Tobacco Control Measures and International Investment Law After Philip Morris v. Australia and Philip Morris v. Uruguay – Vol. 29 No. 2

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Description: Philip Morris’s litigation against tobacco control measures based on alleged violations of international investment agreements was a great success for host-States.  The tribunals in Philip Morris Asia v. Australia (“PMA v. Australia”) and in Philip Morris Brands Sarl, et al. v. Oriental Republic of Uruguay (“PM v. Uruguay”) sided with the two host-States.  The rulings confirmed or expanded States’ regulatory powers and narrowed the possibility of abusing the investor-State dispute settlement mechanism.  The two awards will influence future disputes related to tobacco control measures on various grounds: inter alia, the abuse of process, indirect expropriation, and normative stability as host-States’ obligation.

The two tribunals were aware that much was at stake for host-States and the legitimacy of international investment law.  The Great Recession and the crises in Asia and Argentina changed the politics and the economics of international investment law by curtailing the deregulation and overconfidence in investors and markets.  As a result, the State has reemerged, and its regulatory powers have been reclaimed to deal with the complexities of protracted economic crises and new health and environmental risks.

Although international investment law was developed to protect foreign investments the aforementioned phenomena tilted the scale in host-States’ favor, as States’ interests have gained prominence. New generations of international investment agreements express this reality; States strive to ensure that their regulatory powers are preserved. The PMA v. Australia and PM v. Uruguay awards coincide with these phenomena.

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*Doctor of Laws, University of Ottawa. LL.M., McGill University. Senior Lecturer, Faculty of Law, University of Waikato, New Zealand. This article is dedicated to Eliana Herrera, Alberto Alvarez Zuluaga, and Concha Jimenez (in memoriam).