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A Canadian appeal court has thrown out a lower-court ruling that said “Product of Israel” must not be placed on the label of wines made in Jewish settlements in the West Bank. But the fight is far from settled, and returns now to a government regulatory body for a decision on the appropriate label.

Federal law requires that “a clear indication of the country of origin shall be shown on the principal display panel of a wine.”

Two years ago, Federal Court Justice Anne Mactavish ruled that Canadians’ constitutional right to freedom of expression includes the right to accurate labelling, so that individuals can express their political views in their purchasing decisions, if they wish. She found the “Product of Israel” label false, misleading and deceptive, and said that while she was not deciding on the legal status of the settlements, all parties to the case had said the settlements were not part of Israel. She sent the issue back to the Canadian Food Inspection Agency (CFIA), a regulatory body that had accepted the labels, to reconsider its position in light of her ruling.

On Wednesday, the Federal Court of Appeal agreed that the CFIA should have another look – but without considering Justice Mactavish’s ruling. And this time, the appeal court said the agency needs to do a better job of explaining the reasons for its ruling than it did the first time. The appeal court added that the food inspection agency could still consider the Charter rights of wine purchasers as it decides on the labelling issue. (The two wines directly at issue are Shiloh Legend KP 2012 and Psagot Winery M Series, Chardonnay KP 2015.)

David Kattenburg, a Winnipeg man who describes himself as the Jewish child of Holocaust survivors and a human-rights activist, had complained about the labels to the food inspection agency, and then to its appeals office, which upheld the agency’s decision to allow the “Product of Israel” label. He then went to Federal Court, asking it to review the decision of the food inspection body. When he won, the Attorney-General of Canada, representing the food inspection agency, appealed.

This week’s 3-0 Federal Court of Appeal ruling, written by Chief Justice Marc Noël, does not point to the politics of the Middle East. Instead, it relates to the complexities of administrative law – the review, by a court, of a matter initially decided by an administrative or regulatory body.

The inspection body had said the key to its decision was advice from Global Affairs Canada on this country’s free-trade agreement with Israel. Under that agreement, the West Bank is deemed “territory where Israel’s customs laws are applied.” But that wording, the appeal court said, does not indicate the occupied territories are part of Israel. And the CFIA was unclear, it said, on the pivotal issues: What constitutes “false and misleading” information, and “from whose eyes?”

Two lawyers representing Psagot Winery said they were pleased by the decision. “Psagot Winery proudly produces ‘Products of Israel’ and will remain at the forefront of defending Israeli products in Canada and around the world,” Aaron Rosenberg and David Elmaleh said in an e-mail.

Dimitri Lascaris, a lawyer representing Mr. Kattenburg, said his client’s victory is inevitable. “It makes no sense to allow ‘Product of Israel’ when the Canadian government itself recognizes that the West Bank is not part of Israel, and that the settlements are illegal.”

The Supreme Court of Canada stresses that judges insist on a clear explanation from those bodies, and not substitute their own resolution to a case, the appeal court said. Justice Mactavish, who is now a member of the appeal court, made her ruling before a 2019 Supreme Court decision known as Vavilov affirmed that principle.

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