The perfect (take home) exam question. Court of Appeal plain packaging v Bundesverfassunsgericht Energiewende.

Update 12 april 2017: the UK Supreme Court refused permission to appeal [the decision should appear here in due course], hence the Court of Appeal’s ruling is now final.

Isn’t it just a perfect exam question for a graduate course, nay this question involves so many issues it could arguably serve as one single exam for a whole law degree: such is the intensity of legal areas at issue: constitutional law, international law, international trade, regulatory law and risk analysis, intellectual property law…

Discuss why the Court of Appeal for England and Wales denied Government wrongdoing in plain packaging, while the German Bundesverfassungsgericht rejected an argument of expropriation in Energiewende yet held that German Government must nevertheless pay compensation to the energy companies involved (E.ON, RWE and Vatenfall).

Source tip: you may want to consult my former student Dr Catherine Banet’s excellent analysis on the Vatenfall issue.

Issues tip: a good way to go about it would be to draft a table of issues that both cases have in common and those which they do not (eg the Court of Appeal’s review of intellectual property). A discussion of the precautionary principle would not go amiss (in the plain packaging case: specifically whether precaution applies to uncertainty as to efficiency of remedies rather than uncertainty as to a phenomenon). A point of discussion may also be why the CA refers profusely to European precedent while the Bundesverfassungsgericht does not. Finally, any consideration of the link between the latter proceedings and the concurrent ISDS procedure, will gain you brownie points.

To fellow faculty out there: if you do use this exam Q, please do share good student answer copies.

Geert.

 

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

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 BIT concerned. With reference to ICSID precedent, the tribunal declined to make ex-post economic /financial  evaluations determine its jurisdiction – all the more so since such business, economic, financial… ex post evaluation is subject to tit for tat data and figures.

The case will therefore continue on the merits.  Interesting material.

Geert.

Plain packaging and the Australian Constitutional debate: the Act does not amount to ‘acquisition’

Update 25 May 2015 BAT and PMI now have also launched in the High Court in the UK .with BAT putting aside the Australian ruling, reported below, as distinguishable, and PMI focusing on EU trade mark laws.

As reported earlier, the High Court of Australia held in the summer that the Australian Plain Packaging regulations are not unconstitutional. It has now also released its reasons for finding so. The relevant Commonwealth constitutional provision is Section 51(xxxi) which confers upon the Commonwealth Parliament the power to make laws with respect to:

“[t]he acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws”.

‘Just terms’ (including compensation) are only due if there is an ‘acquisition’; this, the High Court held, is not the case here. It notes (per French CJ)

‘Taking involves deprivation of property seen from the perspective of its owner. Acquisition involves receipt of something seen from the perspective of the acquirer. Acquisition is therefore not made out by mere extinguishment of rights.‘ (footnotes omitted).

And further

‘Importantly, the interest or benefit accruing to the Commonwealth or another person must be proprietary in character. On no view can it be said that the Commonwealth as a polity or by any authority or instrumentality, has acquired any benefit of a proprietary character by reason of the operation of the TPP Act on the plaintiffs’ property rights.’

There is plenty of scope for distinguishing the Australian constitutional arguments from other jurisdictions (indeed the judgment itself refers to distinctions with the US Constitution). Moreover, as I have already flagged in an earlier posting, the legal fronts on which this battle is fought are very wide. Immediate reactions during the summer (along the lines of ‘with this judgment there is no stopping plain packaging regulations’) seemed a bit premature to me –  they do all the more now that we have had a chance to read the actual judgment.

Geert.

Plain packaging – One battle might be over, plenty to follow

I reported earlier that the plain packaging dispute is fought on many fronts. As has been widely reported, the domestic challenge to the Australian regime would seem to have been won by the Government (we have a small wait for the full ruling to be delivered).

However, this dispute is fought on many fronts. Over at the international economic law blog, Simon Lester gives an excellent summary of the status quo on the various issues, and links to academic thought on chances of success. Evidently the plain packaging rules are not home and dry yet.

As often, one should be careful what one asks for: Tasmania is reported to be pondering a gradual ban on smoking, allowing those adults who have picked up the habit to peter it out, while banning tobacco consumption to all others. This may be in response to an often heard argument: if smoking is that bad for you, why not ban it rather than happily cashing in on the coinciding taxation. In legal terms: given the cited health issues related to tobacco consumption, may a ban be the only proportionate action? (and what does that mean in consistency terms for other health issues such as obesity, high adrenaline sports, alcohol…).

Geert.