JTI-Macdonald Corp, one of three tobacco companies in a years-long dispute with provinces and smokers over cigarette harms, has rejected a Can$32.5 billion arbitration proposal announced earlier this month.
In a filing with the Ontario Superior Court of Justice ahead of a hearing on Thursday, the company said it could not support the agreement due to “critical outstanding issues.”
These include the settlement amount — which JTI-Macdonald said it opposes — and the unresolved matter of how the payment would be split between the multinationals.
It also said the deal potentially “introduces significant commercial uncertainty and ambiguity in the application of the settlement on the Canadian tobacco industry.”
“As a result, JTI-Macdonald and its tobacco company group will not support the (arbitration) plan in its current form,” it said in the court document.
Under the terms of the agreement, a total payment of Can$32.5 billion would be made between several tobacco companies to end lawsuits in Canada.
They include Philip Morris’s Canadian subsidiary, Rothmans Benson & Hedges (RBH); British American Tobacco (BAT) through its Canadian subsidiary, Imperial Tobacco Canada; and Japan Tobacco International (JTI).
The plan, announced on Oct. 17, would end any claims against the companies related to the manufacturing, marketing, sale, use or exposure to tobacco products.
Class actions and legal efforts by the provinces to recover health care costs would also be dismissed.
The case began in June 2015 when the Quebec Superior Court ordered the three manufacturers to pay billions of dollars in damages to tens of thousands of Quebec tobacco victims, including smokers or ex-smokers suffering from emphysema, lung cancer or throat cancer.
The order was upheld on appeal in 2019, prompting the companies to seek creditor protection.
An Ontario court later put the legal proceedings on hold as the parties sought a negotiated settlement.
On Thursday, the Ontario court extended a stay of proceedings until Jan. 31, 2025.
