International Business And Enterprise For Union Carbide India Ltd.

Discuss about the International Business and Enterprise for Union Carbide India Ltd.

The Bhopal Case Tragedy happened in the early hours of 4 December 1984. This is regarded as one of the most horrible industrial disaster in history. Methyl isocynate, a highly contaminated chemical, came out from the plant of “Union Carbide India Limited (UCL)” plant located in Bhopal (Dhara & Acquilla, 2013). Many people died a dreadful death due to the leakage of the toxic chemical from the plant while many others crippled for their life. Some of the survivors from the disaster are still suffering for their dignity, respect, lives, compensation and rehabilitation. There was hesitation about the effects of the exposure of the gas on the victims. Apart from loss of lives and other effects of the Bhopal tragedy, include loss of cattle, vegetation, partial or full human disablement. The disaster caused impoverishment and disruption of the community (Singh & Bhadoria, 2013).

The incident raised many issues relating to the adequacy of present laws in Bhopal for multinational companies operating in India. The incident also raised questions related to the unregulated industrialisation in India, insufficient policies of licensing and wrong industrial planning. Additionally, the issue has also raised questions pertaining to the tasks of a parent corporation for the acts of its supplementary company and the compensation and liabilities of the “parent company” for the actions of the “subsidiary company (Samarth et al., 2013).”

The Bhopal Gas Tragedy exposed the system of security in India. In the case of Bhopal, the feature of protection was overlooked at the time of giving license for position of the plant in the year 1969.  At the time of granting the licence to the company, dangers were associated with the inhabitants of the area and shifting of the inhabitants were advised which was completely ignored. It has been alleged that UCL maintained double standards regarding the safety methods of the Bhopal Plant. “Computerised pressure”, “temperature-sensing system” and other safety measures were completely ignored in the Bhopal plant (Patel, 2015). Preventive maintenance and safety mechanisms, ideally, should be the first to be curtailed when the UCL suffered monetary losses. However, the factors related to safety were completely ignored for the sake of making profit. Moreover, the Government of India and Madhya Pradesh completely ignored the preventive steps that they should have ideally taken while granting license for the manufacturing of the highly toxic pesticides. This tragic incident raised questions relating to the negligence of the state and central government as well (Odysseos, 2015).

Legal Questions and Claims

The legal question after the catastrophe took place was the “right to recover claims” for the sufferers. Since the incident took place in a company that was a supplementary of the USA based company, it was difficult for the company to file suits for claim. Thus, on 20^{th February} 1985, the President of India passed the “Bhopal Gas Leak Disaster (Processing of Claims) Ordinance”, to give exclusive rights to the administration to represent the sufferers of the Bhopal tragedy. The Ordinance was replaced by the “Bhopal Gas Leak Disaster (Processing of Claims) Act, on 29 March 1985.”  Since the Bhopal Gas tragedy involved many victims, it was not easy for each one of them to file individual claim of the tragedy (Robinson & Bell, 2013). With the establishment of this Act, the central government was to adopt the role of “parens patraie.”  This Act aimed at ensuring that the claims arising out of the Bhopal Gas Tragedy were dealt with effectively, promptly and equitably and to the best benefit of the claimants. The Act gives authority to the central government as well as exclusive right to represent and act in accordance with similar claims arising out of one situation. Section 4 of the Act, does not give absolute authority to the applicants the right to be characterized by the lawful practitioner (Mittal, 2015). Restrictions are imposed on the Central Government for representation of the people having similar claims out of the Bhopal Gas Tragedy. The petitioner challenged the validity of the Act and the Supreme Court declared the Act as valid. The Supreme Court held that taking over the claims of sufferers by the Government was not unlawful. In the opinion of the Supreme Court, the victims of the Bhopal gas tragedy could not match with the standard of the multinational companies nor will they be in a position to take care of their own interest in an effective manner. Moreover, the Supreme Court also held that the shares owned by the Central Government were only factual, as they did not really own any share in the UCL because the organisations were statutorily independent (Bourdieu, 2014).

