Newsletter-21

221 ARBITRATION LAW The second measure, called the 80/80 Regulation, pertains to the increase in size of graphic health warnings printed on the cigarette packages. This Regulation sets forth that the size of health warnings on cigarette packages should increase from 50% to 80%, and only 20% of the cigarette pack could be used for trademarks, logos and other relevant information. The Claimants contended that this is a wrongful limitation of the right to use their trademarks, by preventing their display in the proper form, which further leads to deprivation of intellectual property rights, and reducing the value of their investment. Relief Sought by the Parties The Claimants contend that these measures adopted by Uru- guay constitute breaches of the Respondent’s obligations under BIT, namely, the impairment of use and enjoyment of investments [Article 3(1)], fair and equitable treatment and denial of justice [Article 3(2)], expropriation (Article 5), and observance of commitments (Article 11), entitling the Claimants to compensation. The Claimants requested from the arbitral tribunal to order the Respondent to withdraw the challenged regulations or refrain from applying them against Claimants’ investments, and award damages incurred through the date of such withdrawal; or, in the alternative, award Claimants damages of at least USD 22,267,000.00, plus com- pound interest running from the date of breach to the date of the Re- spondent’s payment of the award. Uruguay’s position is based on the defense that the measures were adopted in compliance with Uruguay’s international obligations, for the sole purpose of protecting public health, and they were applied in a non-discriminatory manner to all tobacco companies, within the scope of the exercise of Uruguay’s sovereign powers. Arbitral Tribunal’s Analysis and Conclusion The arbitral tribunal firstly analyzed whether the measures adopt- ed constituted expropriation under the BIT. The tribunal answered this question negatively, and concluded that the challenged measures were a valid exercise by Uruguay of its police powers for the protection of