Chapter 8: Disputes regarding tobacco control measures under investor-state arbitration
That tobacco consumption and exposure to tobacco smoke cause death, disease and disability is well established by scientific evidence. The global tobacco epidemic has become a pressing public health issue. Over the years, various tobacco control measures have been put in place around the world. This can be attributed to the adoption of the WHO Framework Convention on Tobacco Control (WHO FCTC), the most important public health treaty on tobacco. Disputes between tobacco companies and countries implementing active tobacco control measures have increased with the implementation of such measures. Recently, tobacco company Philip Morris initiated investor-state arbitration under bilateral investment treaties (BIT) challenging Uruguay and Australia’s tobacco packaging laws. This action has created concerns regarding potential conflicts between the WHO FCTC and BITs. In 2010, Philip Morris filed claims against Uruguay at the International Centre for Settlement of Investment Disputes (ICSID) under the BIT between Switzerland and Uruguay. In 2011, another Philip Morris entity filed a claim against Australia under a BIT between Hong Kong and Australia and invoked the United Nations Commission on International Trade Law Arbitration Rules (UNCITRAL Arbitration Rules) to govern the arbitration proceedings. In the view of Philip Morris, the tobacco packaging measures at issue unlawfully interfere with its use of trademarks and intellectual property – the central investments protected by the BITs – and therefore constitute a violation of several obligations under the BITs. Philip Morris seeks relief in the form of substantial financial compensation as well as the suspension of the challenged regulations.
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