[UNION CARBIDE CORPORATION  VS UNION OF INDIA 4^TH MAY 1989 Bhopal gas tragedy];

INTRODUCTION

The Bhopal Gas Leak Tragedy that occurred at midnight of

2nd  December, 1984, by the escape of deadly chemical  fumes

from the appellant’s factory was a great industrial disaster

and  it took an immediate toil of 2600 human lives and   left

tens of thousands of innocent citizens of Bhopal  physically

affected  in various ways. As per the figures  furnished  by

the  Union of India in its amended plaint a total number  of

2,660  persons          suffered agonising and     excruciating  deaths

between 30,000 to 40,000 persons sustained serious  injuries

as a result of the said disaster.

    Legal  proceedings for the recovery of compensation          for

the victims were initiated against the multi-national compa-

ny  first  in the U.S. Courts and later in Distt.  Court  at

Bhopal in Suit No. 113 of 1986. The present appeals  concern

with  the order dated 4th April, 1988 passed by  the  Madhya

Pradesh     High  Court whereby it modified  the  interlocutory

order dated 17.12.1987 made by the Distt. Judge and  granted

interim       compensation  of Rs.250 crores. Both the  Union  of

India  and  the Union Carbide Corporation have appealed  to

this Court against that order.

    The         Court          by its order dated the 14th  February,          1989

made in these appeals directed that there shall be an  over-

all  settlement          of the claims in the suit for       470  million

U.S.  Dollars  and  termination of all      civil  and  criminal

proceedings. On May 4, 1989 the Court pronounced its reasons

for its aforesaid order dated 14.2.89thus:

    The Statement of the reasons is not made with any  sense

of  finality  as to the infallibility of the  decision;          but

with  an open mind to be able to appreciate any tenable      and

compelling legal or factual infirmities that may be  brought

out, calling for remedy in review under Article 137 of

the Constitution. [132C-D]

129

    The basic consideration motivating the conclusion of the

settlement  was the compelling need for urgent relief.          Con-

siderations  of excellence and niceties of legal  principles

were greatly over-shadowed by the pressing problems of          very

survival for a large number of victims. [133A, C]

    The         instant  case is one where damages  are  sought  on

behalf of the victims of a mass disaster, and having  regard

to  the        complexities and the legal question  involved,   any

person          with  an  unbiased vision would not  miss  the          time

consuming  prospect for the course of the litigation in      its

sojourn through the various courts, both in India and  later

in  United  States. This Court considered  it  a  compelling

duty.  both judicial and humane, to secure immediate  relief

to  the victims. In doing so, the Court did not    enter          upon

any  forbidden ground. What this Court did was in  continua-

tion of what had already been initiated. [133E-F, H; 134A]

    The         range         of  choice for the Court in  regard  to  the

figures       was, therefore, between the maximum of 426  million

U.S. Dollars offered by Shri Nariman and the minimum of      500

million       U.S.  Dollars suggested by  the  Attorney  General.

[134F-G]

    Having  regard  to all the circumstances  including   the

prospect of delays inherent in the judicial process in India

and thereafter in the matter of domestication of the  decree

in the United States for the purpose of execution, the Court

directed that 470 million U.S. Dollars which upon  immediate

payment and with interest over a reasonable period,  pending

actual      distribution amongst the claimants, would  aggregate

very nearly to 500 million U.S. Dollars or its rupee equiva-

lent  of  approximately          Rs.750 crores          which  the  Attorney

General had suggested. be made the basis of the          Settlement.

[134G-H; 135A-B]

    The Settlement proposals were considered on the premises

that the Government had the exclusive statutory authority to

represent  and          act  on behalf of the  victims       and  neither

counsel      had any reservation as to this. The order was          also

made  on  the  premises that the Bhopal Gas  Leak  Disaster

(Registration and Processing of Claims) Act 1985 was a valid

law. [135B-C]

    There might be different opinions on the  interpretation

of  laws  or on questions of policy or even on what  may  be

considered  wise or unwise; but when one speaks        of  justice

and truth, these words mean the same thing to all men  whose

judgment is uncommitted. [140B-C]

The compulsions of the need for immediate relief to tens of

130

thousands  of  suffering victims could not wait     till  these

questions, vital though they be, are resolved in due  course

of judicial proceedings. [142D-E]

