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Industry Information

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Australian plain packaging legal action’s outcome to cost litigants millions

Date:2019-05-12 09:05:50

Tobacco companies are facing hefty bills after failing in a challenge to the Australian government’s plain packaging laws.

Australia was the first country in the world to introduce plain packaging. When plain packaging laws for tobacco became mainstream in Australia five years ago, the Government overnight was hit with lawsuits from major tobacco companies including Philip Morris, Imperial Tobacco and Japan Tobacco who went to the High Court in Canberra with a constitutional challenge to the breakthrough laws.

Once overturned, their challenge was taken globally to the International Permanent Court of Arbitration (PCA) on the basis that the plain packaging legislation breached Australia’s Bilateral Investment Treaty with Hong Kong. One of the principal plaintiffs, Phillip Morris sought billions in compensation or the dismantling of the plain packaging laws.

The PCA, having ruled against Philip Morris, the British tobacco giant has been ordered to pay the Australian Government’s legal costs. While the exact amount has not been revealed, sources close to the issue estimate these to be as high as 50 million AUD.