Respecting regulatory measures: Arbitral method and reasoning in the Philip Morris v Uruguay tobacco plain packaging case

Published date01 November 2017
AuthorCaroline E. Foster
Date01 November 2017
RECIEL. 2017;26:287–297.    
DOI: 10.1111/reel.12217
Respecting regulatory measures: Arbitral method and reasoning
in the Philip Morris v Uruguay tobacco plain packaging case
Caroline E. Foster
© 2017 John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
Email: The decision in the Philip Morris v Uruguay tobacco plain packaging case is important not
only for its contribution in the health field but also more broadly for international environ-
mental lawyers in light of the methodologies employed by the majority. The Philip Morris
v Uruguay tribunal’s willingness to place weight on international health law, embodying an
openness to international law from beyond the investment field, was crucial to the deci-
sion. Additionally, the tribunal demonstrated a vital preparedness to engage with the sci-
entific or technical question of whether Uruguay’s tobacco measures would actually
potentially be effective in reducing smoking, while accepting the inherent limitations in
the available science. Notions of deference and margin of appreciation, as well as dispro-
portionality or proportionality testing, may have eased the way for the majority decision,
but were less crucial and ought not to be over- emphasized. Indeed, where there is broad
international legal support for host States’ policies, it weakens international public policy
to rest respect for States’ policies simply on a broad notion of deference or ‘margin of
appreciation’. The Philip Morris v Uruguay tribunal was right to turn instead to interna-
tional health law and the technical evidence on countering tobacco- related disease.
Philip Morris’ challenge to Uruguay’s plain packaging scheme for to-
bacco products under the Switzerland–Uruguay bilateral investment
treaty (BIT) was rejected by an International Centre for Settlement of
Investment Disputes (ICSID) tribunal in 2016.1 Central aspects of
the Philip Morris v Uruguay tribunal’s method and reasoning could
lead the way for similar cases arising in investment tribunals or inter-
national dispute settlement in the environmental arena more gener-
ally. As institutional developments in the investment field progress
and ‘investment and environment’ and ‘health and investment’ dis-
putes continue to grow in number, questions about how tribunals go
about deciding such cases require ongoing consideration.2 Most
notably, the Philip Morris v Uruguay tribunal modelled good practice
in drawing on international health law and expertise from the World
Health Organization (WHO) and the Framework Convention on
Tobacco Control (FCTC).3 With the European Union (EU) continuing
to work towards the establishment of an International Investment
Court,4 it may become increasingly important to dovetail investment
law appropriately with international public policy in the environmen-
tal and health fields, as the tribunal did in this case.5
Investment disputes raising health and environmental questions
pose a range of methodological challenges and choices for tribunals.
1Philip Morris Brands Sàrl, Philip Morris Products S.A. and Abal Hermanos S.A. v Oriental Republic
of Uruguay (Award) (8 July 2016) ICSID Case No ARB/10/7.
2See JE Viñuales, Foreign Investment and the Environment in International Law (Cambridge
University Press 2012); V Vadi, Public Health in International Investment Law and Arbitration
(Routledge 2012); M Cordonier Segger, MW Gehring and AP Newcombe, Sustainable
Development in World Investment Law (Kluwer 2010).
3World Health Organization Framework Convention on Tobacco Control (adopted 21 May
2003, entered into force 27 February 2005) 2302 UNTS 166 (WHO FCTC).
4Note the unanimous adoption of a mandate for a working group to assess proposed reforms
and recommend relevant solutions at the 50th session of the United Nations Commission on
International Trade Law (UNCITRAL) in Vienna, 3–21 July 2017. See UNCITRAL ‘Possible
Future Work in the Field of Dispute Settlement: Reforms of Investor–State Dispute
Settlement (ISDS)’ UN Doc A/CN.9/917 (20 April 2017).
5Consider the questions raised in AF Lowenfeld, ‘Public Policy and Private Arbitrators: Who
Elected Us and What are We Supposed to Do?’ (2006) 3(5) Transnational Dispute

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