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Lawsuit

Intl. Finance Corp. lawsuit (re financing of coal-fired plant in India)

Status: OPEN

Incident date
April 23, 2015
Unknown
Community
Location of Filing: United States of America
Location of Incident: India
Type of Litigation: Transnational
Company: International Finance Corporation
Company Sector: Finance & banking
Company Location: United States of America

Sources

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Snapshot

In 2015, Indian fisherman and farmers filed a lawsuit against the IFC in US federal court over environmental damage form the Tata Mundra plant which the IFC financed. IFC argued they can not be sued because the did not engage in commercial activity and should be immune from suit. The case is ongoing. 

Legal proceedings

In November 2015, Indian fishermen and farmers filed a lawsuit against the International Finance Corporation (IFC) in US federal court over environmental damage from the Tata Mundra plant in Gujarat, India, a power plant that the IFC financed.  In March 2016, a judge ruled that the IFC could not be sued in this case. 

In August 2016, affected communities and farmers filed an appeal arguing that, under recent US Supreme Court decisions, the IFC is not entitled to absolute immunity and should be subject to suit for damage caused by the power plant. On 23 June 2017, a US court of appeals ruled that the IFC is entitled to “absolute immunity” and cannot be sued by the communities harmed by IFC projects.  In July 2017, the affected communities asked a court to review the "absolute immunity" doctrine. On 26 September 2017, a US Court of Appeals ruled that it would not reconsider the immunity rule. On 22 January 2018, the plaintiffs appealed to the US Supreme Court that agreed to hear the case, thereby accepting to consider the question of whether or not international organizations such as the World Bank are immune from being sued. On 31 July 2018, the US Government, as well as nine NGOs and experts, filed amicus briefs to the Supreme Court in support of the plaintiffs, arguing that international organizations like the World Bank Group should be subject to lawsuits for damages arising out of their commercial activities.

On 31 October 2018, the US Supreme Court heard Indian villagers' appeal challenging the immunity of the IFC under US law. On 27 February 2019, the US Supreme Court ruled that the IFC is not immune from proceedings in US courts and can in fact be sued when it is acting as a private player in the market. The case will return to the lower courts.

In January 2020, the US District Court heard oral arguments from the parties. IFC argued they did not engage in commercial activity by issuing and managing a loan and therefore should still be immune from suit. Plaintiffs countered issuing a loan for the coal-fired plant is commercial activity and since that loan was issued and managed by the IFC headquarters in D.C., there is sufficient contacts with the United States.

EarthRights International provides more information on this case and access to the case files and court documents here.

Case Timeline