Case Briefing: UNION OF INDIA . vs M/S. UNION CARBIDE CORPORATION 2023
Case Title and Citation
Union of India & Ors. Versus M/S. Union Carbide Corporation & Ors. CURATIVE PET (C) No.345-347 of 2010 in R.P. No.229/1989 & 623-624/1989 in C.A. No.3187-3188/1988 and SLP (C) No.13080/1988 Date of Judgment: March 14, 2023
Factual Background
A “horrendous tragedy” occurred on the night of December 2nd and 3rd, 1984, in Bhopal due to the escape of deadly chemical fumes from a factory owned and operated by M/s Union Carbide India Limited (UCIL). This mass disaster was labeled as “unparalleled in its magnitude and devastation”. The Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985, granted the Central Government the exclusive right to represent the victims and enter into compromises. In 1989, the Supreme Court recorded a settlement between the Union of India and Union Carbide Corporation (UCC), whereby UCC agreed to pay US $ 470 million (approximately Rs. 750 crore) in settlement of all claims, rights, and liabilities arising from the disaster. This settlement was upheld during subsequent review proceedings, although the closure of criminal liabilities was reviewed. In 2010, 19 years after the settlement, the Union of India filed the present curative petitions seeking to reopen the settlement. The Union sought to ‘top up’ the settlement amount, claiming that the original settlement was based on a “wrong assumption of facts and data,” particularly concerning the estimated number of deaths and injuries.
Issue(s)
- Whether the curative petitions filed by the Union of India, decades after the final settlement, were maintainable under the restrictive parameters set forth for curative jurisdiction.
- Whether the Supreme Court should exercise its power to unilaterally enhance or ‘top up’ the US $ 470 million settlement amount agreed upon by the parties, based on updated figures for deaths, injuries, and claims related to relief expenditure and environmental degradation.
Decision of the Supreme Court
The Supreme Court dismissed the curative petitions.
Reason for the decision
The Court provided the following key reasons for refusing to reopen or enhance the settlement:
- Maintainability of Curative Petitions: The Court expressed “great hesitation” in granting sui generis relief (topping up the settlement) through the curative petitions, as the Union’s plea did not fall under the limited contours established for curative jurisdiction, which typically addresses violations of natural justice or apprehension of bias. The Court found it difficult to accept an expansive interpretation of the curative jurisdiction.
- Validity of Settlement and Finality: The original settlement’s basic motivation was the compelling need for urgent relief for the victims, preferring immediate payment over protracted and uncertain litigation, especially since UCC’s Indian assets were only about Rs. 100 crores. A consensual settlement cannot be unilaterally enhanced without the consent of both parties. Providing closure to a legal controversy (lis) is a very important aspect, particularly in a tort claim of this nature.
- Adequacy of Compensation: The Union of India’s claim of deficiency was predominantly based on a huge increase in minor injury cases. However, the Court noted that the amount of compensation allocated for all categories was found to be on the higher side, and the available funds, including accrued interest and favorable exchange rate fluctuation, were sufficient and had, in fact, been dispersed, doubling the overall rate of compensation for claimants. The fact that Rs. 50 crore still lay undisbursed with the Reserve Bank of India reinforced the position that the settlement amount was sufficient.
- Union’s Responsibility: The review judgment of 1991 clearly stipulated that if the settlement fund was found inadequate, the Union of India, as a welfare State, should make good the deficiency. The Union’s attempt to fix this liability on UCC after being negligent in following court directions, such as failing to procure the mandated medical insurance policy for future victims, was deemed improper.
Conclusion
The curative petitions seeking to reopen and ‘top up’ the $470 million settlement fund were dismissed due to lack of legal foundation in known principles, such as sui generis relief, and because the Union failed to show that the settlement amount was actually inadequate, especially since the responsibility for any deficiency lay with the Union as a welfare state. The remaining Rs. 50 crore lying with the RBI shall be used by the Union of India to satisfy any pending claims in accordance with the 1985 Act and the scheme framed under it.
Case Materials:
Day 1 of Arguments: 10 January 2023 | (Video Recording)
Day 2 of Arguments: 11 January 2023 | (Video Recording)
Day 3 of Arguments: 12 January 2023 | (Video Recording)
