We refer to Philip Morrts Asia Limited's Notice of Claim (Notice) under the Agreement between the Government of Hong Kong and the Government of Australia for the Promotion and Prolection of Investments (Ageement), whloh was served on you on 27 June 2011.

As set out in paragraph 2 of the Notice, and pursuant to Art. 10 of the Agreement, Philip Morris Asia Limited would like to confer with representatives of the Commonwealth of Australia with a view to negotiating an amloable settlement. Please let us know when you would like to meet for that purpose.

If an amlcable settlement oannot be reached within three months of service of the Notice, the parties are, absent other agreement, bound to submit the dispute to arbitration under the Arbitration Rules of the United Nation. Commission on International Trade Law 2010.