[Ip-health] AUSTRALIA PREVAILS IN ARBITRATION WITH PHILIP MORRIS OVER TOBACCO PLAIN PACKAGING DISPUTE

Ramya Sheshadri ramyasheshadri8 at gmail.com
Fri Dec 18 21:24:30 PST 2015


*http://www.iareporter.com/articles/breaking-australia-prevails-in-arbitration-with-philip-morris-over-tobacco-plain-packaging-dispute/
<http://www.iareporter.com/articles/breaking-australia-prevails-in-arbitration-with-philip-morris-over-tobacco-plain-packaging-dispute/>
*


*Dec 17, 2015 |* *By Jarrod Hepburn And Luke Eric Peterson*

A tribunal at the Permanent Court of Arbitration has issued a decision
dismissing a high-profile case between cigarette multinational Philip
Morris and the Commonwealth of Australia.

The PCA website indicates that a Decision on Jurisdiction and Admissibility
was issued on December 17, 2015. A source involved in the case has
confirmed to *IAReporter* that the tribunal has dismissed the investor’s
claims of breach of the Australia-Hong Kong bilateral investment treaty.

Subsequent to this, Philip Morris issued a press release confirming the
result, and lamenting that the case was decided on the basis of “… a
procedural issue that Australia chose to advocate instead of confronting
head on the merits of whether plain packaging is legal or even works”.

*Hearings occurred in February 2015; detailed legal arguments have remained
confidential*

The tribunal of Gabrielle Kaufmann-Kohler, Don McRae and Karl-Heinz
Boeckstiegel had earlier determined in April 2014 that the proceedings
would be bifurcated into a preliminary phase and, if necessary, a later
merits phase. Hearings on Australia’s jurisdictional and admissibility
objections were held in February 2015.

As we previously discussed (see here
<http://www.iareporter.com/articles/philip-morris-v-australia-new-ruling-explains-why-jurisdictional-questions-to-be-reviewed-first-umbrella-clause-is-no-longer-being-used-to-import-wto-law/>),
Australia had filed the objections on several grounds, including a
complaint that the claim represented an abuse of process due to corporate
restructuring engaged in by Philip Morris, as well as a complaint that
Philip Morris’ investment in Australia was not admitted in accordance with
Australian law, and a complaint that the dispute between the investor and
the state was already on foot when Philip Morris acquired its investment in
Australia in February 2011.

The tribunal’s detailed reasoning for rejecting jurisdiction is not yet
known. The award will not become public until the parties agree on the
redaction of any confidential information contained in the award.

Although the broad contours of Australia’s jurisdiction and admissibility
objections could be gleaned from an earlier “response” to Philip Morris’s
request for arbitration (which we analyzed here
<http://www.iareporter.com/articles/analysis-australian-defense-strategy-puts-spotlight-on-timing-of-philip-morriss-corporate-structuring-moves-claims-abuse-of-investment-treaty/>),
the more detailed subsequent legal arguments filed in the case have
remained confidential.

As we’ve reported
<http://www.iareporter.com/articles/latest-developments-in-the-philip-morris-arbitrations-against-australia-and-uruguay/>,
Australia’s Attorney General’s office denied a request by *Investment
Arbitration Reporter* under the country’s freedom of information law for
access to a detailed defence pleading filed on jurisdiction and merits last
year. IAReporter then requested an internal review of that decision, but
that review failed to overturn the agency’s earlier rejection of our
request.

The claimant has also declined to release its own briefs in the case.

It remains possible that the detailed briefs could be published now that
the case has concluded.

Notwithstanding dismissal of the BIT claim, a separate claim against
Australia at the World Trade Organisation remains pending, with a decision
expected ‘not before the first half of 2016’, according to the WTO’s
website.*Dec 17, 2015 |* *By Jarrod Hepburn And Luke Eric Peterson*

·

A tribunal at the Permanent Court of Arbitration has issued a decision
dismissing a high-profile case between cigarette multinational Philip
Morris and the Commonwealth of Australia.

The PCA website indicates that a Decision on Jurisdiction and Admissibility
was issued on December 17, 2015. A source involved in the case has
confirmed to *IAReporter* that the tribunal has dismissed the investor’s
claims of breach of the Australia-Hong Kong bilateral investment treaty.

Subsequent to this, Philip Morris issued a press release confirming the
result, and lamenting that the case was decided on the basis of “… a
procedural issue that Australia chose to advocate instead of confronting
head on the merits of whether plain packaging is legal or even works”.

*Hearings occurred in February 2015; detailed legal arguments have remained
confidential*

The tribunal of Gabrielle Kaufmann-Kohler, Don McRae and Karl-Heinz
Boeckstiegel had earlier determined in April 2014 that the proceedings
would be bifurcated into a preliminary phase and, if necessary, a later
merits phase. Hearings on Australia’s jurisdictional and admissibility
objections were held in February 2015.

As we previously discussed (see here
<http://www.iareporter.com/articles/philip-morris-v-australia-new-ruling-explains-why-jurisdictional-questions-to-be-reviewed-first-umbrella-clause-is-no-longer-being-used-to-import-wto-law/>),
Australia had filed the objections on several grounds, including a
complaint that the claim represented an abuse of process due to corporate
restructuring engaged in by Philip Morris, as well as a complaint that
Philip Morris’ investment in Australia was not admitted in accordance with
Australian law, and a complaint that the dispute between the investor and
the state was already on foot when Philip Morris acquired its investment in
Australia in February 2011.

The tribunal’s detailed reasoning for rejecting jurisdiction is not yet
known. The award will not become public until the parties agree on the
redaction of any confidential information contained in the award.

Although the broad contours of Australia’s jurisdiction and admissibility
objections could be gleaned from an earlier “response” to Philip Morris’s
request for arbitration (which we analyzed here
<http://www.iareporter.com/articles/analysis-australian-defense-strategy-puts-spotlight-on-timing-of-philip-morriss-corporate-structuring-moves-claims-abuse-of-investment-treaty/>),
the more detailed subsequent legal arguments filed in the case have
remained confidential.

As we’ve reported
<http://www.iareporter.com/articles/latest-developments-in-the-philip-morris-arbitrations-against-australia-and-uruguay/>,
Australia’s Attorney General’s office denied a request by *Investment
Arbitration Reporter* under the country’s freedom of information law for
access to a detailed defence pleading filed on jurisdiction and merits last
year. IAReporter then requested an internal review of that decision, but
that review failed to overturn the agency’s earlier rejection of our
request.

The claimant has also declined to release its own briefs in the case.

It remains possible that the detailed briefs could be published now that
the case has concluded.

Notwithstanding dismissal of the BIT claim, a separate claim against
Australia at the World Trade Organisation remains pending, with a decision
expected ‘not before the first half of 2016’, according to the WTO’s
website.



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