Date:17Jul 2017
Investment Treaty Arbitration Claims over Tobacco Packaging Regulation: Running out of Puff?
In 2015 an arbitral tribunal unanimously rejected the claim brought by Philip Morris Asia against Australia under its investment treaty with Hong Kong, regarding plain packaging legislation, on the jurisdictional ground that forum-shopping constituted an abuse of right under customary international law.
This lecture examines this outcome from the perspective of four commonly-raised concerns about the investor-state dispute settlement (ISDS) procedure: delays, costs, transparency and “regulatory chill”. It then compares the 2016 award on the merits finding against Philip Morris in a (much smaller) claim under the Uruguay-Switzerland treaty. That tribunal (including Australia’s pre-eminent international lawyer) held that the (less invasive) tobacco advertising regulations did not result in a denial of justice or violation of fair and equitable treatment (by majority), nor indirect expropriation (recognising that bona fide public health measures are an essential manifestation of a state’s “police powers” under customary international law). Finally, the lecture considers some of the implications of this (curiously little-reported) decision for regional treaty practice, including the ongoing (ASEAN+6) Regional Comprehensive Partnership negotiations as well as the exclusion of tobacco control measures from ISDS under the Trans-Pacific Partnership (signed on 4 February 2016) and the Singapore-Australia FTA (as amended on 13 October 2016).
Professor Nottage is Professor of Comparative and Transnational Business Law at the University of Sydney Law School. His interests are in arbitration, consumer law and corporate governance. He focuses on particular on Japan and the Asia-Pacific. He is a Co-Director of the Australian Network for Japanese Law (ANJeL) and an Associate Director of the Centre for Asian and Pacific Law at Sydney University.
