11 October, 2016
The claim concerned Phillip Morris Asia (PM Asia) against Australia regarding its tobacco plain packaging legislation. The Permanent Court of Arbitration (PCA) published, in a redacted form, the UNCITRAL award on jurisdiction and admissibility finding that the reorganisation of PM Asia under the sole ownership of a Hong Kong umbrella company was an abuse of process.
The PCA found that the sole purpose of the restructuring was to enable PM Asia to bring a treaty claim.
The dispute was already foreseeable at the time of the reorganisation and therefore the claim was inadmissible. For the dispute to have been permissible, the restructuring should have occurred before any claim was in contemplation.
This seems a difficult hurdle but could be overcome if the restructuring had occurred as soon as the BIT became available or very early on in the investment covered by the BIT.
Philip Morris Asia Limited v The Commonwealth of Australia (PCA Case No. 2012-12)
