Search Results Results 1-10 of 35
Australia - Tobacco Plain Packaging [Australia] [June 28, 2018]
In 2012 and 2013, Honduras, Indonesia, Cuba and Dominican Republic brought complaints in the World Trade Organization (WTO) claiming that Australia's tobacco plain packaging laws breached the WTO agreements. The complaining countries argued that Australia’s law breached the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) by failing to provide required protections to trademarks rights and because it is an unjustifiable encumbrance on the use of tobacco trademarks; and the Agreement on Technical Barriers to Trade (TBT Agreement) because it is more trade-restrictive than necessary to fulfill a legitimate objective.
This long anticipated ruling by the WTO rejected all grounds of complaint against Australia's plain packaging laws in a 900 page ruling. The panel's authoritative ruling should be powerful in persauding governments to move forward with tobacco plain packaging and can be used to resist many of the flawed arguments the tobacco industry puts forward to oppose the policy. The WTO considered extensive evidence from Australia and the complaining countries and found the evidence demonstrates tobacco plain packaging works to reduce tobacco use. The panel re-affirmed that states have the right to regulate for public health under WTO law and the policy does not interfere with international trademark rights. The panel made strong findings of fact which undermine many of the other arguments that the tobacco industry tries to use to oppose plain packaging laws. These are detailed in the briefing document that can be downloaded under the 'additional documents' tag.
Philip Morris SÀRL v. Uruguay [Uruguay] [July 08, 2016]
In February 2010, three subsidiary companies of Philip Morris International (PMI) initiated an investment arbitration claim at the International Centre for the Settlement of Investment Disputes (ICSID), an arbitration panel of the World Bank. PMI alleged that two of Uruguay’s tobacco control laws violated a Bilateral Investment Treaty (BIT) with Switzerland. PMI brought the claim after legal challenges in Uruguay’s domestic courts by the Philip Morris subsidiaries had failed. The panel of three arbitrators published their ruling on July 8, 2016, dismissing all PMI’s claims and awarding Uruguay its legal costs ($7 million).
The two “Challenged Measures” required:
1. Large graphic health warnings covering 80% of the front and back of cigarette packets; and
2. The Single Presentation Requirement (SPR) that limited each cigarette brand to just a single variant or brand type (eliminating brand families to address evidence that some variants can mislead consumers and falsely imply some cigarettes are less harmful than others).
PMI alleged that the 80% health warnings left insufficient room on the packs for it to use its trademarks and branding as they were intended, and the SPR meant it could not market some of its brands such as Marlboro Gold. PMI therefore alleged that Uruguay had breached the terms of the BIT because the Challenged Measures: Expropriated the property rights in PMI’s trademarks without compensation; were arbitrary as they were not supported by evidence to show they would work and so did not accord PMI with Fair and Equitable Treatment; did not meet PMI’s Legitimate Expectations of a stable regulatory environment or to be able to use their brand assets to make a profit; and that the Uruguayan courts had not dealt properly or fairly with PMI’s domestic legal challenges such that there was a Denial of Justice.
Philip Morris sought an order for the repeal of the Challenged Measures and for compensation in the region of $25 million.
The tribunal’s findings
This highly anticipated award addressed a number of fundamental legal issues concerning the balance between investor rights and the space available for states’ to regulate for public health. While there is no doctrine of binding precedent in international arbitration law, the development of an investment treaty case law and jurisprudence means that the wider value of each award can be very significant. This ruling highlighted the importance of the WHO Framework Convention on Tobacco Control (FCTC) in setting tobacco control objectives and establishing the evidence base for measures, and confirmed that states therefore need not recreate local evidence. It addressed the wide ‘margin of appreciation’ and deference provided to sovereign states in adopting measures or decisions concerning public health. The tribunal also identified that a state need not prove a direct causal link between the measure and any observed public health outcomes – rather that it was sufficient that measures are an attempt to address a public health concern and taken in good faith.
The ruling sets an extremely high bar for any foreign investor seeking to bring an investment arbitration challenge against a non-discriminatory public health measure that has a legitimate objective and that has been taken in good faith.
