14 February 1989: Union Carbide agreed on damages worth $470 million for Bhopal disaster

The infamous Bhopal Gas Tragedy is known as India’s largest industrial disaster till date. The disaster, which led to deaths of several thousands people and crippled much more, resulted in lengthy lawsuit, with human rights groups demanding stern action. On 14 February 1989, the Supreme Court of India ordered the Union Carbide Corporation a $470 million payment for the damage caused to victims of that toxic gas leakage.

While actual figures on number of casualties and affected victims varying from one source to another, an estimated 3,500 persons were killed by the disaster in Bhopal and around 200,000 got affected. The incident happened on 2-3 December 1984. The Union Carbide India Limited plant was the source of the contamination that affected people in the surrounding area and town. More than 500,000 people got exposed to toxic methyl isocyanate gas after the leakage. Apart from those who died immediately, more casualties followed in the following weeks after the disaster.

The toxic gas stored in the Union Carbide plant’s underground storage tank began leaking at dawn. There was panic all around. While many were killed in their sleep, others started running on the streets, not understanding what was the source of the toxicity. After the tragedy, a long legal battle ensued and human rights groups and NGOs joined their hands, demanding compensation and punishment for the management of Union Carbide. It also led to a long-term legal tiff between the US-origin company and the Government of India.

While the Union Carbide said that the leakage was an act of sabotage and a disgruntled employee was the source of the mishap, it was not accepted by the Government of India. The government alleged that the plant’s safety provisions were not up to the mark and the plant also had design flaws. Amidst series of allegations and defensive statements flying between the company and the government, both sides edged towards settlement and negotiation. Warren Anderson, the then chairman of the company, was sought by the lawsuit claimants for trial in India.

As a matter of fact, the Union Carbide gas leak case shuttled between Indian and US judicial forums and between three courts for a span of four years before a conclusion was reached. The compensation battle started right after the tragedy struck Bhopal. The US legal experts flew to the stricken city and they signed up thousands of victims, including many illiterate ones, and subsequently filed cases in the US for compensation. The government of India seized the Union Carbide plant in Bhopal post the accident.

The Indian government sued Union Carbide in the Manhattan Federal District Court for a multinational liability. However, US judge John F. Keenan directed the case back to India in 1986, upholding contention of Union Carbide. Subsequently, India filed a lawsuit for compensation worth $3.3 billion in Bhopal district court. During negotiations in 1987, Union Carbide agreed to discuss with the Government of India regarding a $500 million compensation for the disaster. It would have been finalised but a series of violent protests and campaigns by representatives of victims and legal experts led to collapse of talks. The protesters demanded that the company should pay compensation worth $3 billion.

In December 1987, Union Carbide was asked to pay $270 million as interim compensation, a ruling which was voided by the MP High Court. It reduced the compensation to $190 million. This was challenged by the company in the Supreme Court. The apex court analysed the claims of the petitioners and reached the conclusion that the company should pay compensation worth $470 million to the Indian government. The verdict was delivered on 14 February 1989. The figure accepted by Union Carbide was more than double of its initial offer of $200 million made after the tragedy in 1985.

While the company accepted the Supreme Court verdict, clearly the victims and protesters were far from happy about it. The then Madhya Pradesh CM Motilal Vora reacted positively to the verdict. However, the verdict was slammed by political opponents as well as human rights groups who said in an interview to PTI that the government ''surrendered before the multinational.'' The settlement also cleared Mr. Anderson from civil suits and all pending criminal charges against him.

The gas leak survivors demanded a re-opening of the 1989 verdict, saying that the amount was far below what victims deserved. A curative petition was filed in 2010, with the claim that the 1989 settlement was based on underestimated figures on both death and injuries. The view corroborates an Amnesty International report published in 2004, which stated that the deaths after the tragedy were grossly underestimated.


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