Summary

Reproduced from www.worldbank.org/icsid with permission of ICSID.

Case Report by Marina Kofman, editor Ignacio Torterola

Summary

The dispute arose out of certain measures enacted by Uruguay to introduce graphic health warnings on tobacco products, as well as the requirement for a "single presentation" or branding of tobacco products, rather than distinguishing them into different types of products such as "light" cigarettes. Claimants alleged these measures infringed upon their intellectual property rights and caused a substantial reduction in the value of Abal as a company. The measured were alleged to be in breach of Uruguay's obligations under the Agreement between the Swiss Confederation and the Oriental Republic of Uruguay on Reciprocal Promotion and Protection for Investments dated 7 October 1988 (BIT).

Uruguay raised three objections to the Tribunal's jurisdiction to hear the dispute: firstly that Claimants had not satisfied the jurisdictional requirements under the BIT; secondly that public health measures are excluded from the scope of protections afforded to investors; and thirdly that Claimants' activities in Uruguay were not an "investment" under Article 25 of the ICSID Convention. Claimants also brought a denial of justice claim pursuant to Article 46 of the ICSID Convention and sought to clarify the Tribunal's jurisdiction to adjudicate same.

Main issues

jurisdictional requirements - temporal issues in complying with jurisdictional preconditions - principle of consent as a limit on jurisdiction - exclusion of measures from scope of BIT - meaning of "investment" under Article 25 of ICSID Convention - Salini test - Article 46 of ICSID Convention - "futility"

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) - Decision on Jurisdiction - 2 July 2013

Case report provided by International Arbitration Case Law (IACL)