Civil Litigation

In September 1986, the Government of India (GOI) instituted a civil suit against Union Carbide Corporation (UCC) in the Court of the District Judge, Bhopal, India, on behalf of all victims of the disaster. In keeping with its consent to jurisdiction given as a condition to dismissal of the U.S. litigation, UCC appeared and defended itself.

During the next three years, extensive proceedings took place in the suit concerning a variety of issues, including the issue of interim relief to the victims.  When the proceedings eventually reached the Indian Supreme Court in 1988, the Court urged UCC, Union Carbide India Limited (UCIL) and the GOI -- in lieu of interim relief -- to reach a final global settlement.  In February 1989, after 24 days of hearings, the Supreme Court recommended a $470 million global settlement that was accepted by UCC, UCIL and the GOI.  Ten days after the decision, UCC paid $425 million and UCIL paid $45 million to the GOI.  The settlement resolved the civil litigation and quashed the criminal proceedings. The Supreme Court subsequently issued a decision explaining, among other things, how it arrived at the sum of $470 million for an overall settlement and why it considered the settlement to be “just, equitable and reasonable.”

In November 1989, Rajiv Gandhi’s government, which entered into the global settlement with UCC, was defeated in national elections.  The opposition parties formed a coalition government, which reopened the question of compensation for the gas victims; concluded that the settlement was wholly inadequate; and instructed the Law Minister to back review petitions brought by activists in the Supreme Court challenging the settlement.

Three different Constitution Benches of the Supreme Court (i.e., a panel of five senior justices appointed by the Chief Justice) conducted hearings that went on for 64 days over a period of two years.  In a 117-page decision, dated December 1989, the Supreme Court upheld the constitutionality of the Bhopal Act and the authority of the GOI to settle on behalf of the victims.

For the complete court decision, please click here.

In October 1991, in a 114-page judgment, the Supreme Court further held that:

  • The civil settlement was “just, equitable and reasonable”;
  • The GOI was required to cover any shortfall in the settlement amount;
  • The GOI was required to buy medical insurance for 100,000 asymptomatic people;
  • The criminal case could proceed, and
  • UCC was requested to fund a hospital in Bhopal for treatment of the victims.

For the complete court decision part 1 please click here.
For the complete court decision part 2 please click here.

Post-1991 Proceedings Regarding the Settlement

Virtually all claims were reviewed and adjudicated by 2002. A total of Rs. 1511.51 crores was paid from the settlement fund, according to a GOI Scheme (program), which established the categories of claims and amounts of compensation, and which was administered by the Bhopal Gas Victims Welfare Commissioner. UCC played no role in the distribution of settlement funds.

The following year, various activist groups petitioned the Supreme Court, seeking disposal of the remaining balance of the settlement funds, which was approximately equal to the amount already paid. In July 2004, the Supreme Court directed the Welfare Commissioner to disburse the balance of Rs. 1503.01 crores to the claimants who had already received compensation, thus doubling the amount of compensation per claimant. Subsequently, the Welfare Commissioner reported (see paragraph 22) that all claims had been adjudicated and that the claimants had been paid all amounts due to them under the Scheme and the directions of the Supreme Court.

In 2006, activist groups sought to require the GOI to increase the settlement fund by five times, alleging that the Supreme Court substantially underestimated the number of victims of the disaster when it approved the settlement. The GOI said the allegations were unfounded and frivolous, and asked the Court to impose sanctions on the activist groups. In 2007, the Supreme Court denied the requested relief on the grounds urged by the GOI.

In 2009, the Welfare Commissioner rejected another challenge to the settlement by activists and the Madhya Pradesh High Court affirmed the decision.

In 2010, activists filed a special petition in the Supreme Court, which the Welfare Commissioner also opposed while defending the settlement. The Supreme Court has not ruled on this petition.