In a setback to 1984 Bhopal gas tragedy victims, a US court has held that neither Union Carbide nor its former chairman Warren Anderson were liable for environmental remediation or pollution-related claims at the firm's former chemical plant in Bhopal.

US District Judge John Keena in Manhattan dismissed a lawsuit accusing the company of causing soil and water pollution around the Bhopal plant due to the disaster, and ruled that Union Carbide Corporation (UCC) and Anderson were not liable for remediation or pollution-related claims.

The court ruled that it was Union Carbide India Ltd, and not its parent company UCC that was responsible for the generation and disposal of the waste that polluted drinking water, and the liability rests with the state government.

Plaintiffs Janki Bai Sahu and others had alleged that "toxic substances seeped into a ground aquifer, polluting the soil and drinking water supply in residential communities surrounding the former Bhopal Plant site". They alleged that exposure to soil and drinking water polluted by hazardous waste produced Union Carbine India Ltd caused injuries.

"The summary judgement record certainly indicates that UCIL consulted with UCC about its waste disposal plans and on non-environmental business matter like its strategic plan. However, nothing in the evidence suggests the necessity of UCC's approval for the actions about which plaintiffs complain," the court said in its order.

"Moreover, there is no evidence in this extensive record indicating that UCIL manufactured pesticides on UCC's behalf, entered into contracts or other business dealings on UCC's behalf, or otherwise acted in UCC's name," it said.

The industrial accident, the worst in Indian history, led to the leak of poisonous methyl isocyanate, claiming thousands of lives in the Madhya Pradesh capital.

In his written opinion, Judge Keenan concluded that  even when viewing the evidence in the most favourable light for the plaintiffs  UCC is not directly liable, nor liable as an agent of UCIL, nor liable under a veil-piercing analysis.

Citing a 1998 court verdict in a case involving KFC, the court said that legally the mere assertion that a corporate parent is or was involved in the decision-making process of its subsidiary, or that it controlled the legitimate policies of its subsidiary, will not shift liabilities among distinct corporate entities.

"Moreover, there is no evidence to suggest that UCC's approval power extended beyond the strategic plan to other areas of UCIL's operations," the court said. The court observed that after the 1984 catastrophic gas leak claimed thousands of lives, the Government of India closed the Bhopal Plant.

In 1994, UCC sold its stake in Union Carbide India Ltd, after which time UCIL changed its name to Eveready Industries India Ltd (EIIL). In 1998, EIIL terminated its lease of the Bhopal Plant site and surrendered the property to the state government of Madhya Pradesh.

"As discussed in connection with the direct liability, the expanded summary judgement record demonstrates that UCC played a minimal role, if any, with respect to the decision to back-integrate the Bhopal Plant, the design of the plant's waste disposal system, the choice and development of process technology used at the plant, and the burial of waste in a landfill.

"There is no need to pierce the corporate veil to prevent fraud or injustice because, even if there were evidence that UCC dominated UCIL, there is no allegation or evidence that UCC did so to commit a fraud or wrong that harmed Plaintiffs," it said.

Over 3,000 people are believed to have died in the December of 1984 in Bhopal due to the immediate after effects of the tragedy. According to estimates of independent organisations, many thousands have subsequently died over the years due to ill-effects of the toxic waste in the environment.

"In summary, yesterday's court decision not only dismisses plaintiffs' claims against UCC, but also clarifies that UCC has no liability related to the plant site and further acknowledges the matter of site ownership and liability as being the responsibility of the State Government of Madhya Pradesh," said a statement from UCC following the verdict.

(Press Trust of India / NDTV, 28/06/2012)