Report No. 188
Equally significant are the following other observations in that judgment of Keenan J:
"This Court is persuaded, by the example of the Bhopal Act itself and other cases where special measures to expedite were taken by the Indian judiciary, that the most significant, urgent and extensive litigation ever to arise from a single event could be handled through the judicial accommodation in India, if required."
"To sum the discussion on this point, the Court determines that the Indian Legal System provides an adequate alternative forum for the Bhopal litigation. Far from exhibiting a tendency to be so 'inadequate or unsatisfactory' as to provide 'no remedy at all', the Courts of India appear to be well up the task of handling this case.... Differences between the two legal systems, even if they inure to plaintiff's detriment, do not suggest that India is not an adequate alternative forum."
The learned Judge also stated that continuation of the claims in US would add unnecessary administrative costs to the American judicial system and that taking up such claims in US would amount to unnecessary burden upon the time of US Courts. He said:
"In addition to the burden on the Court system, continuation of this litigation in the forum would tax the time and resources of citizens directly; clearly, the administrative costs of this litigation are astounding and significant."
In the above case, Prof. Marc Galanter's affidavit about delays in India and as to why US courts are more appropriate to decide the claims was rejected by Judge Keenan.
(B) Now let us compare the above eulogies of the Indian judicial system with what the 3rd Circuit Court of Appeals had to say in Bhatnagar vs. Surendra Overseas Ltd. (1995) 52 F.2.d. 1220(3rd Cir). (This case is now oft quoted in US Courts for the purpose of entertaining and continuing the cases filed in US). Lewis J referred to the affidavit of Prof. Marc Galanter and of Mr. Shardul Shroff (a lawyer from India) both of whom made unfortunate generalizations that the "Indian Court system was in a State of virtual collapse." Lewis J accepted the affidavits and affirmed the District Court's reasoning for continuance of the case in US. He said:
"The district court found that the Indian legal system has a tremendous backlog of cases - so great that it could take upon a quarter of a century to resolve this litigation if it were filed in India."
It is rather curious that in this very case the US Court relied upon the abovesaid affidavit of Prof. Marc Gallanter (and of Mr. Shardul Shroff of India) to continue the case in US, while in the Bhopal case, a similar affidavit of Prof. Marc Gallanter on the same lines was not accepted and the Court refused to entertain the case filed in US on behalf of Indian victim.
In Bhatnagar, referred to above, after quoting Piper Aircraft (1981) 454 US 235 to the effect that there are also delays in US courts and that in the view of the US Courts, delays upto two or two and half years could be reasonable, Lewis J said that if the 'remedy becomes so temporarily remote that it is no remedy at all', then it is not an appropriate remedy. We may also mention that the affidavit of Mr. Shardul Shroff in the above case, stated that according to the view of a former Chief Justice of India the Indian legal system was 'almost on the verge of collapse'. In Bhatnagar, the District Court had rejected the application by the Indian defendant for stay of the case filed in the US on the ground that the case could take 15-20 years if relegated to the Calcutta High Court and then five more years in appeal. The 3rd Circuit affirmed this view.
More recently in Modi Enterprises vs. ESPN Inc (dt. 4.3.2003) Judge Ira Gammerman of the Supreme Court of the State of New York, New York County observed, while entertaining and retaining the suit filed in US against Indian parties:
"but it is evident that there are backlogs in the Indian Courts, including the Delhi High Court in which this claim would be litigated that would be viewed as intolerable in New York Court, sometime involving decades. Such delay has been viewed a factor supporting denial of a forum non conveniens motion: see Bhatnagar vs. Surendra Overseas Ltd. 52 F 3d 1220 (30 cir, 1995)(India not an adequate forum due to lengthy backlogs).
Curiously, in order to justify retention of the case in US Courts, Judge Ira Gammerman refers to the Indian plaintiffs' pleadings in the Bhopal case about delays in India in mass-tort claims but does not refer to the ultimate judgment in the Bhopal case where Keenan J of the US Court rejected the plea based on delays in India and had, in fact, praised the Indian judicial system. One would have expected the judge to go by the ultimate judgment of Keenan J of the US Court in the Bhopal case rather than rely on a plea therein which Judge Keenan did not accept!
One other reason given by the Judge Ira Gammerman in Modi Enterprises to retain the suit in the Court in US was that it was necessary to protect New York as a world leader in commerce. The Judge said the case was being retained in New York with a view
"to protect the reputation of New York as a leader in international Commerce and to encourage other foreign entities to come to New York to do business without fear that the New York Courts will relegate their law suits against entities operating in New York, to delay-plagued courts of the foreign entity's own home jurisdictions". If Courts in other countries too think that enlarging the Court jurisdictions would help growth of commerce in those countries, the principle of comity between Courts of different countries would soon become a dead letter.
