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Uruguay Wins Lawsuit Against Philip Morris Over Anti-Tobacco Regulation

Uruguay won a landmark lawsuit against U.S. tobacco giant Philip Morris, which had sued the South American country's government over anti-tobacco regulations implemented in 2009.

"The Uruguayan government has won. The claims of the tobacco companies have been roundly rejected," President Tabare Vazquez said in a televised address on state media on Friday.

"Without violating any treaty, our country has fulfilled its inalienable right to protect the health of its people."

Vazquez, an oncologist by training and an anti-smoking champion, has implemented some of the strict anti-tobacco regulations of the world. He was the driving force behind the 2006 ban on smoking in enclosed public places in Uruguay, the first country in South America to do so.

The court ruling upheld the sovereign power of the state to set its health policies and stressed the importance of putting public health over commercial interests, Vazquez said.

The arbitration case was going on in the World Bank's International Centre for Settelement of Investment Disputes (ICSID). The Washington-based tribunal ordered the company to pay $7 million to the Uruguay government and to cover court fee and expenses.

"We thank the Tribunal for its assessment and respect its decision," Marc Firestone, Philip Morris International Senior Vice President and General Counsel, said.

"For the last seven years, we have already been complying with the regulations at issue in the case, so today's outcome doesn't change the status quo."

The company never questioned Uruguay's authority to protect public health, and the case was not about broad issues of tobacco policy, he said.

"The arbitration concerned an important, but unusual, set of facts that called for clarification under international law, which the parties have now received," Firestone added.

Philip Morris had alleged that Uruguay's anti-tobacco regulation that required 80 percent graphic warning on the cigarette packets and single representation for a brand were in violation of a bilateral treaty between the country and Switzerland.

The company also claimed that such regulation hurt its intellectual property rights and sales as it was forced to withdraw several of its products, including some Marlboro sub-brands, from the Uruguayan market.

The latest ruling is one of the many legal setbacks Philip Morris had thus far this year. In May, the European Court of Justice upheld the decision to impose plain tobacco packaging and a ban on menthol cigarettes.

An English court also upheld the British government decision to implement the plain tobacco packaging, rejecting a challenge from the company and its peers.

More and more countries are adopting stringent anti-tobacco regulations over public health concerns.

President Vazquez urged other countries to fight tobacco use and smoking "without fear of reprisal from the powerful tobacco industry". He stressed that the latest court ruling has set a precedent when such disputes arise in future.

by RTT Staff Writer

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