R (on the Application of) Philip Morris Brands SARL et al. v. Secretary of State for Health [European Union] [May 04, 2016]
A challenge to the validity of the European Union’s (EU) Tobacco Products Directive (TPD) 2014 brought by Philip Morris and British American Tobacco was dismissed on all grounds by the Court of Justice of the European Union (CJEU). The amended TPD was adopted in April 2014 and provides a wide range of requirements relating to emissions, reporting, 65% pictorial health warnings, packaging and labeling, a ban on characterising flavors and other additives, and regulates e-cigarettes. Article 24(4) permits member states to adopt further requirements to standardise packaging. The TPD applies to all countries within the EU.
In this case, Philip Morris and BAT brought a judicial review against the United Kingdom based on the government’s intention to implement the TPD requirements in UK legislation. The tobacco companies claimed that parts of the TPD and the Directive as a whole, were invalid because it was incompatible with the EU Treaties; was not proportionate or supported by evidence; was not sufficiently harmonising in nature; and contravened the principle of subsidiarity. The UK court hearing the case referred questions on the interpretation of EU law to the CJEU. The CJEU upheld all aspects of the TPD, including provisions to require pictorial warning labels, to prohibit menthol cigarettes, and to allow countries to prohibit cross-border sales and to adopt additional packaging restrictions, such as plain packaging. The court noted that the EU may act to prevent obstacles to the trade of tobacco products while also ensuring a high level of public health protection. The court found that the packaging and labeling requirements were proportionate and did not go beyond what were necessary and appropriate.
In addition the court highlighted the importance of the FCTC as a tool for interpretation and stated that it could have a 'decisive influence' on the interpretation of both EU law and Member States' tobacco control legislation.
EU Member States are obliged, under the TPD, to implement most provisions of the TPD into domestic law by May 20, 2016 (although a number of states have been late in their implementation).
Philip Morris Asia v Australia [Australia] [December 17, 2015]
Philip Morris Asia challenged Australia's tobacco plain packaging legislation under a 1993 Bilateral Investment Treaty between Australia and Hong Kong. This was the first investor-state dispute brought against Australia.
Philip Morris Asia initiated the arbitration in November 2011, immediately after the legislation was adopted. Australia responded with jurisdictional objections and sought a preliminary ruling on these issues. The tribunal bifurcated the proceedings and on 18 December 2015 issued a unanimous decision agreeing with Australia's position that the tribunal had no jurisdiction to hear the claim.
The main objection to jurisdiction was that at the time the dispute arose, Philip Morris Asia was not a foreign investor in Australia. The government announced its decision to proceed with plain packaging legislation in April 2010. At that time, 100% of the shares in Philip Morris Asia were owned by the parent company located in Switzerland (which had no investment treaty with Australia). Philip Morris International then undertook a restructure in 2011 which meant that Philip Morris Asia, located in Hong Kong, became the sole owner of the shares in the Australian subsidiaries.
The Tribunal found that Claimant’s restructure was for the principal, if not the sole, purpose of gaining protection under the Treaty so as to bring a claim against the plain packaging legislation. As such Philip Morris Asia's claim was an 'abuse of rights'. This concluded the arbitration in Australia's favour, subject to finalisation of the costs claim.
R (on the application of Philip Morris Brands Sàrl) v. Secretary of State for Health [United Kingdom] [November 07, 2014]
This decision related to the challenges by British American Tobacco UK Limited ("BAT"), Philip Morris Brands Sàrl and Philip Morris Limited to the European Union's Revised Tobacco Products Directive (Directive 2014/40/EU)("the Directive"). Each of the companies brought claims by way of judicial review seeking to prevent the transposition of the Directive into the domestic law of the United Kingdom on the basis that the Directive was invalid under European Union law.
The Secretary of State for Health, although contending that the Directive was valid, agreed that it would be appropriate to seek a preliminary ruling from the Court of Justice of the European Union ("CJEU"). It was therefore common ground that the issue of the validity of the Directive should be referred to the CJEU, and in this decision the Court referred the matter according to the terms of reference agreed between the parties.
The Court also ruled on applications by a number of organizations to be joined as parties to the proceedings. In an earlier decision, the Court refused such an application by a Polish tobacco association on the basis that it would not add significant additional input into the reference and that it was not sufficiently proximate to the United Kingdom. However, in this decision, the Court distinguished the circumstances of the applicant organizations and granted them party status.
