Facts
Union Carbide Corporation is a multinational company, with a sister company Union Carbide India Limited having its plant located in Bhopal, Madhya Pradesh. On 3rd December 1984, a massive escape of lethal gas from the MIC Storage Tank which led to the incident known as the Bhopal Gas Tragedy where 2,600 people died instantaneously and many more suffered from serious ailments. Suits were filed in the US for damages by the affected but were dismissed due to jurisdictional issues. However, if any procedural issues arose with the Indian courts, UCC was free to approach the US courts. Therefore, the case was put before the Supreme Court in India.
Issues
- Whether the sum of 470 million dollars as settlement decided by the US Courts is just, equitable and reasonable?
- Whether far reaching principles of liability apply in case of multinational companies operating with inherently dangerous technology?
Reasoning
Many innocent citizens were forced to be in near destitute conditions without basic necessities due to the disaster, and many more were subject to fatal aftereffects. Thus, the questions on complex legal principles should be deliberated upon only after the question on compensation of victims is decided.
The court in its judicial and humane duty decided to give immediate relief to those affected, having their basic fundamental right of article 21 taken away from them.
The amount of compensation was not decided in the manner usually adopted for fatal accidents. An unusually large number of deaths was involved in this situation, particularly that of very young children. Ordinary standards of ascertaining compensation thus, could not have been applied and after referring to the MC Mehta case, an interim compensation of Rs. 250 crores was awarded.
Estimated data of fatal accidents received by the courts was based on hospital records in Bhopal, and from the results of a survey conducted for distribution of ex gratia payments by the government. Every estimate on disability caused was calculated and compensation was decided on a very high scale based on the character of disability.
The remaining amount was decided considering the loss of personal belongings and livestock. A corpus fund was also set up for future compensation and general claims of accident and workmen’s compensation were allocated some funds.
The amount decided was thus based on the facts of the case without particular consideration to any factor, which was mentioned only to give a view of the overall amount. They were assumptions of the truth on which only justness of the amount can be decided.
Multinational companies enter third world countries, due to cheap labour and captive markets, to satisfy their exploitative and hazardous industrial adventurism. They set up the plant in Bhopal in order to improve chemical farming, but it was clearly a very hazardous pursuit of economic gain.
Considering the risk to society, mere compensation was not enough. However, this question was to be decided later and immediate relief was the primary course of action intended by the court.
Further, if any procedural or human mistake was found to be made, the court agreed to rectify them if brought to the court’s attention.
Impact of Decision
The court had a compassionate tone throughout, prioritising compensating the severely affected before the litigation process could cause more delay. The judgement, despite mostly dealing with the compensatory aspect of the incident, sets an important precedent on how multinational corporations need to be held accountable for their actions. The Bhopal Gas Tragedy led to immense loss of not only life and property, but serious harm to flora and fauna. There was contamination of soil, air and water and it caused long term environmental damage. In fact, groundwater, soil, and local ecosystems still show the impact of the disaster. The court, while acknowledging the advancement in chemical fertilisers caused due to the plant, fulfilled its responsibility to the environment and the society at large.
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