11A.5Major milestones in legal challenges to the legislation

Last updated: November 2018

Suggested citation: Scollo, MM, Greenhalgh, EM, & Zhou, S. 11A.5 Major milestones in legal challenges to the legislation. In Scollo, MM and Winstanley, MH [editors]. Tobacco in Australia: Facts and issues. Melbourne: Cancer Council Victoria; 2018. Available from: http://www.tobaccoinaustralia.org.au/chapter-11-advertising/11a-5-major-milestones-in-legal-challenges-to-the-

The Tobacco Plain Packaging Act 2011 has been challenged in several legal fora.

Constitutional challenges filed in Australia's High Court centred on section 51(xxxi) of the Australian Constitution which allows Parliament to make laws with respect to 'the acquisition of property on just terms'. These challenges were dismissed in August 2012. Philip Morris Asia Limited also unsuccessfully challenged Australia's plain packaging measures under a bilateral investment treaty between Australia and Hong Kong. Cuba, the Dominican Republic, Honduras, and Indonesia unsuccessfully challenged the legislation under the World Trade Organization agreements, claiming that tobacco plain packaging violated obligations regarding intellectual property and technical barriers to trade. 

All three challenges have since been dismissed, although an appeal is ongoing in the WTO case. Major developments to date include the following:

Apr 2010: Australian government announces its intention to adopt mandatory tobacco plain packaging. 

23 Feb 2011: Philip Morris Asia Limited, Hong Kong, acquires a 100% stake in Australian affiliate, Philip Morris Limited, from Philip Morris headquarters in Switzerland.

7 Jun 2011: Dominican Republic raises concerns about legislation at the World Trade Organization Trade-Related Aspects of Intellectual Property Rights (TRIPS) Council meeting. Plain packaging is discussed at several subsequent TRIPS Council and Technical Barriers to Trade Committee meetings.

22 June 2011: Philip Morris Asia Limited files a Notice of Claim under Australia's bilateral investment treaty with Hong Kong, announcing its intention to bring an investment claim if Australia adopts plain packaging legislation.

21 Nov 2011: Tobacco Plain Packaging Act passed by both houses of Parliament. 

21 Nov 2011: Philip Morris Asia Limited files its Notice of Arbitration, commencing investment proceedings against the Australian government.

1 Dec 2011: Tobacco Plain Packaging Act receives Royal Assent, entering into force. Tobacco companies given twelve months to prepare to comply with legislation.

Dec 2011: British American Tobacco, Imperial Tobacco, Japan Tobacco International, and Philip Morris Limited each file a Writ Of Summons in the High Court.

21 Dec 2011: Australia files its response to Philip Morris Asia’s Notice of Arbitration, defending the claim on the merits and arguing the panel does not have jurisdiction because of Philip Morris’ corporate restructuring to gain access to dispute settlement under the Australia–Hong Kong Bilateral Investment Treaty.

13 Mar 2012: Ukraine requests consultations with Australia under the procedures in the WTO Dispute Settlement Understanding, which are a necessary preliminary step to bringing a formal dispute.  

4 Apr 2012: Honduras requests consultations with Australia under the procedures in the WTO Dispute Settlement Understanding.

17–19 Apr 2012: High Court cases heard in Canberra. 

18 Jul 2012: The Dominican Republic requests consultations with Australia under the procedures in the WTO Dispute Settlement Understanding.

14 Aug 2012: Ukraine requests the establishment of a panel under the dispute settlement procedures of the World Trade Organization. The WTO Dispute Settlement Body establishes the panel on 28 September 2012. 

15 Aug 2012: The High Court hands down its orders that the Tobacco Plain Packaging Act 2011 is not contrary to section 51(xxxi) of the Constitution. 

5 Oct 2012: High Court publishes its reasons for rejecting the constitutional challenges.1

15 Oct 2012: Honduras requests the establishment of a panel under the dispute settlement procedures of the World Trade Organization. The Dispute Settlement Body establishes the panel on 25 September 2013.

9 Nov 2012: The Dominican Republic requests the establishment of a panel under the dispute settlement procedures of the World Trade Organization. The Dispute Settlement Body establishes the panel on 25 April 2014.

30 Nov 2012: The investment tribunal in Philip Morris Asia Ltd v Australia outlines the confidentiality procedures that will apply to the dispute, deciding that the Award and procedural orders will be made public.