More recently, in Shin-ETSU Chemical Co. Ltd. vs. ICICI Bank (dt. 5.8.03) already referred to, Judge Ira Gammerman of the Supreme Court of the State of New York, while retaining yet the case filed in the US by the Japanese company against the Indian bank, observed:
"In Bhatnagar (52 73d. 1220, 3rd Cir 1995), which is remarkably similar to this case, the Third Circuit upheld the District Court's denial of the motion to dismiss the forum non conveniens grounds stating, "at some point, the prospective judicial remedy becomes so temporarily remote that it is no remedy at all and may render (an) alternative forum so 'clearly unsatisfactory' as to be inadequate'. Id. At 1228" and continued as follows:
"Here, plaintiff's expert stated that if the action were pursued in India, it would take between fifteen to twenty years to be resolved. Thus, plaintiff could very well be deprived of its day in Court if required to litigate in India."
What the US Court described as an appropriate remedy in Bhopal (viz. remedy in Indian Courts) was treated as 'no remedy at all' in Bhatnagar, Modi and Shin Etsu. The difference, it appears to us, was only that in Bhopal, the claimants were Indian victims while in these cases, the defendants were Indians.
At one time, US courts had indeed chauvinistically observed that to take up a case which ought to have been filed in another country would be 'derogatory to foreign Courts'. It was applied in Bhopal. But later, ironically, the principle was given up and was not applied in Bhatnagar, Modi and in Shin ETSU.
This recent attitude of US courts has indeed come for serious criticism by other jurists too. Mr. Peter Prince (1998) (Vol. 47) (International & Comparative Law Quarterly, p 73 at p 576) notes that the US Courts speak differently on the basis of who is the plaintiff. He says, the principle of 'forum non conveniens'
"ironically specifically worked against foreign plaintiffs trying to recover damages from Americans or English defendants in the defendant's home country".
Mr. Peter Prince (ibid p 580) refers to the discrimination against foreign plaintiffs and says that the Bhopal case clearly shows the application of the 'most suitable forum' approach against the foreign plaintiff.
This chauvinism argument "as employed by real world players in the forum non conveniens arena is purely strategic", says Robertson ('The Federal Doctrine of Forum Non Conveniens' ((1994) 29 Texas I.L.J. 353, at 372-373). He says further that "In the Bhopal hearings in the United States, Union Carbide unstintingly praised the Indian judicial system," what is more, when the Bhopal case shifted to India, Union Carbide "wantonly assailed the dignity and authority of the (Indian) Supreme Court'.
Apart from the attitude of US Courts, the attitude of US multinationals has also come for serious criticism. Peter Prince (ibid 580) also rightly points his finger at the unreasonable attitude of US multinationals such as Union Carbide doing business outside US. He says:
"it is not apparent why - as in the Bhopal case - an Indian plaintiff's chances of obtaining damages from a US multinational company should be adversely affected by the 'respect' of the United States for the system of law in India. If 'international respect' is to be regarded as a legitimate factor in forum non conveniens cases, it would seem more respectful to other nations to ensure that multinational companies based in developed countries such as the Union Carbide are not allowed to escape the legal standards of their home country by virtue of an unnecessarily liberal forum nonconveniens doctrine'.
Mr. Joel R Paul too criticizes the attitudes of multinationals: (see 'Country in International Law': (1991) 32 Harv. I.L.J. 14)
"By refusing to exercise jurisdiction in a case like In re Union Carbide, a Court effectively allows a US manufacturer to avoid US tort liabilities and encourages other manufacturers to locate plants abroad." Such attitudes of US multinationals may ultimately damage US interests abroad. As pointed out by Miller (1991) 58 U.Chi L Rev 1369 (1386), "If other countries believe that the United States does not care if its corporators act abroad in a manner prohibited at home, that perception could strain diplomatic relations and create an unflattering repudiation for US Courts."
Rankin also notes (see 1993, XVIII Boston College Int. & Com L Rev 221) that defence pleas by US multinationals in actions for environmental damage filed in foreign countries have done much harm to create the perception that the law of the United States allows its multinationals to avoid US legal standards when operating overseas. The above assessment of several jurists shows that the approach of US Courts and US multinationals has not been fair to alien plaintiffs in US Courts.