The Supreme Court of India, in an order dated 14 March 2023, unanimously dismissed the Union of India's curative petition seeking enhanced compensation from Union Carbide Corporation for victims of the 1984 Bhopal gas tragedy. A five-judge Bench comprising Justice Sanjay Kishan Kaul, Justice Sanjiv Khanna, Justice Abhay S. Oka, Justice Vikram Nath, and Justice J.K. Maheshwari held that there was no justification for reopening the 1989 settlement nearly three decades after its execution.
Background
The Bhopal gas tragedy of December 1984, caused by a leak of methyl isocyanate gas from the Union Carbide Corporation plant in Bhopal, remains one of the worst industrial disasters in history. In 1989, the Supreme Court approved a settlement of USD 470 million between the Union of India and Union Carbide Corporation as full and final compensation for all claims arising from the disaster.
In 2010, the Union of India filed a curative petition seeking additional compensation of over USD 1 billion, arguing that the original settlement was inadequate given the revised mortality figures and the long-term health consequences that had emerged since 1989. The petition contended that the settlement amount was arrived at on the basis of significantly lower casualty and injury estimates than what subsequently materialised.
Key Holdings
The five-judge Bench rejected the curative petition on the following grounds:
Adequacy of original settlement: The Court observed that the 1989 settlement amount, when considered against the actual disbursements made, showed a surplus. The compensation framework established under the settlement had been sufficient to address the claims that were filed and adjudicated.
Finality of settlements: Reopening a settlement that had been executed and substantially implemented over three decades would undermine the principle of finality in litigation. The Court noted that such reopening could create far-reaching consequences for the certainty of court-sanctioned settlements.
Evidentiary gap: The Court found that the Union of India had not adequately demonstrated that the revised casualty figures warranted the quantum of additional compensation sought, particularly given the passage of time and the difficulties in establishing causation for long-term health effects.
Surplus in settlement fund: The Bench noted that a portion of the original settlement fund remained undisbursed even after processing all eligible claims, which weakened the argument that the original settlement was inadequate.
Implications for Practitioners
This judgment carries significant weight for practitioners handling mass tort and industrial disaster litigation. The Court's emphasis on finality of settlement suggests that curative petitions seeking to reopen long-executed settlements face an exceptionally high threshold, even in cases involving catastrophic harm.
For practitioners representing claimants in mass disaster cases, the decision underscores the critical importance of accurate casualty assessment at the time of settlement negotiation. The difficulty the Union of India faced in establishing that revised figures warranted additional compensation decades later serves as a cautionary precedent.
The ruling also has implications for the intersection of sovereign parens patriae litigation and corporate liability. The fact that the Union of India itself had been a party to the original settlement and had administered the compensation scheme for over thirty years was a significant factor in the Court's reluctance to reopen the matter. Future litigation involving state-negotiated settlements on behalf of disaster victims will need to account for this precedent.