Bhopal Tragedy: Why Plaintiff and Defendant Wanted Trials in Each Other’s Country

Methyl Isocyanate, MIC, a lethal gas, leaked from the tanks of the Union Carbide India Limited (UCIL) factory in Bhopal on the intervening night of 2/3 December 1984. One of the worst industrial disasters, it claimed more than 2,500 lives even according to government estimates—those who dispute this figure claim at least three times more died. The victims suffered greatly because of the apathy and callousness of the company’s management, and the legal imbroglio between the plaintiff and defendant, the government of India and the UCIL, has rubbed salt into their wounds for a full thirty-five years.

Initially, the Indian government wanted the trial to take place in the United States while the Union Carbide Corporation or UCC, the parent company of UCIL, headquartered in the US, wanted it to be conducted in India. One side had good reason for wanting the trial outside India—and the other side was motivated by their instinct for self-preservation.

Case Was Not Filed in India

Immediately after the tragedy, then Prime Minister Rajiv Gandhi visited Bhopal and vowed that India would seek compensation for victims of gas exposure from Union Carbide. The Centre passed the Bhopal Gas Leak Act in March 1985 and appointed itself as the sole legal representative of victims. But the law ministry was not sure how to proceed. First, India had no experience in dealing with an industrial disaster case of such magnitude. Secondly, nobody was clear how to fight a multinational giant headquartered in a foreign country. But as a poet said, the flower doesn’t dream of the bee, it blossoms and the bee comes. In this case, bees in the form of lawyers came from the United States, the homeland of UCC.

Lawyers flocked in numbers and trapped the victims by making them believe that the company’s coffers in the US are stashed with dollars and that they will surely get justice. Within months, thousands of victims signed the petitions proposed to them. Pocketing these, and hoping to get a 30% commission out of every settlement, lawyers flew back to file cases against the company.

Prima facie, the Bhopal gas leak was a case of negligence and in the Western world, such cases would fall under the law of torts. In India it would have been difficult to prove negligence as this branch of the law is poorly developed in the country. Besides, the Indian courts could only have dealt with UCIL, not UCC.

In any case, once the Act of 1985 was passed, the Indian government appointed three officials to deal with matters related to the tragedy on its behalf: Two IAS officers and the attorney-general of the time, K Parasaran. (The nonagenarian K Parasaran was recently in the news because he was the lawyer for the Hindu side in Ayodhya legal battle) All three officials flew to America and consulted lawyers there.

In early 1985, barely months after the tragedy, the Indian government engaged the Washington law firm Robins, Zelle, Larson, and Kaplan, a specialist in “catastrophe loss” cases, to deal with the victims’ suits on its behalf in the US. Other than this, some individual cases of victims were also filed by a few lawyers in the US. On 12 March 1985, the New York Times profiled the firm, dwelling on its selection by the Indian government. It quotes BS Sekhon, then law secretary of India as follows: ‘The persons on whose behalf claims have been filed represent only a small percentage of the victims...The government naturally has a duty to take care of the interests of its citizens.’

Indian Government Moves in US Courtroom

On 8 April 1985, the case was filed against UCC, accusing it of mishap in Judge John F Keenan’s court in Manhattan, New York. Before the judge, the Indian government presented the theory that UCIL had no control other than managing the Indian unit’s day-to-day affairs, while it is the UCC which was largely responsible for the disaster as it had failed to provide the necessary security measures against any potential hazards at the plant in Bhopal.

The government summed up its argument by saying that compensation should be wholesome, keeping the deaths, the high number of chronically-ill people, and the massive losses to property and business caused by the disaster, as also the expenses incurred by the Indian government to control its fallout.

The Case Becomes Ping Pong Ball

The UCC, sensing that it might have to part with huge sums of money, tried to distance itself and placed the burden of responsibility for the tragedy on to its Indian outfit, UCIL. The chairman, Warren Anderson, was arrested four days after the tragedy during a visit to Bhopal. Soon after, he was allowed to make a dramatic escape in a state plane, first to New Delhi and thence to the US. He said in Keenan’s court that the UCC had not defaulted on any security measure. Lapses, if any had occurred, he said, were on the part of UCIL. It was clear that he had sensed that losing this case would mean a huge dent in the company’s coffers.

Thus, UCC planned to make UCIL responsible for the disaster. This meant that if UCIL was ordered to pay compensation, its scale and scope would be decided based on Indian principles of law and the prevailing socio-economic factors. That would be far less than if the matter proceeded in US courts and they would order a recompense to the victims.

It is in this context that UCC insisted in court that it had advised UCIL to import MIC gas from it but that UCIL had emphasised on manufacturing it locally, citing foreign exchange savings.