    A  settlement  has been recorded upon  material  and  in

circumstances  which persuaded the Court that it was a          just

settlement. This is not to say that this Court will shut out

any  important          material and  any  compelling  circumstances

which  might impose a duty on it to exercise the  powers  of

review.       Like  all other human institutions, this  Court  is

human and fallible. What appears to the Court to be just and

reasonable in that particular context and setting, need          not

necessarily appear to others in the same day. Which view  is

right, in the ultimate analysis, is to be judged by what  it

does  to  relieve the undeserved suffering of  thousands  of

innocent citizens of this country. [142F-G]

    Decisions  of  courts cannot be reacted  or          altered  or

determined by agitational pressures. If a decision is wrong,

the process of correction must be in a manner recognised  by

law.  All  of those who invoke the corrective  processes  in

accordance  with  law shall be heard and the court  will  do

what the law and the course of justice requires. The  matter

concerns  the  interests of a large number of victims  of  a

mass  disaster. The Court directed the settlement    with the

earnest hope that it would do hem good and bring them  imme-

diate   relief,          for, tomorrow might be too  ate for  many  of

them. But the case equally concerns the credibility of,          and

the public confidence in, the judicial process. [143B, D-E]

Those who trust this Court will not have cause for despair.

JUDGEMENT

The following Order of the Court was delivered: ORDER The Bhopal Gas Leak tragedy that occurred at midnight on 2nd December, 1984, by the escape of deadly chemical fumes from the appellant’s pesticide-factory was a horrendous industrial mass disaster, unparalleled in its magnitude and devastation and remains a ghastly monument to the de-huma- nising influence of inherently dangerous technologies. The tragedy took an immediate toll of 2,660 innocent human lives and left tens of thousands of innocent citizens of Bhopal physically impaired or affected in various degrees. What added grim poignance to the tragedy was that the industrial-enterprise was using Methyl Iso-cyanate, a lethal toxic poison, whose potentiality for destruction of life and biotic-communities was, apparently, matched only by the lack of a pre-package of relief procedures for management of any accident based on adequate scientific knowledge as to the ameliorative medical procedures for immediate neutralisation of its effects.

It is unnecessary for the present purpose to refer, in any detail, to the somewhat meandering course of the legal proceedings for the recovery of compensation initiated against the multi-national company initially in the Courts in the United States of America and later in the District Court at Bhopal in Suit No. 113 of 1986. It would suffice to refer to the order dated 4 April, 1988 of the High Court of Madhya Pradesh which, in modification of the interlocutory- order dated 17 December, 1987 made by the learned District Judge, granted an interim compensation of Rs.250 crores. Both the Union of India and the Union Carbide Corporation appealed against that order.

This Court by its order dated 14 February, 1989 made in those appeals directed that there be an overall settlement of the claims in the suit, for 470 million US dollars and termination of all civil and criminal proceedings. The opening words of the order said:

“Having given our careful considera- tion for these several days to the facts and circumstances of the case placed before us by the parties in these proceedings, including the pleadings of the parties, the mass of data placed before us, the material relating to the proceedings in the Courts in the United States of America, the offers and counter-offers made between the parties at different stages during the various proceedings, as well as the complex issues of law and fact raised before us and the submission made thereon, and in particular the enormity of human suffering occasioned by the Bhopal Gas disaster and the pressing urgency to provide immediate and substantial relief to victims of the disaster, we are of opinion that the case is pre-emi- nently fit for an overall settlement between the parties covering all litigations, claims, rights and liabilities related to and arising out of the disaster ….. “

(Emphasis Supplied) It appears to us that the reasons that persuaded this Court to make the order for settlement should be set-out, so that those who have sought a review might be able effec- tively to assist the Court in satisfactorily dealing with the prayer for a review. The statement of the reasons is not made with any sense of finality as to the infallibility of the decision; but with an open mind to be able to appreciate any tenable and compelling legal or factual infirmities that may be brought out, calling for remedy in Review under Arti- cle 137 of the Constitution.

The points on which we propose to set-out brief reasons are the following:

(a) How did this Court arrive at the sum of 470 million US dollars for an over-all settle- ment?

(b) Why did the Court consider this sum of 470 million US dollars as ‘just, equitable and reasonable’?

(c) Why did the Court not pronounce on certain important legal questions of far reaching importance said to arise in the appeals as to the principles of liability of monolithic, economically entrenched multi-national compa- nies operating with inherently dangerous technologies in the developing countries of the third world–questions said to be of great contemporary relevance to the democracies of the third-world?