Australia - Plain Packaging Requirement Applicable to Tobacco Products and Packaging [Australia] [October 27, 2014]
Information about this decision coming soon.
R (on the application of British American Tobacco UK Ltd) v. Secretary of State for Health [United Kingdom] [October 24, 2014]
This decision related to the challenges by British American Tobacco UK Limited ("BAT"), Philip Morris Brands Sàrl and Philip Morris Limited to the European Union's Revised Tobacco Products Directive (Directive 2014/40/EU)("the Directive"). Each of the companies brought claims by way of judicial review seeking to prevent the transposition of the Directive into the domestic law of the United Kingdom on the basis that the Directive was invalid. The Secretary of State for Health, although contending that the Directive was valid, agreed that it would be appropriate for the Administrative Court to seek a preliminary ruling from the Court of Justice of the European Union ("CJEU").
In this decision, the Administrative Court considered an application by a Polish tobacco association - the Polish National Association of Tobacco Growers (Krajowy Zwiazek Plantatorow Tytoniu ("KZPT")) - to intervene in the claim. Despite the support of BAT, the Court refused KZPT's application on the basis that, among other things, it was unlikely that KZPT's intervention would significantly assist in the drafting of the reference to the CJEU.
Note: in a subsequent decision, distinguishing KZPT's circumstances, the Court granted an application by several other parties to intervene in the case.
Sinclair Collis Ltd. v. Lord Advocate for Scotland [United Kingdom] [October 10, 2012]
A tobacco vending machine company challenged the legality of a section of a tobacco control law prohibiting tobacco vending machines. The petitioner argued that the law violates the right to free movement of goods between EU member states and infringes their right to property. In this appellate decision, the court looked to the treaties in addition to European Court of Justice and UK case law to test the proportionality of the Scottish law. Agreeing with the lower court’s finding that the law was necessary and appropriate to the goal of protecting the health and safety of young people, the court upheld the ban on vending machines for tobacco products.
Philip Morris Norway v. Health and Care Services of Norway [Norway] [September 14, 2012]
Philip Morris Norway challenged Norway's ban on the display of tobacco products at retail establishments. A European court, ruling on European law, determined that the domestic Norwegian court must decide whether "the measure is necessary to achieve the stated goal, and that goal cannot be reached using less extensive prohibitions or restrictions or prohibitions or restrictions that affect trade within [Europe] less." The Norway court determined that the display ban is necessary and that no alternative, less intrusive measure could produce a similar result. The court upheld the ban and ordered Philip Morris to pay legal fees.
Indonesia v. United States [United States] [April 04, 2012]
The United States Federal Food, Drug, and Cosmetic Act (“FFDCA”) prohibits the production and sale in the United States of cigarettes with characterizing flavours (such as clove, strawberry, or chocolate), but does not prohibit regular or menthol cigarettes. Indonesia, which exports clove cigarettes to the United States, brought this case before the World Trade Organization. Here, the Appellate Body upheld an earlier Panel's findings that FFDCA is inconsistent with provisions of the Technical Barriers to Trade ("TBT") Agreement. The Appellate Body, however, disagreed with the Panel's interpretation of “like products” and “treatment no less favourable” in the TBT Agreement.
The Appellate Body considered that the determination of whether products are “like” within the meaning of the TBT Agreement is a determination about the competitive relationship between the products. Regulatory concerns underlying a measure, such as the health risks, may be relevant to the determination of “likeness” to the extent they have an impact on the competitive relationship between the products. Based on this interpretation, the Appellate Body agreed with the Panel that clove and menthol cigarettes are “like products.”
In determining whether a measure's detrimental impact on imports constitutes "less favourable" treatment, the Appellate Body found that a panel must carefully scrutinize the particular circumstances of the case, namely the design, operation, and application of the regulation, and, in particular, whether that regulation is even handed. Based on this interpretation, the Appellate Body found that these factors strongly suggests that the FFDCA has a detrimental impact on competitive opportunities for clove cigarettes and reflects discrimination against the group of like products imported from Indonesia.
Finally, the Appellate Body upheld the Panel's finding that the United States acted inconsistently with the TBT Agreement by allowing only three months between publication and entry into force.