http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5  

PETITIONER: UNION CARBIDE CORPORATION

       Vs.

RESPONDENT: UNION OF INDIA AND OTHERS, ETC.

DATE OF JUDGMENT14/02/1989

BENCH: PATHAK, R.S. (CJ) BENCH: PATHAK, R.S. (CJ) VENKATARAMIAH, E.S. (J) MISRA RANGNATH VENKATACHALLIAH, M.N. (J) OJHA, N.D. (J)

CITATION:  JT 1989 (1)   296        1989 SCALE  (1)380

ACT:

HEADNOTE: Having  carefully considered the facts and circumstances  of the  case, the mass of data placed before it,  the  material relating to the proceedings in the Courts in the U.S.A., the offers  and counter-offers made between the parties at  dif- ferent  stages during the various proceedings,  the  complex issues of law and fact raised before it and the  submissions made  thereon,  and  in particular, the  enormity  of  human suffering occasioned by the Bhopal Gas Leak Disaster and the pressing urgency to provide immediate and substantial relief to  victims of the disaster, the Court was of  opinion  that the  case  was  fit for an overall  settlement  between  the parties covering all litigations, claims, rights and liabil- ities  related to and arising out of the Disaster  and  HELD that  it  was  just, equitable and reasonable  to  order  as follows:               (1) That the Union Carbide Corporation  shall,               on  or  before 23.3.1989, pay a  sum  of  U.S.               Dollars 470 millions to the Union of India  as               claimant and for the benefit of all victims of               the Bhopal Gas Leak Disaster under the  Bhopal               Gas Leak Disaster (Registration and processing               of  claims)  Scheme  1985 and  not  as  fines,               penalties or punitive damages, in full settle-               ment  of  all claims, rights  and  liabilities               related  to and arising out of the Bhopal  Gas               Leak Disaster; [733F-G]               (2) That all civil proceedings related to  and               arising out of the Disaster shall stand trans-               ferred to this Court and shall stand concluded               in  terms of the settlement, and all  criminal               proceedings related to and arising out of  the               disaster shall stand quashed wherever pending;               [732F-G]               (3) That upon full payment of the sum referred               to above:               (a) The Union of India and the State of Madhya               Pradesh  shall  take all steps  which  may  in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5  

             future become necessary in order to  implement               and  give effect to this order, including  but               not                731               limited to ensuring, that any suits, claims or               civil  or  criminal complaints  which  may  be               filed  in  future  against  any   Corporation,               Company  or person referred to in the  Settle-               ment  are defended by them and disposed of  in               terms of this order; [734 A-B]               (b) Any such suits, claims or civil or  crimi-               nal  proceedings filed or to be  filed  before               any court or authority are hereby enjoined and               shall not be proceeded with before such  court               or authority except for dismissal or  quashing               in terms of this order; and [734C]               (4) That upon full payment in accordance  with               the directions issued by the Court,               (a)  The  undertaking given by  Union  Carbide               Corporation   pursuant  to  the  order   dated               30.11.1986 in the District Court, Bhopal shall               stand  discharged,  and all orders  passed  in               Suit  No.  1113  of 1986  and/or  in  revision               therefrom shall also stand discharged; [734D]               (b) Any action for contempt initiated  against               counsel  or parties relating to this case  and               arising out of proceedings in the courts below               shall be treated as dropped. [734E]

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 3  18788 of 1988.     From the Judgment and Order dated 4.4.1983 of the Madhya Pradesh High Court in C.R. No. 26 of 1988. AND VICE VERSA (WITH S.L.P. (CIVIL) No. 13080 of 1988).     K.  Parasaran, Attorney General, F.S. Nariman,  Anil  B. Divan,  B.R. Zaiwala, Gopal Subramaniam, V.P.  Sarthi,  J.B. Dadachanji, Vijay Gupta, Ms. Anjali K. Verma, Sumeet Kachwa- ha,  Ashok Sagar, D.N. Misra, S.C. Sharma, O.C.  Mathur,  A. Subhashini,  S.K. Gambhir, D .S. Shastri and Arun Madan  for the appearing parties.     Vibhuri  Jha,  Anil  K. Nauriya,  Ms..Aruna  Mathur,  A. Mariarputham and C.L. Sahu for the Interveners. 732 The following Order of the Court was delivered: ORDER     Having given our careful consideration 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 submissions 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-eminently fit  for an overall settlement between the parties  covering all  litigations, claims, rights and liabilities related  to and arising out of the disaster and we hold it just, equita-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5  

