The International Law Gaze: The Plain Victory of Tobacco Plain Packaging Legislation in Philip Morris Asia v Australia

Abstract

The legal regime on the protection of foreign investment through international investment agreements passed a very important test recently with the award rendered by an arbitration tribunal (the tribunal) adjudicating the dispute between Philip Morris Asia and Australia (Philip Morris Asia v Australia, Award on Jurisdiction and Admissibility, 17 December 2015. https://www.pcacases.com/web/view/5). The origin of the controversy was the adoption of tobacco plain packaging legislation by the latter in 2011, which Philip Morris regarded as a violation of the standards of protection provided for in the Agreement between the Government of Hong Kong and the Government of Australia for the Promotion and Protection of Investment, signed on September 15, 1993 (the BIT). According to Philip Morris, the legislation barred the use of intellectual property on tobacco products and packaging and had, therefore, substantially reduced the value of Philip Morris’s investment in Australia. Fearing that Australia’s example would start being followed by other nations, Philip Morris did not hesitate in requesting far-reaching relief orders from the tribunal: suspension of the plain packaging legislation and compensation that could be of the order of billions of Australian dollars. (PMA v Australia, para. 8). The tribunal concluded that Philip Morris had carried out an abuse of process, that its claims were inadmissible and, consequently, that the tribunal was precluded from exercising jurisdiction to settle the dispute. (PMA v Australia, para. 588).