The Award on the merits in Philip Morris v. Uruguay implications for WHO FCTC implementation

Published by: McCabe Centre for Law & Cancer
Date: June 2016

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About the paper

On 8 July 2016 the arbitral tribunal constituted to hear Philip Morris’ (PM) challenge to Uruguay’s tobacco packaging and labelling measures under a 1988 bilateral investment treaty between Switzerland and Uruguay handed down its Award, dismissing all of PM’s claims.

The Award of the Tribunal strongly affirms the right of states to regulate in the public interest, including for public health. It accords significant weight to the WHO Framework Convention on Tobacco Control (WHO FCTC) as a reflection of a state’s duty and right to protect public health, as a source of evidence-based best practices, and as a means of assisting developing states in particular to implement effective tobacco control measures. The Award is part of a growing body of jurisprudence rejecting arguments made by tobacco companies to prevent, delay or weaken implementation of the WHO FCTC, which we collate and analyse on our WHO FCTC Knowledge Hub website.

The PM v Uruguay Award finds that Uruguay’s laws did not ‘expropriate’ PM’s intellectual property or constitute a breach of Uruguay’s obligation to provide PM with fair and equitable treatment under the Switzerland-Uruguay BIT. The tobacco industry routinely argues that tobacco control measures breach such obligations, both in the international investment law context and in analogous international, regional and domestic law contexts. The PM v Uruguay decision rejects these arguments in the international investment law context, and contains much reasoning that will be relevant to other legal challenges both under investment law and in other fora.

We have prepared this paper to help draw out those aspects of the decision that will be most relevant to WHO FCTC implementation in other jurisdictions, as well as those that provide lessons on the relationship between international investment law and public health more generally. In addition to summarising the Award and key points from the dispute’s procedural history, we annotate excerpts from the judgment which we think illustrate important principles for other disputes of this nature, both in the application of substantive investment standards to public health regulations, and in the way in which the tribunal conceived and approached its task.

This paper will focus on the Tribunal’s statements regarding expropriation, fair and equitable treatment, and intellectual property, which have the widest applicability to other investment claims concerning regulatory measures for public health. It will also examine cross-cutting themes of interest for other public health disputes, including the appropriate level of deference to be accorded to sovereign regulatory judgments, the treatment of evidence, the status of the WHO FCTC and its Guidelines for Implementation, the importance of public health as a normative value, and the role of amicus curiae briefs.