Carbide Assessed $270-Million ‘Interim’ Damages

An Indian district court judge Thursday ordered Union Carbide Co. to pay about $270 million in “interim compensation and welfare measures” to victims of the 1984 poisonous gas leak at its pesticide plant in Bhopal.

Union Carbide officials immediately protested the order, calling it “awarding damages without a trial.”

Bhopal District Court Judge M. W. Deo said he ordered the substantial interim relief because talks aimed at settling the case between Union Carbide and the Indian government appeared to be “bogged down in the din of diverse loud voices.”

Attorneys for both sides said they had hoped to settle the case earlier this month, before the third anniversary of the Dec. 2, 1984, disaster that claimed at least 1,500 lives and injured 50,000 more people. Deadly methyl isocyanate gas leaked from tanks at the plant owned by Union Carbide India Ltd., an Indian subsidiary of the multinational firm. As the chemical escaped, it formed a poisonous fog that ultimately covered a slum surrounding the plant.

The Indian government, acting on behalf of all the victims, has demanded about $3 billion in damages; the Danbury, Conn.-based chemical company is believed to have offered $500 million to $600 million.

The negotiations broke down, however, over the issue of liability. Union Carbide, which claims that the deadly leak was caused by employee sabotage, has rejected any settlement that assigns fault to the corporation or to Union Carbide India Ltd.

In his 17-page order, Deo said the interim relief was not meant to prejudice any future judicial finding in the case. On several previous occasions, Union Carbide has agreed to the principle of smaller amounts of interim relief for the victims.

However, the judge strongly suggested that the company was at fault, if not for the accident itself, at least for storing large amounts of the gas used in making pesticides and fertilizer at the Bhopal plant.

“It cannot be denied that an unprecedented tragedy took place on account of a deadly leak from the UCIL’s (Union Carbide India Ltd.) hazardous activity of storing . . . deadly material, the leakage of which could not be ruled out,” the judge ruled. Citing both English law and Sanskrit scriptures, he added: “Will it not be prudent to order payment of a relative sum bearing in mind all the progress in the case so far?”

Union Carbide officials criticized the order. “It amounts to awarding damages without a trial, a practice counter to the laws of India and the democracies,” Carbide spokesman Robert M. Berzok said in New York.

“Although we are deeply concerned for the victims,” Berzok continued, “interim compensation has never been allowed where the evidence with respect to liability is in dispute. Given strong evidence that the tragedy was caused by employee sabotage . . . liability for Bhopal is indeed in serious dispute and has not been determined.”

Berzok said Deo’s order for interim relief will probably prolong the lawsuit.

Union Carbide could comply with the order or appeal it within the Indian judicial system and, perhaps, ultimately, to U.S. courts.

The case is being tried in Indian courts at the request of the American company after a U.S. District Court in New York ordered that it be moved here and that Union Carbide must abide by any decisions. Originally, the Indian government had argued that the case should be tried in the United States where, presumably, larger money damages were possible.

Deo, who was assigned to the case after another judge was removed when it was discovered that he had filed his own claim for compensation, ordered Union Carbide within two months to deposit the money with a Bhopal special justice assigned to distribute relief to the victims.

Determining the actual number of victims in the gas leak, one of the worst industrial accidents in history, has been difficult in the chaotic, contentious atmosphere in Bhopal. Some advocacy groups for the victims claim that as many as 8,000 people died and as many as 200,000 were injured.

In his order, Deo suggested that interim compensation for the victims should be “something like 200,000 rupees ($15,000) in the case of each death and 100,000 rupees ($7,500) in the case of those unable to earn a livelihood due to permanent disability.”

The figures approximately match those suggested by Union Carbide in its proposal for a final settlement.

After Deo issued his order, the Press Trust of India news agency reported from Bhopal, the judge “was greeted with great jubilation by a large crowd of mainly gas victims gathered outside the court.”