No abstract

<p>In recent years, tobacco has been the subject of increasingly more stringent regulatory attention. At the same time there has been a proliferation of bilateral and multilateral investment agreements, While the former compels state Parties to take action to reduce tobacco consumption, many of the latter provide a guarantee to foreign investors that states will not enact measures which result in a substantial reduction of the value of their property. Recent disputes illustrate that these two sets of obligations are not capable of coexistence. In 2012 Australia took regulatory action, enacting legislation obliging the sale of tobacco products in “plain” packets. Philip Morris, Japan Tobacco International and British American Tobacco took to a number of different fora to challenge the measures as being in violation of their rights under national constitutional law, world trade law, and under nternational investment law. While the domestic law claims were limited to an assessment of the measure in the context of the companies’ constitutional rights, and the WTO claims face a significant hurdle because of the public interest nature of the regulations, the claims brought as international investment arbitrations are not subject to these same constraints. The result is a conflict of obligations. States are left in a position where they must take steps to reduce tobacco consumption while at the same time refraining from action amounting to expropriation of an investment. Does one of these obligations take priority of the other? Or must they both, as the Vienna Convention on the Law of Treaties suggests, be performed in good faith? The application of various conflicts rules imported from domestic and private international law into the international law sphere more generally yields some answers, goes some way to resolving the conflict, and reconstitutes the otherwise increasingly fragmented international law.</p>

<p>In recent years, tobacco has been the subject of increasingly more stringent regulatory attention. At the same time there has been a proliferation of bilateral and multilateral investment agreements, While the former compels state Parties to take action to reduce tobacco consumption, many of the latter provide a guarantee to foreign investors that states will not enact measures which result in a substantial reduction of the value of their property. Recent disputes illustrate that these two sets of obligations are not capable of coexistence. In 2012 Australia took regulatory action, enacting legislation obliging the sale of tobacco products in “plain” packets. Philip Morris, Japan Tobacco International and British American Tobacco took to a number of different fora to challenge the measures as being in violation of their rights under national constitutional law, world trade law, and under nternational investment law. While the domestic law claims were limited to an assessment of the measure in the context of the companies’ constitutional rights, and the WTO claims face a significant hurdle because of the public interest nature of the regulations, the claims brought as international investment arbitrations are not subject to these same constraints. The result is a conflict of obligations. States are left in a position where they must take steps to reduce tobacco consumption while at the same time refraining from action amounting to expropriation of an investment. Does one of these obligations take priority of the other? Or must they both, as the Vienna Convention on the Law of Treaties suggests, be performed in good faith? The application of various conflicts rules imported from domestic and private international law into the international law sphere more generally yields some answers, goes some way to resolving the conflict, and reconstitutes the otherwise increasingly fragmented international law.</p>