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Indian Case Summary

Union Of India . vs M/S. Union Carbide Corporation on 14 March, 2023 – Case Summary

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In the case of Union of India vs M/S Union Carbide Corporation on 14 March 2023, the Supreme Court of India was confronted with a curative petition filed by the Union of India, seeking reconsideration of the settlement that was effected in the aftermath of the Bhopal Gas Tragedy of 1984. The tragedy occurred due to the escape of deadly chemical fumes from the factory owned and operated by M/s Union Carbide India Limited (UCIL) in Bhopal, resulting in a mass disaster that the Court labeled as “unparalleled in its magnitude and devastation.”

Background and Claims in the Present Petitions

The Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985, was enacted by the Government of India to provide remuneration to victims and create an institutional framework for disbursal of remedies. The Act granted the Central Government an exclusive right to represent and act in place of every person entitled to make a claim for compensation.

Several actions for compensation were brought in the United States District Court for the Southern District of New York against Union Carbide Corporation (UCC), a New York-based corporation which owned 50.9% stock in UCIL at the time of the tragedy. However, UCC resisted the jurisdiction of the New York Court on grounds of forum non conveniens, claiming that it had subjected itself to the Courts of India.

A suit was filed by the Union of India against UCC before the District Judge, Bhopal, seeking compensation of approximately US $ 3.3 billion. An interim order was passed directing UCC to deposit a sum of Rs. 350 crores by way of interim compensation. This amount was later reduced to Rs. 250 crores by the Madhya Pradesh High Court.

Settlement and Subsequent Developments

The Union of India and UCC endeavored to negotiate a settlement, resulting in UCC agreeing to pay a sum of US $ 470 million to the Union of India in settlement of all claims, rights, and liabilities relating to and arising out of the Bhopal Gas disaster. The terms of the settlement were set out in the orders of the Supreme Court passed on 14th and 15th February 1989.

However, the settlement was later challenged, and the extinguishment of criminal liabilities by the settlement was held to not be appropriate. The Court also noted that if the compensation was found to be inadequate, the Union of India, as a welfare state, should make good the deficiency.

Curative Petitions by the Union of India

The Union of India filed a curative petition 19 years post the settlement (i.e., in 2010) seeking to reopen the same. The Union’s claims were based on three categories:

  1. Claim on account of incorrect and wrong assumption of facts and data in the impugned judgments and orders.
  2. Claim on account of actual expenditure incurred by the State towards relief and rehabilitation measures.
  3. Claim on account of environmental degradation.

The Union of India also claimed that several aspects, such as the devaluation of the rupee, interest rate, purchasing power parity, and the inflation index ought to be taken into account.

UCC’s Submissions

The curative petitions were strongly opposed by UCC. The preliminary objection was on the very maintainability of a curative petition after two decades of the settlement. It was submitted that this was in breach of the principles enshrined in Rupa Ashok Hurra v. Ashok Hurra & Anr., wherein the Supreme Court had specified very limited contours for its curative jurisdiction.

The case is still ongoing, and the final decision is yet to be made.