Metamorphosis: Can an investment loose such qualification because of its negative externalities? The Philip Morris v Uruguay arbitration

gavc law - geert van calster

Update 9 July 2016: the panel sided with Uruguay on the merits, in a move which must boost those rejecting criticism that international trade law, including BITs, MITs and TTIP, deny States’ regulatory autonomy.

A very interesting debate in the PMI v Uruguay arbitration on plain packaging. The decision on jurisdiction (which was taken in July this year) rejected the notion that an ‘investment’ under a BIT looses such qualification as a result of, in effect, its negative externalities. Uruguay had argued that PMI’s interests in Uruguay do not constitute a protected investment since not only do they fail to make any contribution to the Country’s development, but they actively prevent and interfere with such development, due to the health impact of tobacco consumption.

The Panel, having to establish its subject-matter jurisdiction, gave the notion ‘investment’ a broad meaning, in the absence of express language to the contrary in the…

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About Geert van Calster

Geert is an independent legal practitioner and academic. An alumnus of the College of Europe, Bruges (promotion Stefan Zweig), Prof van Calster is the Head of Leuven Law's department of European and international law. Geert is a visiting professor at Monash University (Melbourne) and at the China-EU School of Law in Beijing, and a visiting lecturer at King's College, London. He was previously i.a. a visiting lecturer at Oxford University. He was called to the Bar in 1999 after having worked as of counsel to a City law firm since 1995, and practices in the areas of Private international law /Conflict of Laws; WTO law; (EU) environmental law; and EU economic law.

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