Summary

Case Report by Natalia Szlarb, editor Ignacio Torterola

Summary

The dispute arose as a result of the adoption by Uruguay of tobacco-control measures prohibiting different packaging or presentations for cigarettes sold under a given brand and mandating graphic images that purport to illustrate the adverse health effects of smoking. Philip Morris alleged that the Challenged Measures left insufficient room on the packs for it to use its trademarks and branding as they were intended, and consequently, it could not market some of its brands. The Claimants argued that that Uruguay had breached the terms of the BIT because the Challenged Measures amounted to an expropriation of the property rights without compensation, the Challenged Measures were arbitrary violating the FET standard, the Challenged Measures violated the Claimants' legitimate expectations of a stable regulatory environment and that the Uruguayan courts had not dealt properly or fairly with the Claimants' legal challenges. The Tribunal, relying primarily on the wide 'margin of appreciation' and deference provided to sovereign States in adopting measures or decisions concerning public health, decided to dismiss Philip Morris claims in its Award rendered on July 8, 2016.

Main issues

Fair and Equitable Treatment - Denial of Justice - Expropriation - Legitimate Expectations - Legal Stability - Impairment to Use and Enjoyment of Investments - Trademarks as Investments

Philip Morris Brand Sàrl (Switzerland), Philip Morris Products S.A. (Switzerland) and Abal Hermanos S.A. (Uruguay) v. Oriental Republic of Uruguay - ICSID Case No. ARB/10/7 - Award and Concurring and Dissenting Opinion Arbitrator Gary Born - English - 8 July 2016

Case report provided by International Arbitration Case Law (IACL)