18/12/2015 2:22 PM AEDT | Updated 15/07/2016 12:51 PM AEST

Trade Pact Tested, Australia Wins Big Tobacco Fight

Fairfax/Nic Walker

SYDNEY – Australia has had a big win over big tobacco and has successfully tested dispute clauses in international trade pacts, with Philip Morris Asia losing its challenge over the Federal Government’s landmark plain-packaging laws.

Friday’s unanimous decision by a Singapore based, Permanent Court of Arbitration, means the Turnbull Government has won the first investor-state dispute brought against Australia, while the plain cigarette packaging laws introduced by the Gillard Labor Government in 2011, and enacted in 2012, will stay in place.

It comes on the day France becomes the fourth nation after Australia, the UK and Ireland, to pass laws to enforce plain packaging of tobacco and just days after Bulgaria indicated it was joining more than 20 countries moving towards similar laws.

Phillip Morris has dismissed the decision and indicated its fight will go on.

“There is nothing in today’s outcome that addresses, let alone validates, plain-packaging in Australia or anywhere else,” Marc Firestone, Philip Morris international senior vice president, said in a statement.

"It is regrettable that the outcome hinged entirely on a procedural issue that Australia chose to advocate instead of confronting head on the merits of whether plain packaging is legal or even works."

The full decision has not been published yet, but the tribunal agreed with Australia’s position that Philip Morris Asia’s challenge under the Australia Hong Kong Bilateral Investment Treaty was outside its jurisdiction.

The tobacco giant brought action using the treaty’s controversial investor-State dispute settlement (ISDS) mechanism, a clause also in the recently negotiated Trans Pacific Partnership (TPP).

The Tribunal is expected to publish the decision on its website as soon issues regarding confidentiality have been resolved.

The Minister responsible for tobacco policy, Fiona Nash has praised the outcome, saying smoking does untold harm to Australians.

“We welcome the unanimous decision by the Tribunal agreeing with Australia’s position that it has no jurisdiction to hear Phillip Morris’s claim,” she said.

“Plain packaging is a legitimate public health measure which is consistent with Australia’s international legal obligations.”

Labor's Health spokeswoman, Catherine King, has paid tribute to the Labor politicians who brought in the laws.

"This is a great vindication of the work by (former Labor Attorney-General) Nicola Roxon and Tanya Plibersek to promote world leading health," she said.

"This is a fantastic public health win."

It’s also been welcomed by the Public Health Association of Australia.

“The tobacco industry’s desperate legal efforts have failed yet again,” PHAA tobacco spokesperson Professor Mike Daube said.

“They are the big losers, but the thousands who will not die from smoking are the winners."

"The tobacco companies are desperate to prevent plain packaging here and internationally because they know it works”.