ble and reasonable to pass the following order: We order:                  (1) The Union Carbide Corporation shall pay               a  sum  of  U.S. Dollars  470  millions  (Four               hundred and seventy Millions) to the Union  of               India in full settlement of all claims, rights               and liabilities related to and arising out  of               the Bhopal Gas disaster.                  (2) The aforesaid sum shall be paid by  the               Union  Carbide  Corporation to  the  Union  of               India on or before 31 March, 1989.                  (3)  To  enable  the  effectuation  of  the               settlement,  all civil proceedings related  to               and  arising  out of the Bhopal  Gas  disaster               shall  hereby stand transferred to this  Court               and  shall  stand concluded in  terms  of  the               settlement,   and  all  criminal   proceedings               related  to  and arising out of  the  disaster               shall  stand  quashed wherever  these  may  be               pending. A memorandum of settlement shall be filed before us tomorrow setting  forth all the details of the settlement  to  enable consequential directions, if any, to issue.     We  may  record that we are deeply indebted  to  learned counsel for the parties for the dedicated assistance and the sincere cooperation  733 they  have offered the Court during the hearing of the  case and  for  the  manifest reasonableness they  have  shown  in accepting the terms of settlement suggested by this Court.     Having heard learned counsel for the parties, and having taken into account the written memorandum filed by them,  we make  the  following  order further to our  order  dated  14 February, 1989 which shall be read with and subject to  this order:                  1.  Union  Carbide  India  Ltd.,  which  is               already a party in numerous suits filed in the               District Court at Bhopal, and which have  been               stayed by an order dated 31 December, 1985  of               the  District  Court, Bhopal, is joined  as  a               necessary  party  in order to  effectuate  the               terms  and  conditions of our order  dated  14               February, 1989 as supplemented by this order.                 2. Pursuant to the order passed on 14 Febru-               ary 1989 the payment of the sum of U.S. $  470               Millions  (four Hundred and Seventy  millions)               directed by the Court to be paid on or  before               31  March,  1989 will be made  in  the  manner               following:                   (a)  A  sum of U.S. $ 425  Millions  (four               Hundred  and  Twenty five Millions)  shall  be               paid  on  or before 23 March,  1989  by  Union               Carbide  Corporation  to the Union  of  India,               less  U.S.  $ 5 Millions already paid  by  the               Union  Carbide  Corporation  pursuant  to  the               order  dated 7 June, 1985 of Judge  Keenan  in               the  court  proceedings taken  in  the  United               States of America.                   (b)  Union Carbide India Ltd. will pay  on               or before 23 March, 1989 to the Union of India               the  rupee  equivalent of U.S. $  45  Millions               (forty  five  Millions) at the  exchange  rate               prevailing at the date of payment.                   (c)  The aforesaid payments shall be  made               to the Union of India as claimant and for  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5  

             benefit  of  all  victims of  the  Bhopal  Gas               Disaster  under the Bhopal Gas  Leak  Disaster               (Registration   and  Processing  of   Claims),               Scheme, 1985, and not as fines, penalties,  or               punitive damages.   3. Upon full payment of the sum referred to in paragraph 2 above:  734                    (a)  The Union of India and the State  of               Madhya Pradesh shall take all steps which  may               in future become necessary in order to  imple-               ment  and give effect to this order  including               but  not limited to ensuring that  any  suits,               claims  or civil or criminal complaints  which               may  be filed in future against  any  Corpora-               tion,  Company or person referred to  in  this               settlement  are defended by them and  disposal               of in terms of this order.                   (b)  Any  such suits, claims or  civil  or               criminal  proceedings  filed or  to  be  filed               before  any  court  or  authority  are  hereby               enjoined  and  shall  not  be  proceeded  with               before  such  court or  authority  except  for               dismissal or quashing in terms of this order. 4.  Upon full payment in accordance with the Court’s  direc- tions:                   (a) The undertaking given by Union Carbide               Corporation  pursuant  to the order  dated  30               November,  1986 in the District Court,  Bhopal               shall  stand discharged, and all order  passed               in  Suit No. 1113 of 1986 and/or  in  revision               therefrom shall also stand discharged.                   (b)  Any  action  for  contempt  initiated               against  counsel or parties relating  to  this               case  and  arising out of proceedings  in  the               courts below shall be treated as dropped.   5.  The amounts payable to the Union of India under  these orders of the Court shall be deposited to the credit of  the Registrar  of  this Court in a Bank under directions  to  be taken from this Court. This order will be sufficient authority for the Registrar of the  Supreme  Court to have the amount  transferred  to  his credit  which is lying unutilized with the Indian Red  Cross Society pursuant to the direction from the International Red Cross Society.   6.  The terms of settlement filed by learned  counsel  for the parties today are taken on record and shall form part of our order and the record.     The case will be posted for reporting compliance on  the first Tuesday of April, 1989.  735 TERMS OF SETTLEMENT CONSEQUENTIAL TO THE DIRECTIONS      AND ORDERS PASSED BY THIS HON’BLE COURT     1. The parties acknowledge that the order dated February 14,  1989  as supplemented by the order dated  February  15, 1989 disposes of in its entirety all proceedings in Suit No. 1113 of 1986. This settlement shall finally dispose. of  all past, present and future claims, causes of action and  civil and criminal proceedings (of any nature whatsoever  wherever pending)  by all Indian citizens and all public and  private entities  with  respect  to all  past,  present  and  future deaths,  personal  injuries, health  effects,  compensation, losses,  damages  and civil and criminal complaints  of  any nature whatsoever against UCC, Union Carbide India  Limited, Union  Carbide  Eastern, and all of their  subsidiaries  and

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5  

affiliates  as  well  as each of their  present  and  former directors,  officers,  employees,  agents   representatives, attorneys advocates and solicitors arising out of,  relating to or connected with the Bhopal gas leak disaster, including past,  present and future claims, causes of action and  pro- ceedings  against each other. All such claims and causes  of action  whether within or outside India of Indian  citizens, public or private entities are hereby extinguished,  includ- ing  without  limitation each of the claims filed or  to  be filed  under the Bhopal Gas Leak Disaster (Registration  and Processing  of Claims) Scheme 1985, and all such civil  pro- ceedings  in India are hereby transferred to this court  and are dismissed with prejudice, and all such criminal proceed- ings  including contempt proceedings stand quashed  and  ac- cused deemed to be acquitted.     2.  Upon  full payment in accordance  with  the  Court’s directions  the  undertaking given by UCC  pursuant  to  the order dated November 30, 1986 in the District Court,  Bhopal stands discharged, and all orders passed in Suit No. 1113 of 1986  and  or  in any Revision therefrom,  also  stand  dis- charged. Sd/- J.B. Dadachanji         Sd/- A. Subhashini 15.2.1989 for UCC and UCIL Ltd.            Advocate on Record for 15.2. 1989                       Union of India. 736