Philip Morris, a tobacco giant and hundreds of Thai retailers vowed to sue the kingdom's health authorities over new rules introducing bigger and more prominent anti-smoking warnings on cigarette packets.
The Tobacco firm, which makes the Marlboro brand, says the industry was not consulted before an April decision by Thailand's Health Ministry to extend health warnings from 50 to 85 percent on both sides of every cigarette packet sold in the country.
"Given the negative impact this policy will have on our trademarks and the fact the Ministry ignored our voice and the voices of thousands of retailers enacting this rule, we have no choice but to ask the court to intervene," company spokesman Onanong Pratakphiriya said in a statement, adding the lawsuit will be brought before July 4.
Philip Morris has fought bitter legal battles with governments before, most famously losing an action against a pioneering Australian government policy to introduce entirely plain cigarette packaging with the same typeface and graphic images of diseased smokers.
The Thai Tobacco Trade Association (TTTA), which represents 1,400 retailers across the kingdom, said it will also ask the courts to overturn the new rules.
"Everyone already knows that smoking is dangerous... Thailand has some of the biggest health warnings in the world, I can't see why the new requirement is necessary," said Varaporn Namatra of the TTTA.
The ruling is due to come into force in October.
Thailand's Deputy Health Minister Cholnan Srikaew swatted away the threat of legal action.
"We have the authority to do it... the law allows the ministry to do it," he said.
"We decided to enlarge the warning and picture because the number of new smokers is high and the age is younger," he said, adding that he hoped the enlarged pictures "will make new smokers rethink before they decide to smoke".
Thailand bans smoking in public places but figures from its Office of Tobacco Control said smoking rates among those 15 years and older remained roughly unchanged from 27.2 percent in 2009 to 26.9 in 2011.
The tobacco lobby has systematically tried to block laws curbing their ability to advertise their products or raise taxes on cigarettes, but more and more countries are adopting the approach as the health costs of smoking mount.
Last week European Union member states agreed to cover 65 percent of packaging with health warnings, but the new rule needs approval from the European Parliament to come into force.
The World Health Organization has raised concerns the tobacco lobby is seeking to reach new, mainly young consumers despite widespread bans on billboard and television advertising by sponsoring events, selling branded clothing and product-placement in reality TV shows