Dow and the Bhopal Tragedy

The 1984 gas release from the plant in Bhopal, India was a terrible tragedy. It is important to note that The Dow Chemical Company (TDCC) never owned or operated the Bhopal plant. When Union Carbide Corporation (UCC) became a subsidiary of TDCC in 2001, TDCC did not assume UCC’s liabilities. Despite these facts, there are those who continue to assert that TDCC has liability for the Bhopal tragedy.

Further information on Union Carbide (UCC) and the Bhopal tragedy can be found here www.unioncarbide.com/bhopal.

Relationship between Dow & UCC

What is the relationship between The Dow Chemical Company (TDCC) and Union Carbide (UCC)?
In February 2001, Dow acquired all of the shares of UCC stock, and UCC became a wholly owned subsidiary of Dow. Dow and UCC did not merge and did not become the same company. Since the 2001 transaction, UCC has operated as a wholly-owned subsidiary of Dow, with its own assets and liabilities distinct and separate from Dow’s. Today, despite the merger of Dow and DuPont, UCC remains a separate subsidiary company with its own assets and liabilities. 

Did The Dow Chemical Company (TDCC) inherit any liability for Bhopal when it purchased the shares of Union Carbide (UCC) in 2001?
No. While UCC's stock is owned by TDCC, UCC remains a separate company as a TDCC subsidiary. Under well-established principles of corporate law, both in India and the United States, TDCC did not assume UCC's liabilities as part of the 2001 transaction.

Indeed, according to the formal legal opinions of two respected Indian jurists, Senior Counsel, Dr. Abhishek Manu Singhvi and Mr. Arun Jaitely, TDCC cannot be found liable under the laws of India. (See the full opinions in the following documents: > Dr. Abhishek Manu Singhvi and Arun Jaitely).

TDCC did not own UCC’s stock during the time the Bhopal plant was operating or at the time of the December 1984 gas release. By the time TDCC purchased UCC’s stock in 2001, nearly 17 years after the gas release, UCC had sold its interest in Union Carbide India Limited (UCIL), the entity which operated the plant at Bhopal. 

Most important, UCC and UCIL settled all liability claims related to the gas release under a legally-binding settlement with the Union of India approved by the Supreme Court of India in 1989, some 12 years before UCC’s transaction with Dow. The Court has reviewed the fairness and adequacy of the agreement and has upheld the validity of the agreement twice since 1989, in 1991 and again in 2007. In the settlement, UCC was not held  responsible for the gas release. No court has ever ruled on UCC’s liability for the gas release or found UCC liable. 

In June 2013 in a case addressing the corporate liability of UCC for acts of UCIL, the U.S. Court of Appeals for the Second Circuit ruled that UCC is not liable for any environmental remediation or related site environmental consequences at the Bhopal plant site in India. The Court stated: “[M]any others living near the Bhopal [India] plant may well have suffered terrible and lasting injuries from a wholly preventable disaster for which someone is responsible. After nine years of contentious litigation and discovery, however, all that the evidence in this case demonstrates is that UCC is not that entity.” 

Has Dow accepted liability for other claims that were filed against Union Carbide (UCC), such as asbestos?
No. Although some have made such an assertion, it is categorically false. These assertions are a misguided attempt to establish that there has been a precedent of Dow accepting liability for UCC. Such precedent does not exist, because TDCC has never paid asbestos claims nor accepted or paid liabilities of any kind on behalf of UCC.

Government of India Curative Petition (CP)

Bhopal Site Remediation

Criminal Proceedings

What does it mean for The Dow Chemical Company (TDCC) that the Bhopal court has issued the company a notice to show cause in the criminal case?
The Court’s notice to TDCC is a procedural step – merely a request for TDCC to appear to show cause why an NGO application should not be granted. It is not a determination that TDCC is liable or responsible for the gas tragedy. The application seeks to force TDCC to produce UCC for a criminal trial. It was filed by NGOs and not the prosecutorial authority, which is the government. It is not a summons nor does it make TDCC a party to the proceeding. To date, TDCC has not been served with the notice in the manner required under Indian law. 

Any efforts to directly involve TDCC in legal proceedings in India concerning the 1984 Bhopal tragedy are without merit. The Indian criminal court has no jurisdiction over TDCC, and therefore cannot compel TDCC to take any action. Moreover, TDCC and UCC are separate companies. TDCC has no liability for Bhopal and any attempts to attach the company to the criminal matter are highly inappropriate, as criminal liability cannot be transferred from one entity to another. In addition, UCC is not subject to the jurisdiction of the criminal court in India.

What does the Bhopal issue and related litigation mean for Dow businesses in the region and does this change our position regarding growth in the region?

Dow does not conduct business directly in India. The Dow presence in the country involves separate affiliated companies. 

Why does The Dow Chemical Company (TDCC) claim that the Indian courts do not have jurisdiction over the company?
The lack of jurisdiction over TDCC in India means that the Indian courts cannot compel TDCC to appear in court, take any action or pay any judgment. TDCC's corporate relationship to UCC does not give the Indian courts jurisdiction over TDCC in Bhopal-related matters. Moreover, UCC did not become a TDCC subsidiary until some 16 years after the Bhopal gas leak. UCC remains a separate corporation with its own assets and liabilities. TDCC itself does not conduct business in India; separate affiliated companies do. The fact that other TDCC indirect subsidiaries may conduct business in India does not give rise to jurisdiction over TDCC itself.