3 May 2013: Cuba requests consultations with Australia under the procedures in the WTO Dispute Settlement Understanding.

20 Sep 2013: Indonesia requests consultations with Australia under the procedures in the WTO Dispute Settlement Understanding.

3 Mar 2014: Indonesia requests the establishment of a panel under the dispute settlement procedures of the World Trade Organization. The Dispute Settlement Body establishes the panel on 26 March 2014.

4 Apr 2014: Cuba requests the establishment of a panel under the dispute settlement procedures of the World Trade Organization. The Dispute Settlement Body establishes the panel on 25 April 2014.

14 Apr 2014: The Tribunal in Philip Morris Asia Ltd v. Australia decides to bifurcate the proceedings, hearing submissions on jurisdiction and admissibility separately from decisions on the merits.

5 May 2014: The Director General of the World Trade Organization appoints the panellists to the panel that will hear the five WTO disputes. The disputes are formally separate but will be heard by the same panel on a coordinated schedule, and prepare a common report. A total of 40 third parties (including the five complainants when participating as third parties in each other’s disputes) take part in the proceedings, a record for WTO dispute settlement.

28 May 2015: Ukraine requests suspension of the panel proceedings in its case, discontinuing its involvement in the WTO case. The panel’s jurisdiction lapses on 30 May 2016.

17 Dec 2015: The investment tribunal in Philip Morris Asia Ltd v Australia dismisses Philip Morris Asia’s legal challenge, finding that it does not have jurisdiction to hear the dispute. The Tribunal finds that, by transferring its Australian business from its Swiss headquarters to its Asian regional headquarters in Hong Kong in February 2011, and then launching a claim under the Hong Kong BIT, Philip Morris abused its rights under the treaty. It concludes that the restructuring was undertaken for the ‘principal, if not sole, purpose of gaining Treaty protection’.2

8 Jul 2017: The investment tribunal in Philip Morris Asia Ltd v Australia orders Philip Morris Asia to pay a redacted amount to Australia to cover Australia’s costs for defending the investment claim.3  

28 Jun 2018: The WTO panel in Australia – Plain Packaging dismisses the challenge brought by Cuba, the Dominican Republic, Honduras, and Indonesia, finding that plain packaging does not violate the Agreement on Trade-Related Aspects of Intellectual Property Rights or the Agreement on Technical Barriers to Trade.4

19 Jul 2018: Honduras notifies the Dispute Settlement Body of its decision to appeal to the Appellate Body certain issues of law and legal interpretations in the panel report.

23 Aug 2018: The Dominican Republic notifies the Dispute Settlement Body of its decision to appeal to the Appellate Body certain issues of law and legal interpretations in the panel report.

27 Aug 2018: The WTO panel reports for Cuba and Indonesia are adopted by the Dispute Settlement Body and become final and binding in relation to those two complainants.


For more information, documents in the High Court case are available from: http://www.hcourt.gov.au/cases/case-s409/2011  

Documents in the international investment case are available from the Permanent Court of Arbitration’s website at https://pca-cpa.org/en/cases/5/

Documents in the WTO case are available from the following pages for each of the complainants: CubaDominican RepublicHondurasIndonesia, and Ukraine

For discussions in WTO Committees, please see the minutes of the Committee on Technical Barriers to Trade and the Council on Trade-Related Aspects of Intellectual Property Rights

Relevant news and research

For recent news items and research on this topic, click here.(Last updated April 2019)

 

References 

1. JT International SA v Commonwealth of Australia. [2012] HCA 43 (5 October 2012). High Court of Australia, 2012. Available from: http://www.austlii.edu.au/au/cases/cth/HCA/2012/43.html.

2. Philip Morris Asia Limited v Commonwealth of Australia, Award on Jurisdiction and Admissibility (PCA Case No 2012-12, 17 December 2015). https://pcacases.com/web/sendAttach/1711

3. Philip Morris Asia Limited v Commonwealth of Australia, Final Award on Costs (PCA Case No 2012-12, 8 July 2017). https://pcacases.com/web/sendAttach/2190

4. Australia – Certain measures concerning trademarks, geographical indications and other plain packaging requirements applicable to tobacco products and packaging (WT/DS 435/441/458/467) Report of the Panel, 28 June 2018. World Trade Organization, https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds435_e.htm