The US Supreme Court on Monday agreed to consider reviving a lawsuit by Indian villagers against a power plant in Gujarat, funded by US-based international finance institution, which has allegedly resulted in environmental damages.
The justices will hear an appeal by the villagers of a lower court ruling that the International Finance Corp was immune from such lawsuits under federal law. IFC, part of the World Bank Group, is an international institution with 184 member countries that helps secure financing for projects in developing nations.
The case revolves around the IFC’s decision in 2008 to provide $450 million in loans to help construct the coal-fired Tata Mundra Power Plant in Gujarat, India. IFC loans include provisions requiring that certain environmental standards are met.
The Supreme Court said it would decide whether the IFC enjoyed immunity under the 1945 International Organisations Immunity Act.
The villagers, led by Budha Ismail Jam, along with several other farmers and fishermen, allege that coal-fired Tata Mundra Power Plant has resulted in widespread environmental damages.
Jam and other petitioners knocked the door of the Supreme Court this year after lower courts dismissed their petitions arguing that the IFC enjoyed immunity, like other foreign countries, under the 1945 International Organizations Immunity Act.
In their petition, the villagers argued that the Tata Mundra Power Plant has failed to comply with international environmental standards. This has resulted in devastation of local environment.
"International organisations play an ever-increasing role in the economic landscape of this country and the world. Therefore, the question whether they are absolutely immune from any kind of lawsuit - no matter how strictly commercial their activities; no matter how egregious their actions; and no matter the views of the Executive Branch - has great significance," the petitioners argued.
Earlier in 2015, the applicants - Indian farmers, fishermen, a trade union of fishworkers, and a local government entity - sued the IFC in the US District Court for the District of Columbia. They brought claims for negligence, negligent supervision, public nuisance, private nuisance, trespass, and breach of contract.
The petitioners lost the case before a district court in 2016 and the US Court of Appeals for the District of Columbia in 2017. Both the courts argued that IFC enjoys immunity.
The court will hear arguments and decide the case in its next term, which begins in October.
(With inputs form PTI)