AG Client Uruguay Prevails in Cigarette Packaging Arbitration Dispute with Philip Morris International

July 11, 2016

A World Bank tribunal has rejected Philip Morris' challenge to Uruguay's cigarette packaging regulations, ruling that the regulations were reasonable exercises of the country's sovereign right to protect public health; Uruguay's argument before the tribunal was supported by Analysis Group Managing Principal Jeffrey Cohen. Certain changes to Uruguay's cigarette packaging regulations went into effect in 2009. Philip Morris challenged the regulations in 2010 under a bilateral investment treaty between the Government of Uruguay and the Government of Switzerland for the reciprocal promotion and protection of investments. Arbitration was conducted under the International Centre for Settlement of Investment Disputes (ICSID). Mr. Cohen submitted two expert reports on behalf of Uruguay to the ICSID regarding this dispute. During hearings in 2015, Mr. Cohen testified about the economic damages models in the case. As part of its ruling, the arbitration panel also rejected Philip Morris' claim that its investment in Uruguay had been expropriated, and ordered Philip Morris to pay Uruguay's arbitration costs and fees.