A District Court judge in New York sided with Union Carbide Company (UCC) and its erstwhile CEO Warren Anderson in denying that they faced any direct liability towards the victims of the 1984 Bhopal gas tragedy.
The ruling stunned many of those pressing for compensation for the devastating injury and thousands of deaths resulting from the leakage of poisonous methyl isocyanate and other toxic pollutants into the soil and water surrounding the UCC’s plant in Bhopal.
In particular, plaintiffs Janki Bai Sahu and others 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”.
In dismissing the case, Judge John Keenan argued that “there can be no individual liability for defendant Anderson,” because he did not personally approve the location of the Bhopal plant of Union Carbide India Limited (UCIL). Instead, the ruling hinted that it was the Government of Madhya Pradesh that was responsible for allotting the land for the plant.
Similarly, Judge Keenan declined to apply a corporate veil-piercing approach linking Indian and New York state law when he said, “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 the plaintiffs.”
In arguing this, the Court essentially voiced its support for the separation of corporate identity between the UCC and UCIL, in the process clearing the UCC of what is known as “Alter Ego liability” under local laws in the process.