The Margin of Appreciation Debate over Novel Cigarette Packaging Regulations in Philip Morris v. Uruguay

The margin of appreciation doctrine, developed by the European Court of Human Rights, generally refers to how much deference the Court decides to accord individual States in fulfilling their obligations under the European Convention on Human Rights. This concept has been borrowed by the Tribunal of the International Centre for the Settlement of Investment Disputes (ICSID) in Philip Morris v. Uruguay, an investment dispute involving novel cigarette packaging regulations, requiring single presentation for each cigarette brand. While Philip Morris claimed the single presentation requirements (SPR) infringed investors’ rights to use its trademark, the Tribunal applied the doctrine confirming Uruguay’s rights to regulate for the benefit of public health. However, one arbitrator submitted a dissenting opinion rejecting its applicability to the investment dispute given the SPR was adopted without sufficient evidence and due consideration by the Uruguayan government. This paper tries to examine whether and how the margin of appreciation doctrine can be applied by an investment tribunal to evaluate the legality of a newly introduced tobacco control regulation devoid of supporting scientific evidences. This paper argues that such doctrine should be applied cautiously to avoid having an easy excuse for the tribunal to refrain from substantive reviews over investor’s claims, and this doctrine can be adjusted by investment tribunals to establish a balanced standard of review theory, accommodating both the States’ rights to regulate and the private rights of investors.