Tobacco plain packaging and international investment law : some comments about Philip Morris Asia Limited v. Australia

International investment law is frequently criticized for restricting regulatory space enjoyed by States in important policy areas such as protection of human health. The article tests this hypothesis by analyzing the recent international investment dispute over the tobacco plain packaging law, instituted in 2011 by Philip Morris Asia Limited against Australia under the Agreement between the Government of Hong Kong and the Government of Australia for the Promotion and Protection of Investments (Philip Morris Asia Limited (Hong Kong) v. The Commonwealth of Australia). More specifically, its aim is to examine Australia's compliance with the standards of international investment protection in light of its innovative regulatory control measures. The article argues that a mere limitation of the use of trademarks on marketed products cannot be qualified as indirect expropriation as it does not meet the required threshold of State interference. The article also asserts that compensable expropriation needs to be distinguished from situations where a State, in the exercise of its police powers, affects foreign investments. Measures falling within this category do not give a raise to international State responsibility, unless they meet certain requirements. The article claims that the plain packaging law can be classified as such measures. With regard to the fair and equitable treatment (FET) claim, the article shows that PMA's strongest argument is that the Regulations are arbitrary and go beyond the acceptable margin of legislative change. The investor's chances of succeeding depend on how deep the investment tribunal wishes to analyse the plain packaging measures. Jurisprudence of investment tribunals shows that they abstain from substantive analysis of such measures and are deferential to the host States, provided that the measures are adopted with due process, with due consideration and are non-discriminatory. This leads the authors to conclude that it is unlikely that the tribunal will find violation of the FET standard. On the basis of the presented analysis, the article concludes that international investment law generally does not limit State policies in relation to tobacco control, even if such policies affect investments held by transnational tobacco companies.