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U.S. Tobacco Firms Seek Settlement With Saudi Hospital
JEDDAH, 18 July (IslamOnline & News Agencies) - Representatives of a Saudi hospital and international tobacco companies are set to meet in Geneva on Wednesday to discuss the possibility of an out-of-court settlement relating to a lawsuit filed by a U.S. hospital for treatment costs of smoking-related diseases, news agencies reported.
The King Faisal Specialist Hospital (KFSH) in Riyadh and international tobacco companies have been locked in a dispute since last February, when the hospital launched its lawsuit for damages and costs wasted in treating tobacco-caused diseases, The Arab News said.
In February, Anwar Al Jabarti, the hospital's Executive Director General, announced that the hospital has filed lawsuits in the U.S. against the tobacco companies, as well as against tobacco factories and their agents in Saudi Arabia.
The lawsuit seeks a $15 billion compensation for the costs of treatment for diseases caused by smoking during the past 25 years, reported the Saudi Press Agency on its online edition.
KFSH proceeded with legal action after the U.S. courts ordered the tobacco companies to pay $246 billion in damages to U.S. states over the next 25 years, The Arab News said.
The courts also banned advertisements on tobacco products.
Saudi Arabia, with a population of only 20 million, is the world's 19th largest importer of tobacco products. Residents of Riyadh alone smoke $54 million worth of cigarettes annually.
In recent years, the Kingdom's cigarette imports have declined considerably; they dropped from SR 1.29 billion in 1991 to SR 633 million in 1996. The government has stepped up a campaign against smoking by setting up a number of specialized clinics to help people kick the habit.
The U.S. government spends about $20 billion annually on treatments for patients suffering from tobacco-related diseases.
On the February 5, Al Jabarti disclosed that an American tobacco company had negotiated with him in order to settle the problem; the company also proposed to extend no less than SR 10 billion ($2.6 billion) in compensation for losses suffered by the hospital.
He added that he turned down the offer and rejected any settlement of the issue outside court.
However, the hospital and tobacco companies seem to want to avoid a court trial.
The Arab News quoted sources close to the case as saying, "Once they reach a preliminary agreement, they will meet again to sign a settlement deal."
The tobacco companies, represented by the Law Office of Salah Al-Hujeilan in Saudi Arabia, initiated the meeting, judicial sources told The Arab News.
On the other hand, if the two sides fail to reach an agreement, the hospital would go ahead with the court action against the firms, both inside and outside Saudi Arabia.
If the tobacco companies are found responsible, the Saudi judicial authorities may take separate action against the companies and their local agents, news sources reported. The international companies can either withdraw from the Saudi market or pay compensation, they went on to say.
KFSH announced last February that U.S. courts have accepted its lawsuits against the tobacco firms.
At the time, the Kuwaiti and Qatari Ministers of Health lauded the decision of the hospital; the Kuwaiti Health Ministry claimed that it might also file a similar suit against tobacco companies and their agents in Kuwait, the Saudi Press Agency said.
The health ministers of Saudi Arabia and the other Gulf Cooperation Council (GCC) states proposed - in a recent meeting in Manama - to increase the tariff on tobacco imports to 150 percent from the current 100 percent.
The GCC states increased the customs tariff on tobacco imports to 100 percent in 1995. They also called for the reduction of nicotine content in tobacco, and banned production of tobacco and its derivatives in all the member countries.
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