Tobacco firm loses lawsuit over Uruguay’s anti-smoking measures

Disputes body rules against Philip Morris which was seeking $22m economic damages

Tobacco firm Philip Morris has been unsuccessful in a law suit taken against Uruguay over the country’s anti-smoking measures. Photograph: Fabrizio Bensch/Reuters.

Tobacco firm Philip Morris has been unsuccessful in a law suit taken against Uruguay over the country’s anti-smoking measures. Photograph: Fabrizio Bensch/Reuters.

 

Tobacco firm Philip Morris has been unsuccessful in a law suit taken against Uruguay over the country’s anti-smoking measures.

The World Bank’s International Centre for Settlement of Investment Disputes (ICSID) ruled in favor of Uruguay on Friday in the case in which the firm was seeking compensation for economic damages.

Uruguay imposed a ban on smoking in public spaces in 2006, as it raised taxes on tobacco products and forced producers to include large warnings and graphic images including diseased lungs and rotting teeth on cigarette packages.

It also banned the use of the words “light” and “mild” from cigarette packs to try to dispel smokers’ misguided beliefs that the products are safer.

“The health measures we implemented for controlling tobacco usage and for protecting the health of our people have been expressly recognised as legitimate and also adopted as part of the sovereign power of our republic,” Uruguayan president Tabare Vazquez said in a televised speech.

Mr Vazquez, an oncologist, helped spearhead the measures during his first term in office from 2005 to 2010.

Damages

In a lengthy decision published on Friday, the ICSID said it had ruled to dismiss Philip Morris’ demand that the regulations be withdrawn, or not applied to the company, or that it be paid $22 million in damages instead.

It ordered the tobacco company to pay Uruguay $7 million and to cover “all the fees and expenses of the Tribunal and ICSID’s administrative fees and expenses.”

Phillip Morris said it respected the tribunal’s decision.

“We’ve never questioned Uruguay’s authority to protect public health, and this case wasn’t about broad issues of tobacco policy,” Marc Firestone, Philip Morris International senior vice president and general counsel, said in a statement. “The arbitration concerned an important, but unusual, set of facts that called for clarification under international law.”

The tobacco company said it would like to meet Uruguay’s government, to explore regulatory frameworks that would enable smokers “in the country to have informed access to reduced-risk alternatives to smoking.”

‘Crocodile tears’

Action on Smoking and Health (ASH), the oldest anti-tobacco organisation in the United States, applauded Uruguay for winning the case, but said Phillip Morris “accomplished its primary goal.”

Phillip Morris “will no doubt shed some public crocodile tears, but their main goal in launching the suit has been realised, six years and millions of dollars have been spent defending a nondiscriminatory law that was intended purely to protect public health,” said Laurent Huber, executive director for ASH.

“This has already resulted in regulatory chill in other countries, preventing tobacco legislation that would have saved lives.”

Tobacco firm JTI Ireland Ltd previous sought High Court orders preventing the Minister for Health, Ireland and the Attorney General commencing the provisions of plain packaging legislation in Ireland. It said the rules would distort and impair the dynamics of competition in the tobacco market

Fine Gael deputy leader James Reilly, who introduced the anti-smoking measures during his term as minister for health, said the outcome of the case was a “huge boost for the health and well-being of its people and people across the world”.

He said big tobacco companies had tried to use litigation to prevent small nations from brnging in health measures to “protect their citizens” from smoking.

Reuters