There is yet another aspect of the Review pertaining to the part of the settlement which terminated the criminal proceedings. The questions raised on the point in the Re- view-petitions, prima facie, merit consideration and we should, therefore, abstain from saying anything which might tend to pre-judge this issue one way or the other.

The basic consideration motivating the conclusion of the settlement was the compelling need for urgent relief. The suffering of the victims has been intense and unrelieved. Thousands of persons who pursued their own occupations for an humble and honest living have been rendered destitute by this ghastly disaster. Even after four years of litigation, basic questions of the fundamentals of the law as to liabil- ity of the Union Carbide Corporation and the quantum of damages are yet being debated. These, of course, are impor- tant issues which need to be decided. But, when thousands of innocent citizens were in near destitute conditions, without adequate subsistential needs of food and medicine and with every coming morrow haunted by the spectre of death and continued agony, it would be heartless abstention, if the possibilities of immediate sources of relief were not ex- plored. Considerations of excellence and niceties of legal principles were greatly over-shadowed by the pressing prob- lems of very survival for a large number of victims. The Law’s delays are, indeed, proverbial. It has been the unfortunate bane of the judicial process that even ordinary cases, where evidence consists of a few documents and the oral testimony of a few witnesses, require some years to realise the fruits of litigation. This is so even in cases of great and unquestionable urgency such as fatal accident actions brought by the dependents. These are hard realities. The present case is one where damages are sought on behalf of the victims of a mass disaster and, having regard to the complexities and the legal questions involved, any person with an unbiased vision would not miss the time consuming prospect for the course of the litigation in its sojourn through the various courts, both in India and later in United States.

It is indeed a matter for national introspection that public response to this great tragedy which affected a large number of poor and helpless persons limited itself to the expression of understandable anger against the industrial enterprise but did not channel itself in any effort to put together a public supported relief fund so that the victims were not left in distress, till the final decision in the litigation. It is well known that during the recent drought in Gujarat, the devoted efforts of public spirited persons mitigated, in great measure, the loss of cattle-wealth in the near famine conditions that prevailed. This Court, considered it a compelling duty, both judi- cial and humane, to secure immediate relief to the victims. In doing so, the Court did not enter upon any forbidden ground. Indeed, efforts had earlier been made in this direction by Judge Keenan in the United States and by the learned District Judge at Bhopal. What this Court did was in continuation of what had already been initiated. Even at the opening of the arguments in the appeals, the Court had suggested to learned counsel on both sides to reach a just and fair settlement. Again, when counsel met for re-scheduling of the hearings the suggestion was reiterated. The response of learned counsel on both sides was positive in attempting a settlement, but they expressed a certain degree of uneasiness and scepticism at the prospects of success in view of their past experience of such negotiations when, as they stated, there had been uninformed and even irresponsible criticism of the attempts at settlement. The learned Attorney General submitted that even the most bona fide, sincere and devoted efforts at settlement were likely to come in for motivated criticism. The Court asked learned counsel to make available the particulars of offers and counter offers made on previous occasions for a mutual settlement. Learned counsel for both parties furnished particulars of the earlier offers made for an overall settlement and what had been considered as a reasonable basis in that behalf. The progress made by previ- ous negotiations was graphically indicated and these docu- ments form part of the record. Shri Nariman stated that his client would stand by its earlier offer of Three Hundred and Fifty Million US dollars and also submitted that his client had also offered to add appropriate interest, at the rates prevailing in the U.S.A., to the sum of 350 million US dollars which raised the figure to 426 million US dollars. Shri Nariman stated that his client was of the view that amount was the highest it could go upto. In regard to this offer of 426 million US dollars the learned Attorney-General submitted that he could not accept this offer. He submitted that any sum less than 500 million US dollars would not be reasonable. Learned counsel for both parties stated that they would leave it to the Court to decide what should be the figure of compensation. The range of choice for the Court in regard to the figure was, therefore, between the maximum of 426 million US dollars offered by Shri Nariman and the minimum of 500 million US dollars suggested by the learned Attorney General. In these circumstances, the Court examined the prima facie material as to the basis of quantification of a sum which, having regard to all the circumstances including the prospect of delays inherent in the judicial-process in India and thereafter in the matter of domestication of the decree in the United States for the purpose of execution and di- rected that 470 million US dollars, which upon immediate payment and with interest over a reasonable period, pending actual distribution amongst the claimants, would aggregate very nearly to 500 million