In March 1985, UCC’s attorneys also put forward a strange theory of sabotage (by a worker) to explain the disaster. Such arguments further exacerbated the hardships of the surviving workers and employees of the plant. For instance, the workers’ union had been fighting to revive the factory to manufacture something safe, but now it had to refute the theory of sabotage. As another news report published in the American newspaper, Chicago Tribune, on 30 November 1986 says, ‘Many Indians see the company’s claim of sabotage as a tactic to delay the court case against it.’ The report cites Ram Karan Yadav, a youthful mechanical engineer at the plant—he was only 29 in 1986—and who was the general secretary of the Union Carbide Karamchari Sangh and worked at the Bhopal plant at the time the tragedy struck. ‘The idea is to reduce liability,’ Yadav told the newspaper.

Then, a few months later, UCC’s lawyers proposed a conspiracy theory that the Sikh extremist group, Black June, had engineered the gas leak. The lawyers took the plea that the group had sought revenge for Operation Blue Star, undertaken by the Indian Army in June 1984 in Golden Temple Amritsar, by targeting the Bhopal-based chemical plant.

Also, UCC filed an affidavit stating that Indian courts and not US courts had the insight and background to understand the gravity of the issue.

Indian Government Thinks Again

India said that since the parent company is responsible for the company in India (being its biggest shareholder, among other reasons) the trial should be held in US federal courts. It was argued that Indian courts are not equipped to handle such a massive disaster-related cases. Cementing its plea, Robins, Zelle, Larson & Kaplan provided a reference from American law professor, Marc Galanter, an authority on South Asian legal systems. He said that India’s civil litigation is under-developed and the country suffers from a severe shortage of judges, aside from a huge backlog of cases in Indian courts. Essentially that the Indian judiciary was not capable of dealing in tortial liability cases.

In response, UCC gave the reference of India’s eminent lawyer, Nani Palkhiwala, who presented the view that the case should be shifted to India. He spoke highly of the Indian Supreme Court, its judges, and how the apex court had upheld democratic principles, though he had earlier felt differently.

In the meanwhile, the Indian government bundled some victims and witnesses together and deposed them before Keenan. UCC proposed an out-of-court settlement of $350 million which the Indian government declined.

Eventually, on 12 May 1986, judge Keenan decided that transporting the numerous victims, the witnesses and heaps of documents to the Us would be a humongous and costly task, and also that Indian courts are competent enough to deal with the case. Hence, let the trial be run in Indian courts. He, however, emphatically made clear to the UCC that whatever judgment Indian courts deliver will be binding on it.

‘We Need $3.1 billion’—Indian Government

The court complex at Bhopal became a centre of attraction for the world. UCC and UCIL claimed sabotage, natural disaster, conspiracy and so on, but none of these theories could be proven. Rather, the Indian government demanded that the UCC must pay $3.1 billion, and it was asked by the court to provide a surety of $3 billion.

Before any settlement was arrived at, judge Mahadev Waman Dev pushed the parties for an out-of-court settlement. And, before any settlement could be arrived at, there was a furious outcry in the Indian media over letting the company’s officials go Scot-free.

The former chief justice of India, PN Bhagwati, shot off a letter to Gandhi that any settlement must be codified with UCC management’s liability fixed. In other words, let there be principal and money involved in the judgment. Bhagwati, in December 1986, had conceptualised absolute (managerial) liability while delivering his ruling in the landmark MC Mehta v Union of India case, also known as the Shriram Foods and Fertilizers case.

In that case, Bhagwati had evolved a new principle of liability, going beyond the precedents set so far by English courts. He ruled that an enterprise engaged in a hazardous activity owes an “absolute non-delegable duty” to the community. If it causes harm, it must be “absolutely liable” to compensate for it, irrespective of negligence. Now, the chief justice wanted the Bhopal case should serve as a benchmark for developed countries while operating in developing countries, and that is why he wrote to Gandhi.

Though many feared that the Bhopal case would linger on in courts for decades, yet the much wider public sentiment in India in the immediate aftermath of the disaster—and till today—is that the company officials should be booked.

Finally, in February 1989, UCC offered to pay $470 million compensation; this was broken as $2000 and $1000 for 10 years for the dependents of the dead and chronically-ill respectively and $160 million for the government agency for the rehabilitation of victims. The government agreed and the case was adjourned—though it is a matter that is still far from resolved for the victims. As the New York Times reported in February 1989: ‘Motilal Vora, the chief minister, or top elected official, of Madhya Pradesh state, of which Bhopal is the capital, said he welcomed the ruling. But his political opponents told Press Trust of India that the Government had ‘surrendered before the multinational.’ Some groups representing victims also criticized the settlement. Vibhuti Jha of the Poisonous Gas Episode Struggle Front told Reuters that ‘this settlement is a victory of Union Carbide’.’

In the entire sequence of events, it becomes apparent that the Indian government could not present the case forcefully. Even to the end of the case—and till today—it did not properly ascertain or clarify the number of casualties, the figures of the chronically ill, their asset loss and the other numerous costs associated with a disaster of this scale.

The author is a freelance business journalist. The views are personal.