- British American Tobacco said its Canadian subsidiary Imperial Tobacco Canada had been granted creditor protection on Tuesday, giving the company temporary reprieve from compensating billions to smokers in Quebec.

'This has the effect of staying all current tobacco litigation in Canada against ITCAN and other Group companies,' the company said.

Imperial Tobacco Canada decision to file for creditor protection comes after the Quebec Court of Appeal had held the industry liable for a maximum of C$13.6bn as compensation to smokers in Quebec. It also followed the recent decision by another Canadian tobacco company, JTI-Macdonald, to seek, and subsequently obtain, creditor protection.

'If ITCAN had not also obtained court protection, it could have been required to pay for all or part of JTI-Macdonald's share of the Quebec judgment, in addition to its own,' the company said.

In seeking protection creditor protection , ITCAN would 'look to resolve not only the Quebec case but also all other tobacco litigation in Canada,' the company said.

'Imperial Tobacco Canada has informed us that it disagrees with the Court's judgment. However, we understand that CCAA protection will provide Imperial Tobacco Canada an opportunity to settle all of its outstanding tobacco litigation under an efficient and court supervised process whilst continuing to run its business in the normal course,' British American Tobacco said. At 8:26am: [LON:BATS] British American Tobacco PLC share price was -30.25p at 3055.75p

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