was held between the party representatives and arbitrators. Due to
conflicting calendars, the oral hearing is scheduled to be held on 15th and 16th of February
2025 at Deltown.
22. The Tribunal issued a Procedural Order as follows:
PROCEDURAL ORDER
i. The parties have chosen not to let in oral evidence.
ii. The matter has been posted for arguments of both parties on 15th and 16th February 2024
and the Tribunal shall hear the application to challenge the appointment of an Arbitrator as
Preliminary Issue along with the issues raised in the Statement of Claim and Statement of
Defence on the same day.
iii. The Arbitral Tribunal shall hear the following issues:
● Is the challenge of appointment of [Link] Kashyap valid?
● Does the present Arbitral Tribunal have jurisdiction to hear the dispute on allegations of
fraud? Is JayMed entitled to the relief of USD 30 million towards cost of alternative
medications sourced to ensure continuous patient care due to delay in supply of drugs
by VikPharm.
● Is JayMed entitled to the relief of USD 10 million towards penalties and fines as paid by
JayMed for failing to meet regulatory requirements and contractual obligations with
patients and insurance providers due to supply chain disruptions?
● Is JayMed entitled to the relief of USD 15 million towards loss of reputation owing to
delay and allegations of fraud?
iv. Laws of Indovia are pari materia to the laws of India
. v. Laws of Singa are pari materia to the laws of Singapore.
ANNEXURE -
SUPPLY CHAIN AGREEMENT CLAUSES
● Delivery Schedule: VikPharm. is obligated to supply drugs on a regular basis, adhering
to a delivery schedule of monthly/quarterly shipments. The agreement allows for
flexibility in the delivery schedule to accommodate unforeseen circumstances, provided
that timely communication and mutual consent are achieved.
● Quality Control: VikPharm. must ensure that all batches of drugs meet the agreed-upon
quality standards and regulatory requirements specific to each jurisdiction where JayMed
operates. Quality Assurance Processes: The agreement outlines detailed procedures
for quality control testing, including initial production checks, ongoing monitoring, and
final product verification. Contract Performance:
● Timely Delivery: Both parties are obligated to comply with the delivery schedules to
avoid any disruptions in the supply chain. Delays or non-performance without valid
reasons may result in penalties and damages.
● Financial Obligations: The agreement specifies the pricing structure, payment
schedules, and financial responsibilities of both parties. VikPharm will invoice JayMed.
upon delivery, with payment terms agreed upon in advance. Governing Law and Dispute
Resolution: The Agreement shall be governed by Laws of Indovia. Any controversy or
claim arising out of or relating to this Agreement, or the breach thereof, shall be
determined by arbitration administered by the International Centre for Dispute Resolution
in accordance with its International Arbitration Rules. Any challenges of jurisdiction,
maintainability and appointment shall also be dealt by the Arbitrators. The number of
arbitrators shall be Three. The place of arbitration shall be Deltown, Indovia.
● Communication and Reporting:
● Regular Updates: Both parties agree to maintain open lines of communication, with
regular updates on production, shipment status, and any potential issues that could
affect the supply chain.
● Reporting Requirements: VikPharm is required to provide detailed reports on production,
quality control, and delivery timelines. JayMed will share feedback on product
performance and any patient-related issues.
Penalties for Non-Compliance:
● Delay Penalties: If VikPharm Ltd. fails to adhere to the delivery schedule without valid
reasons, penalties will be imposed based on the duration and impact of the delay. The
parties have the right to claim damages and indemnification resulting out of any breach.
● Quality Control Breaches: Penalties may also be imposed for any breaches in quality
control standards that result in recalls, additional testing, or harm to patients.
● Termination Clause: Breach of Contract: Either party may terminate the agreement if the
other party fails to comply with the terms of the contract and does not remedy the breach
within a specified period of 3 months
● Mutual Termination: The agreement may be terminated by mutual consent, with adequate
notice provided by both parties.
● Confidentiality: Information Sharing: Both parties agree to maintain the confidentiality of
all proprietary and sensitive information shared during the course of the agreement.
Non-Disclosure Agreement (NDA): A non-disclosure agreement is included to protect
intellectual property, trade secrets, and other confidential information.
● Force Majeure: Unforeseeable Events: The agreement includes a force majeure clause to
address unforeseen events beyond the control of either party, such as natural disasters,
political instability, or significant disruptions to the global supply chain.
● Mitigation Efforts: Both parties are expected to take reasonable steps to mitigate the
impact of such events on the supply chain and resume normal operations as soon as
possible.
DISCLAIMER
All the characters and events depicted are fictitious. Any resemblance to a person living or dead
is purely coincidental. This proposition is a work of fiction and any resemblance to any person
living or dead is purely coincidental.
