Australia won its international legal battle against Philip Morris' long-running attempt to challenge its plain packaging laws. This means that Australia's plain packaging on tobacco products that was introduced in 2011 by Julia Gillard's Labor government, will remain in place.
The decision should also give other countries a greater reason to follow Australia's lead in requiring plain, uniform designs with prominent graphic health warnings and in effect banning distinctive tobacco company logos and designs on cigarette packs.
In 2011, Philip Morris Asia Limited challenged the Australian government position with the argument that the ban on trademarks breached foreign investment provisions of Australia's 1993 Investment Promotion and Protection Agreement with Hong Kong. The legal mechanism that the tobacco company used is called the Investor-State Dispute Settlement (ISDS) reports The Sidney Morning Herald. It was the first investor-state dispute brought against Australia.
However, Australia argued that the claims under the Hong Kong agreement should not be valid because at the time Philip Morris Asia acquired its shares of Philip Morris Australia in early 2011, it fully aware of the Australian government's 2010 decision to introduce plain packaging according to Union Oracle.
The arbitration tribunal that is based in Singapore unanimously agreed with Australia's position that it has no jurisdiction to hear Philip Morris' claim. The decision was slammed by Philip Morris which said that the decision does not validate plain packaging in Australia or elsewhere.
"It is regrettable that the outcome hinged entirely on a procedural issue that Australia chose to advocate instead of confronting head on the merits of whether plain packaging is legal or even works," said Marc Firestone, Philip Morris international senior vice president, in a statement.
Meanwhile, Fiona Nash, the minister responsible for Australian tobacco policy, welcomed the unanimous decision by the tribunal in favor of their position. The Guardian reports that the Public Health Association of Australia through its chief executive Michael Moore also hailed the decision and called it as "the best Christmas present for public health nationally and internationally".
Moore further stated that with the tobacco companies lost another crucial legal bid to stop another life-saving measure and the message is clear that plain packaging works and is here to stay.
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