Arbitration in Life Science Disputes?
The Flourishing Landscape of International Arbitration in Life Sciences
The life sciences sector has seen remarkable growth, propelled by a burgeoning global pharmaceutical market. From a valuation of USD 462 billion in 2003, it surpassed USD 951 billion by 2015. The COVID-19 pandemic further amplified this trajectory, culminating in record-breaking annual investments in biotech companies reaching USD 105 billion in 2021. This influx of capital has organically led to a rise in life sciences disputes, many of which are increasingly settled through international arbitration.
This trend is demonstrably prevalent:
ICC: A 50% increase in life sciences arbitrations by July 2022.
LCIA: Healthcare and pharmaceuticals ranked as the 8th most common industry sector in 2021 caseload.
AAA-ICDR: A 34% increase in healthcare-related and life sciences cases in 2020, following a 40% increase in 2019.
International arbitration is steadily asserting itself as the preferred forum for resolving life sciences disputes. Its appeal lies in its superior efficiency, confidentiality, and ability to navigate the complexities of technical and legal intricacies inherent to the sector.
Leveraging Arbitration for Efficient Resolution of Life Sciences Disputes
The intricate nature of life sciences collaborations, characterised by cross-border joint ventures, confidential intellectual property, and high-stakes research and development, presents unique challenges when disputes arise. Traditional litigation, often cumbersome and public, may not be the most effective solution. International arbitration provides life sciences companies with a more advantageous and efficient avenue for dispute resolution.
Confidentiality at the Forefront: Unlike public court proceedings, arbitration allows parties to maintain the confidentiality of sensitive information, including trade secrets, proprietary know-how, and contractual terms. This is crucial for protecting competitive advantages and fostering trust within complex collaborations.
Expertise at the Helm: Parties in arbitration have the invaluable opportunity to select arbitrators with specialised knowledge in the life sciences industry. This ensures a deeper understanding of the technical complexities and commercial realities at play, leading to more nuanced and informed decisions. Arbitrators with dual Medical Science and Legal qualifications might be a small highly specialised group, but there is little doubt as to their value in high value specialist claims.
Streamlined and Cost-Effective: Compared to the protracted nature of litigation, arbitration offers a faster and more cost-effective path to resolution. Narrower discovery procedures and streamlined evidentiary rules minimise delays and unnecessary burdens on companies. These elements are particularly beneficial for time-sensitive projects and volatile markets. In a financially squeezed market, cost effective proceedings are even more important.
Enforceable Across Borders: Arbitration awards issued under the New York Convention are readily enforceable in over 160 countries, providing life sciences companies with greater certainty and security when dealing with international collaborations. This facilitates swift execution of judgments and promotes cross-border dispute resolution.
Conclusion
The increasing global interconnectedness of the life sciences sector necessitates robust and adaptable dispute resolution mechanisms. By incorporating efficient arbitration clauses into their contracts, life sciences companies can equip themselves to navigate potential disputes with greater confidentiality, expertise, and efficiency, ultimately safeguarding their valuable collaborations and maximizing their competitive edge.
