Philip Morris International

Talking Disputes | Philip Morris v. Uruguay

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• published: 27 Oct 2016
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This special edition of Talking Disputes series discusses the recent arbitral award in the investor-state dispute Philip Morris v. Uruguay (ICSID Case No. ARB/10/7). We welcome your feedback: https://www.surveymonkey.com/r/GMSZMXH This case was filed by Swiss and Uruguayan subsidiaries of the tobacco giant Philip Morris International (jointly referred to as “Philip Morris” or the “Claimants”) in 2010, on the basis of the 1988 bilateral investment treaty (BIT) between Switzerland and Uruguay and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention). In this dispute, Philip Morris took issue with Uruguay’s tobacco control measures including a single presentation requirement that allows only one variant of cigarettes per brand family and also the requirement of increasing the size of graphic health warnings from 50% to 80% appearing on cigarette packages. In its July 2016 award, the tribunal held that a trademark holder does not enjoy an absolute right of use, free of regulation, and that the use of trademark in commerce is subject to the state’s regulatory power. The tribunal ultimately found that the measures were a valid exercise by Uruguay of its police powers for the protection of public health, and cannot constitute an expropriation of Philip Morris’ investment. The arbitrators also found no violation of the “fair and equitable treatment” requirement under the BIT. The tribunal considered among other issues that the World Health Organization’s Framework Convention on Tobacco Control (FCTC) is a point of reference on the basis of which one could determine the reasonableness of the measures. The tribunal also dismissed Philip Morris’ other claims and ordered the Claimants to pay Uruguay $7 million as reimbursement of legal expenses. For more information: http://www.ictsd.org/themes/trade-law/events/talking-disputes-philip-morris-v-uruguay