The claims that were presented by Mr. Sahu are as follows:

Infringement of “Article 14 of the Constitution of India” and the petitioner questioned about the validity of “Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985” in relation to this Article (Patel & Petlakh, 2014).

Arguments of Union of India

The applicability of the doctrine of “parens patriae” was also questioned, as it imposed no limitations on the sovereign authority of the Central Government (Balganesh, 2014).

The central government itself held shares in the company thus, according to the petitioner, central government cannot act as a representative against themselves as they were joint tort feasor in the Bhopal Gas tragedy (Dhara & Acquilla, 2013).

The power conferred on the central government for representing victims having similar claims was held to be inconsistent with the Code of Civil Procedure, 1908.

The petitioner held that the Act was violative of principles of natural justice in administrative law.

The petitioner requested the Hon’ble Judge to remove the mischief from the Act by applying the principles of statutory interpretation (Jos, 2016).

As per UCL the suit should be dismissed by applying the doctrine of “non conveniens”

The Supreme Court opined that the Act satisfied the conditions that were laid in “Article 14 of the Constitution of India.” According to the court, the sufferers could be termed as a category belonging to a separate class and having the authority of speedy settlement of their claims. Moreover, in the opinion of the Court, the Act entitled the victims to be heard on any settlement that is proposed in nature (Dhara & Acquilla, 2013). This was a fair procedure and such a process should be followed in a “mass tort action.” Thus, the decision of the Act to represent the victims through mass representation is not unfair and disadvantageous (Castleman, 2016).

According to the Bhopal Gas Disaster Act, 1985, the “Union of India” filed a protest against the UCL in the district Court of the United States for compensation of three billion dollars. The Government of India favored the US forum for representation of the suit, as it would lead to fair and speedy trial (Dhara & Acquilla, 2013). However, the UCL opposed the petition by applying the doctrine of forum non-conveniens. The UCC supplicated that the case to be heard in India as the forum of the United States is not a sufficient forum and an inconvenient forum for trial. The UCL pleaded this on the grounds of public interest such as Indian public to be able to view the trail; Indian courts will be able to apply Indian law better as compared to United States district forum. One of the major arguments of the UCC in this case was that this trial would cause harm to the citizens of the United States (Mac Sheoin, 2015).

The Union of India submitted many points in argument to the motion of the UCL to dismiss the case on the ground that the Act was unconstitutional and on the ground of forum non-conveniens.

The Union of India argued that the Indian forum does not provide sufficient alternative in which the proceedings may be resolved easily. It argued that the Indian court system lacked in procedural certainty and as far as this case was concerned, the Indian court system lacked the capability of handling the situation in an effective manner. Thus, the Union of India wanted the case to be tried in the US forum (Mac Sheoin, 2015).

The Union of India held that the UCL is a company that is based entirely on the operations of the United States such as location of the plant, storage and production of the plant and additional safety operational systems.

In the opinion of the Union of India, the most relevant evidence against the UCL shall be available in the United States and the evidence pertaining to damages and the liability of the company can be also be made available in the United States, as large part of its operational control was maintained in the United States (Dhara & Acquilla, 2013).

However, the Court dismissed the arguments of Union of India in relation to the doctrine of the forum non-coneviens. The Court held that India was a sufficient and adequate forum and hence, the case will be decided in India. The Court relied on the Gulf Oil Corp v. Gilbert for rejecting the arguments of the Union of India (Mac Sheoin, 2015).

The Supreme Court of India also relied on the decision of C Mehta v. Union of India to decide the tortuous liability that was arising out of this case. Though the decision was challenged by the UCL, however, the plea was not dismissed, instead the amount of compensation was reduced from 350 crore to 250 crore. The Union of India also argued that the corporate veil be lifted of the UCL as UCL had real control over the organisation’s activities (Dhara & Acquilla, 2013).

The Union of India also argued that the Bhopal Gas Leak Act was not unconstitutional as it helps in speedy and effective disposal of the matters related to the Bhopal Gas Tragedy. The main aim of formulation and establishment of the Act was to ensure that the Central Government takes up the responsibility of litigating in behalf of the victims.

