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The Incident, Response and Settlement

In the early hours of December 3, 1984, methyl isocyanate (MIC) gas leaked from the Union Carbide India Limited (UCIL) plant in Bhopal, India. According to the state government, approximately 3,800 people died, approximately 40 people experienced permanent disability, and approximately 2,800 other individuals experienced partial disabilities.

Shortly after the gas release, Union Carbide launched an intensive effort to identify the cause. An initial investigation by Union Carbide experts reported that a large volume of water had apparently been introduced into the MIC tank, causing a chemical reaction forcing the chemical release valve to open and allowed the gas to leak. A committee of experts working on behalf of the Indian government conducted its own investigation and reached the same conclusion. An independent investigation by the engineering consulting firm Arthur D. Little determined that the water could only have been introduced into the tank deliberately, since safety systems were in place and operational that would have prevented water from entering the tank by accident.


Union Carbide’s Response Efforts
In the wake of the release, Union Carbide Corporation provided immediate and continuing aid to the victims and set up a process to resolve their claims.


In the days, months and years following the disaster, Union Carbide took the following actions to provide continuing aid:

  • Immediately provided approximately $2 million in aid to the Prime Minister’s Relief Fund.
  • Immediately and continuously provided medical equipment and supplies.
  • Sent an international team of medical experts to Bhopal to provide expertise and assistance.
  • Funded the attendance by Indian medical experts at special meetings on research and treatment for victims.
  • Provided a $2.2 million grant to Arizona State University establish a vocational-technical center in Bhopal, which was constructed and opened, but was later closed and leveled by the government.
  • Offered an initial $10 million to build a hospital in Bhopal; the offer was declined.
  • Provided an additional $5 million to the Indian Red Cross;
  • Established an independent charitable trust for a Bhopal hospital and provided initial funding of approximately $20 million.
  • Upon the sale of its interest in UCIL, and pursuant to a court order, provided approximately $90 million to the charitable trust for the hospital.

The Settlement

As Union Carbide continued to provide interim relief funds and work with the Bhopal community on medical and economic aid, legal actions proceeded in both the U.S. and India. The courts ultimately decided that the proper country for legal proceedings was India and matters were consolidated and proceeded before the Supreme Court of India.


In May 1989, Union Carbide and Union Carbide India Limited (UCIL) entered into a $470 million legal settlement with the Government of India, which represented all claimants in the case. The settlement was affirmed by the Supreme Court of India, which described it as “just, equitable and reasonable,” and settled all claims arising out of the incident. Ten days after the decision, Union Carbide and UCIL made full payment of the $470 million to the Indian government.


The settlement award was much larger than any previous damage award in India, and was $120 million more than plaintiff’s lawyers had told U.S. Courts was fair. The settlement was reached after the Supreme Court of India reviewed all U.S. and Indian court filings, applicable law and relevant facts, and an assessment of the victims’ needs. In its opinion, the Court said that compensation levels under the settlement were far greater than would normally be payable under Indian law. By November 1990, the Reserve Bank of India reported that the settlement fund, with interest, was approximately twice what was estimated to be needed to compensate the victims.


To resolve continuing legal disputes, the Supreme Court of India later upheld the $470 million settlement in its entirety and dismissed all outstanding petitions seeking review of the settlement.


Pursuant to the settlement, the Government of India assumed responsibility for disbursing funds from the settlement and providing medical coverage to citizens of Bhopal in the event of future illnesses. In July 2004, fifteen years after reaching settlement, the Supreme Court of India ordered the Government of India to release all additional settlement funds to the victims. News reports indicate that there was approximately $327 million in the fund as a result of earned interest from money remaining after all claims had been paid.