The US Supreme Court has agreed to hear a petition filed by Indian villagers seeking to hold a US-based international financial institution responsible for widespread environmental damage they blame on a power plant it financed in Gujarat.
The finance wing of World Bank, International Finance Corporation (IFC) has provided $450 million financial assistance to set up coal-fired Tata Mundra Power Plant in Gujarat.
Power plant failed to comply with international environmental standards
The SC would decide whether IFC enjoyed immunity, like other foreign countries, under the 1945 International Organizations Immunity Act.
In their petition, villagers led by Budha Ismail Jam, along with farmers, fishermen and a government entity, argued that the power plant has failed to comply with international environmental standards. This has resulted in devastation of local environment.
Are international organizations absolutely immune from any lawsuit?: Petitioners
"International organizations play an ever-increasing role in the economic landscape of this country and the world," the petitioners said.
"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."
Petitioners sued IFC in 2015 in lower courts, lost case
In 2015, the applicants sued the IFC in US District Court for the District of Columbia. They brought claims for negligence, negligent supervision, public nuisance, private nuisance, trespass, and breach of contract.
However, the petitioners lost the case before a district court in 2016 and the US Court of Appeals for District of Columbia in 2017. Both the courts argued that IFC enjoys immunity.