With the establishment of the Act, the central government can take the “locus standi” for filing suits in behalf of the victims. The Union of India argued that the victims of the Bhopal Tragedy were poor and many of them did not have the capability of going to the Courts. Thus, the authority that is provided by the Act to the central government allows the government to demand for compensation in their behalf.

Moreover, the establishment of the Act shall help the central government to make a distinction of the suits that have already been instituted and the suits that are pending to be instituted. The Central Government will be able to initiate those issues that have not yet been instituted, with the help of the Act.

The Union of India also opined that the Act does not infringe Article 21 of the Indian Constitution, as the Act does not take away the personal advantages of people. Since the Act is for their betterment for the people by choosing a representative in their behalf, thus, it may be said that the liberty of the person is not infringed in any circumstances with the establishment of this Act (Dhara & Acquilla, 2013).

The Union of India argued that the power of the Central Government is related to obtaining monetary compensation and there are no powers endowed on the Central Government in relation to criminal liability and this provision is clear from the Preamble of the Act. The monetary liability must be in relation to strict, punitive and absolute liability. This means that the Act does not give unrestrained powers to the Central Government (Sharma, 2015).

The Union of India also opined that the Act should help in mitigating issues relating to any disaster that may arise in the future involving Indians who do not have the capability of representing themselves in the Court (Izarali, 2013).

References:

Balganesh, S. (2014). The Constitutionalization of Indian Private Law.

Bourdieu, P. (2014). Bhopal and the US Courts. Victims of Apathy, 23.

Castleman, B. (2016). The export of hazardous industries in 2015.Environmental Health, 15(1), 1.

Dhara, V. R., & Acquilla, S. (2013). Regarding distance of residence in 1984 may be used as exposure surrogate for the Bhopal disaster-further observations on post-disaster epidemiology. The Indian journal of medical research, 138(2), 270.

Izarali, M. R. (2013). Globalization and the Bhopal disaster. A criminogenic inquiry. International Journal of Social Inquiry, 6(1), 91-112.

Jos, J. (2016). Voice of Bhopal: Different Dimensions of the Barriers to Justice in Bhopal Gas Tragedy Case. Available at SSRN 2803271.

Mac Sheoin, T. (2015). Justice for Bhopal! And No More Bhopals! Three decades of national and international campaigning. Process Safety and Environmental Protection, 97, 3-12.

Mittal, A. (2015). Retrospection of Bhopal gas tragedy. Toxicological & Environmental Chemistry, 1-5.

Odysseos, L. (2015). The question concerning human rights and human rightlessness: disposability and struggle in the Bhopal gas disaster. Third World Quarterly, 36(6), 1041-1059.

Odysseos, L. (2016). Human Rights, Self-Formation and Resistance in Struggles against Disposability: Grounding Foucault's “Theorizing Practice” of Counter-Conduct in Bhopal. Global Society, 30(2), 179-200.

Patel, N. A. (2015). Mindful Justice: The Search for Gandhi’s Sympathetic State After Bhopal. Social Justice Research, 28(3), 363-390.

Patel, N. A., & Petlakh, K. (2014). Gandhi's Nightmare: Bhopal and the Need for a Mindful Jurisprudence. Harvard Journal on Racial & Ethnic Justice, 30.

Robinson, N. W., & Bell, G. C. (2013). Effectiveness of culture jamming in agenda building: an analysis of the Yes Men's Bhopal disaster prank.Southern Communication Journal, 78(4), 352-368.

Samarth, R. M., Gandhi, P., & Maudar, K. K. (2013). A retrospective review of cytogenetic studies on methyl isocyanate with special reference to the Bhopal gas tragedy: Is the next generation also at risk?. International journal of occupational medicine and environmental health, 26(3), 324-336.

Sharma, S. (2015). Indian Media and the Struggle for Justice in Bhopal.Social Justice, 41(1/2), 146.

Singh, S., & Bhadoria, S. (2013). Bhopal gas tragedy: a revisit to pick out some lessons we have forgotten in 28 years. Int. J. ChemTech Res., 5(2), 815-819.