Attacking Tobacco: Philip Morris International v. Uruguay

Abstract

For the last two decades tobacco companies have been using their seemingly infinite resources to maintain markets in poorer countries that have tried to decrease the number of smokers in their nations. In other words it can best be described as “intimidation litigation.” In the interest of public health, Uruguay passed two plain packaging laws that aimed to curb deceptive advertising and make their consumers aware of the significant health consequences of consuming tobacco products. After losing in the two highest Uruguayan courts, Philip Morris challenged the laws in an international tribunal (ICSID) as a breach of the bi-lateral agreement’s fair and equitable treatment clause. Under the guise of public health, Uruguay persuaded the Tribunal to rule in favor of Uruguay’s police powers to regulate public health. This article breaks down how the Tribunal departed from precedent concerning domestic actions that result in an alien’s investment to be expropriated. It deeply explores the risks of allowing a country to pass laws without regard to their foreign investments. This issue was compounded by the fact that the Uruguayan court system has two “supreme courts” that ruled differently on a key fact in the dispute. In response, the international Tribunal nonchalantly equated “justice” as an opportunity to “have their day in court.” This is a shaky and controversial standard at best considering the varying judicial systems throughout the world. Nonetheless, the article concludes by explaining that despite the risks and slipshod logic employed by the Tribunal, the decision in favor of Uruguay makes sense. Tobacco companies have been bullying and suing their way into keeping tobacco products in schools, in stores, and a significant part of peoples lives around the world.