Phillip Morris loses tough-on-tobacco lawsuit in Uruguay
By Malena Castaldi and Anthony Esposito
MONTEVIDEO, July 8 (Reuters) - The World Bank's International Centre for Settlement of Investment Disputes (ICSID) ruled in favor of Uruguay on Friday in a suit filed by Philip Morris International seeking compensation for economic damages caused by the nation's anti-tobacco measures.
Uruguay imposed a ban on smoking in public spaces in 2006, as it raised taxes on tobacco products and forced firms 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 recognized as legitimate and also adopted as part of the sovereign power of our republic," Uruguayan President Tabare Vazquez said in a televised speech.
Vazquez, an oncologist, helped spearhead the measures during his first term in office from 2005 to 2010.
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decision published on Friday, the ICSID said it had ruled to dismiss Philip Morris' demand that the regulations be withdrawn, or not applied to the company, or that it be paid $22 million in damages instead.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. Continuación...