The Influential Amici in Philip Morris v. Uruguay: A new role for intergovernmental organizations in investment treaty arbitration?

A lot has been written about Philip Morris v. Uruguay, an investment treaty arbitration concerning Uruguayan tobacco packaging and labelling measures that implement the World Health Organization Framework Convention on Tobacco Control (WHO FCTC).

The dispute raised questions about the extent to which states retain the right to regulate in the interests of health, the ability of large multinationals to chill regulation through investment treaty claims and the legitimacy of investment treaty arbitration more broadly. Less attention has been paid to the role of amicus curiae briefs in the outcome of the dispute. This post describes those roles and considers whether it presents a model for future interventions.

The Philip Morris claims concerned two measures. First, Uruguay required an increase in the size of graphic health warnings on cigarettes, from 50 per cent of the principal display areas of the pack to 80 per cent. This step was taken in a context where Article 11 of the WHO FCTC obliges parties, including Uruguay, to implement “effective measures” to ensure that tobacco products carry health warnings describing the harmful effects of tobacco use. Article 11 states that warnings should be 50 per cent or more of the principal display areas of the pack, but no less than 30 per cent. Guidelines for implementation of Article 11 are intended to assist parties in meeting their obligations. These guidelines state: “given the evidence that the effectiveness of health warnings and messages increases with their size, Parties should consider using health warnings and messages that cover more than 50% of the principal display areas and aim to cover as much of the principal display areas as possible.”

Second, Uruguay prohibited the sale of more than one variant of any tobacco brand. This measure, which became known as the single-presentation requirement, was intended to prohibit misleading tobacco packaging. In this respect, Article 11 of the WHO FCTC obliges parties to prohibit false, misleading or deceptive terms on tobacco packaging. After Uruguay and other countries banned misleading terms, such as light and ultra-light, Philip Morris rebranded affected variants rather than withdraw them from the market. The company also instructed retailers on which new variant corresponded to the prior misleading brand, thereby establishing an association between new variants and the banned misleading terms.

Philip Morris made a number of claims, including that the two measures constituted indirect expropriation of the company’s investment (principally trademarks and goodwill) and that each measure violated Uruguay’s obligation to provide fair and equitable treatment. In making these claims, Philip Morris advanced factual arguments that questioned the public health impact of the measures and legal arguments that sought to limit the right to regulate under the bilateral investment treaty (BIT).

The tribunal accepted the submission of two amicus briefs. The first was an independent brief prepared by the WHO and the WHO FCTC Secretariat. The second was a separate brief prepared by the Pan-American Health Organization (PAHO), which, while serving as WHO’s regional office for the Americas, also has a separate legal status. The WHO/WHO FCTC Secretariat brief described the evidence base underpinning the measures, including both evidence of the risks associated with tobacco use and evidence of the impacts of tobacco packaging and labelling measures. The brief also described state practice and international instruments relevant to the dispute, including the WHO FCTC. However, as an independent brief, it did not take a position on how the dispute should be resolved and did not make legal arguments about interpretation of the BIT. The PAHO brief provided information specific to tobacco control in the region of the Americas and Uruguay and explicitly supported Uruguay’s measures.

The tribunal drew upon the amicus briefs at a number of points in its award, often in making findings of fact. This included relying on the amicus briefs as evidence when evaluating the rationale for the measures and drawing on the briefs with respect to the WHO FCTC and the evidence base underlying it. The appreciable impact of the submissions might be attributed partly to the identities of the amici and their functions under international law. However, it is also noteworthy that the briefs did not focus on legal arguments, but instead contained factual material that the amici were uniquely qualified to present.

There is considerable risk in trying to generalize from one outcome, but it may suggest that intergovernmental organizations could play a more useful role in investment treaty arbitration. Whereas non-governmental organizations and think tanks like the International Institute for Sustainable Development and Center for International Environmental Law have led the way in submitting amicus briefs, intergovernmental organizations could also play a sensitization role that helps tribunals understand the potential systemic implications of their decisions and reasoning. Doing so may also support coherence in the international system and address some of the concerns associated with the impact of investment treaties on the right to regulate.

Dr. Benn McGrady is a Technical Officer (Legal) in the Prevention of Noncommunicable Diseases Department at the World Health Organization where he is responsible for providing technical assistance to WHO Member States and building their legal capacity to prevent noncommunicable diseases. He spoke on this topic at the UNIGE-IISD Lunch Series on Investment Disputes.