Australia wins court challenge to tobacco plain packaging

[December 18, 2015]  By Matt Siegel

SYDNEY (Reuters) - A Singapore-based court has refused a challenge by Philip Morris to Australia's landmark plain packaging legislation passed in 2011, which the tobacco giant had brought under a bi-lateral trade treaty with Hong Kong, the company said.

The Permanent Court of Arbitration declined on jurisdictional grounds to allow the case to proceed, effectively ending the challenge through this venue, which was based on claims that Australia was violating intellectual property laws.

The decision by the court not to hear the case is likely to be seen as a major victory for Australia, which is facing challenges in other forums such as the World Trade Organisation (WTO), and for other countries considering similar laws.

Australia was the first country in the world to force manufacturers to strip all branding from cigarette packets, most of which are now sold over the counter from blank fronted cabinets, although other countries have followed its lead.

The court said on its website that it would make its decision public once any potentially confidential material within it had been redacted.

Australian Minister for Rural Health Fiona Nash, who is responsible for government tobacco policy, welcomed the decision.

"Plain packaging is a legitimate public health measure which is consistent with Australia’s international legal obligations," she said in a statement.

Philip Morris blasted the ruling, saying that Australia had exploited procedural issues to avoid an open discussion about the effectiveness of plain packaging in curbing tobacco consumption.

"There is nothing in today's ruling that addresses, let alone validates, plain packaging in Australia or anywhere else," Marc Firestone, Philip Morris International Senior Vice President, said in a press release.

"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."

The World Trade Organisation (WTO) is currently considering a separate challenge to Australia's legislation by four member states, and a flurry of challenges by tobacco companies are ongoing as more countries follow Australia's lead.

The court's decision would not have any bearing on the WTO case or any of the other legal challenges currently underway.

Companies including Philip Morris, British American Tobacco BATS.L, Japan Tobacco International 2914.T and Imperial Tobacco Group IMT.L took the British government to court earlier this month to challenge its plain packaging laws, which take effect next May.

The case will be heard in a six-day hearing at London's Royal Courts of Justice.

(Reporting by Matt Siegel; Editing by Michael Perry)

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