Uruguay's win against tobacco giant Philip Morris over packaging of cigarettes should give MPs in this country confidence they can do the same, the Public Health Association says.
Imperial Tobacco has not ruled out suing the government if its plain packaging law, which had its second reading in Parliament last week, goes ahead.
Public Health Association chief executive Warren Lindberg said governments had been nervous about the cost of fighting law suits against well-funded international tobacco companies.
But Uruguay's win at the World Bank arbitration tribunal should give New Zealand MPs the confidence to progress with plain packaging legislation in this country, despite the threat of being sued, he said.
"This particular case is a very clear confirmation that governments have the right to legislate in the interests of protecting the health of their people," he said.
Imperial Tobacco's global director of corporate affairs, Axel Gietz, visited New Zealand recently as submissions on the law change were due to close.
He was arguing against the proposals, and said Imperial could not rule out suing the government if the law change went ahead.
He spoke to ministers, including a debate with Māori Party co-leader Marama Fox, who walked out towards the end and told Mr Gietz he should "crawl back into the hole that is reserved for the corporate executioners".
Philip Morris, along with British American Tobacco and Imperial Tobacco also recently lost a court case against Australia when they fought that country's plain packaging laws, which came into effect in December 2012.
They were arguing the plain packaging laws contravened intellectual property laws and rights.