Australia wins tobacco case against giant Phillip Morris over plain packaging

Australia's government has won its case against tobacco giant Phillip Morris, fighting off an investor-state dispute challenge to its controversial tobacco plain packaging laws.

Phillip Morris Asia Limited launched its challenge against the Australian government in 2011, seeking to rely on an argument that the ban on trademarks breached foreign investment provisions of Australia's 1993 Investment Promotion and Protection Agreement with China's Hong Kong.

The Permanent Court of Arbitration, a Singapore-based court, on Thursday agreed with Australia's position that the court has no jurisdiction to hear Phillip Morris'claim.

The decision could give other countries greater confidence to follow Australia's lead in outlawing tobacco company logos on cigarette packets and moving to drab, uniform designs dominated by graphic health warnings.

Australia was the first country in the world to force tobacco manufacturers to strip all branding from cigarettes, instead replacing it with olive green packets to be sold over the counter from blank fronted cabinets.

"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 statement.

"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," Firestone said.

The decision, widely seen as a victory for Australia, was welcomed by the country's Rural Health Minister Fiona Nash, who is responsible for government policy towards tobacco.

"Plain packaging is a legitimate public health measure which is consistent with Australia's international legal obligations," Nash said.

"Smoking does untold harm to Australians, causing deaths from cancer, lung and heart disease, and hurting families," Nash said.

The court said on its website the decision would be published once any potentially confidential material within it had been redacted.

Phillip Morris'suit was the first ever to be brought against Australia using any form of the Investor-State Dispute Settlement mechanism, an instrument of public international law that grants an investor the right to use dispute settlement proceedings against a foreign government.

The tobacco giant used the clause which was included in the 1993 trade treaty with China's Hong Kong to bring its suit against Australia which was subsequently heard in Singapore.