Union Carbide OKs Shifting Bhopal Suits to India

Union Carbide on Thursday accepted the conditions imposed by a federal judge to transfer to Indian courts billions of dollars in lawsuits against the company stemming from the 1984 Bhopal gas disaster.

But the company said it reserved the right to appeal to U.S. federal courts certain procedural matters, as well as any final judgment rendered against it by courts in India.

That means in all likelihood that U.S. courts have not seen the end of the complicated litigation arising from the accident, in which more than 2,000 people were killed and about 200,000 injured by toxic gas leaking from a chemical plant partially owned by Union Carbide.

Michael V. Ciresi, the Indian government’s chief U.S. lawyer on the case, said he is certain that the company will challenge any Indian judgment in American courts. “I would predict that, assuming we get a judgment against their assets, they would attempt to fight it again,” he said.

In a prepared statement, the company said it is “pleased that the court is sending the case to India, where it belongs.” But Bud G. Holman, its chief litigator on the Bhopal cases, confirmed that under the terms of the transfer, the company feels that “U.S. courts will have to review any (final) judgment in India.”

Thursday was Carbide’s deadline to respond to four conditions imposed by U.S. District Judge John F. Keenan when he ruled May 12 that the 145 lawsuits filed in U.S. courts on behalf of thousands of Bhopal claimants should be dismissed and the cases heard in India.

The conditions required the company to voluntarily submit to the jurisdiction of the Indian courts, to waive any defense based on the statute of limitations, to satisfy any judgment against it rendered by an Indian court complying with “minimal” due process and to subject itself to pretrial fact-finding, or discovery, under U.S. federal rules, which are more far-reaching than those of India. Union Carbide said Thursday that it has agreed to all four conditions “while preserving the right of appeal.”

The transfer to Indian courts under Keenan’s order leaves unresolved several procedural questions, some of which may yet be raised in American courts.

Lawyers on both sides say that one critical issue is how to resolve the inevitable disputes that will arise during discovery, since, although Union Carbide is bound to submit to American-style discovery, the process will take place before Indian judges. One possible solution, legal authorities close to the case said, is to place discovery under the supervision of a “special master,” perhaps a retired U.S. judge.

Another issue was Union Carbide’s insistence that an Indian court verdict be tested against the standard of “minimal due process”--the American rules that govern the fairness of U.S. trial proceedings.

Company Satisfied

“We had a long fight about that,” Holman, the company’s lawyer, said Thursday. “We believe the Indian court system is a good system with independent judges, but this is a case where the plaintiff (the Indian government) is a sovereign and also a defendant. I’ve never heard of that.”

He said the company is satisfied that its right to ask U.S. courts to review any final judgment on due process grounds will protect it.

Ciresi, for his part, dismissed Holman’s concerns. “They’re going to get minimal due process over there and they know that,” he said.

Keenan assumed jurisdiction over the Bhopal litigation in February, 1985, when the 145 cases filed in American courts were consolidated into a single lawsuit in his New York City courtroom.

At the time, the litigation was in near-total confusion. Thousands of American lawyers had signed up individual clients among the destitute, illiterate and non-English-speaking victims of the disaster. Meanwhile, the Indian government, which Carbide was partially blaming for the accident, had passed a law giving itself the exclusive authority to represent the victims in court.

Keenan appointed a panel of three lawyers to represent all of the plaintiffs: Stanley M. Chesley and F. Lee Bailey from among the private litigants, and Ciresi, the Indian government’s counsel.

The jurist’s first task was to rule on Carbide’s contention that the only proper forum to hear the cases was the Indian judicial system. That was challenged by the private lawyers and by the government of India, which argued that American courts outstripped India’s in their efficiency and ability to handle complex litigation. Many lawyers also recognized that the potential for a massive damage judgment against the company was far greater in American courts because of the higher standard of living and traditionally more generous juries of this country.

Settlement Urged

Keenan encouraged the parties to strive for an out-of-court settlement. In April, the company and the private lawyers said they had reached a tentative $350-million settlement, but Indian officials rejected it.

Finally, Keenan ruled May 12 that India’s judiciary was more than up to the task of handling the case and observed that with most of the evidence and witnesses located in India, hearing the cases here would be close to impossible.