Union Carbide Corporation v Union of India

Facts

• On the night of 2-3 December 1984, methyl isocyanate gas leaked from the Union Carbide plant in Bhopal, killing thousands and injuring hundreds of thousands
• The Government of India, acting as parens patriae under the Bhopal Gas Leak Disaster Act, 1985, represented all victims in litigation against Union Carbide

Issue

1. Whether the Supreme Court can approve a settlement in mass disaster litigation acting parens patriae, and what standard of liability applies to enterprises engaged in inherently hazardous activities.

Held

• The Supreme Court approved a settlement of USD 470 million
• The Court has power under Article 142 to do complete justice, including approving settlements in mass disaster cases
• The principle of absolute liability (MC Mehta) applies to hazardous industries; no defence of due diligence, act of God, or contributory negligence is available
• The Government can represent victims as parens patriae for efficient mass tort adjudication

Ratio Decidendi

The Supreme Court can settle mass tort claims under Article 142. Absolute liability applies to hazardous industries without exceptions. The State as parens patriae can litigate on behalf of disaster victims for efficient adjudication.