What is Indemnity?
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An indemnity is a form of contract.
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Section 124 of the Indian Contract Act,1872 defines a contract of indemnity as the one by which one party promises to save the other from any loss caused to the latter.
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US Vaccine manufacturers are asking indemnity for their vaccines.
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Once the government of India grants indemnity to the vaccine manufacturer, it would mean that even if a particular vaccine might have caused death or any lasting damage to a recipient, any claim of compensation arising from it will have to be met by the government and not by the company.
Why are US pharma firms asking for indemnity clauses?
The US pharma firms are demanding indemnity, because:
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Vaccines were developed at record speed and were approved for emergency use. So, they took a huge risk in response to the pandemic. Hence, there could be potential side effects and the Government’s duty is to protect them.
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Pfizer enjoys indemnity in the US, UK, and most other countries where it is supplying COVID-19 vaccines.
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Indemnity would be used as a legal defence to protect the U.S. firms, which have pointed out that they cannot take responsibility for cold-chain lapses and transportation problems within India.
What is the dilemma for the Indian Government?
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The dilemma for the Indian Government is that if the U.S pharma companies are given indemnities, then all vaccine makers including those from India such as Serum Institute, Bharat Biotech, and Russian Sputnik would also demand the same.