Thumbs Down

For a moment, it looked as if the legal clouds were finally lifting from the worst industrial disaster in history. Union Carbide said last week that it had reached a settlement with attorneys for the victims of the December 1984 chemical-leak catastrophe at the company's plant in Bhopal, India. The Danbury, Conn.-based firm (1985 revenues: $9 billion) agreed to pay $350 million in damages for the disaster, which killed at least 1,758 people and may have injured up to 300,000 others.

But after Carbide's announcement, the government of Indian Prime Minister Rajiv Gandhi called the settlement "totally unacceptable." The New Delhi goverment insisted that it would only agree to an amount that would "fully and fairly compensate all the victims." Indian officials privately deemed that figure to be in the $700 million to $1 billion range.

The Bhopal victims' American attorneys, who include F. Lee Bailey of Boston and Stanley Chesley of Cincinnati, apparently decided that the settlement offer was preferable to the possibility that the case might eventually be transferred out of U.S. courts to India. There, a judgment would be limited by the size of Union Carbide's Indian subsidiary, which has only $80 million in assets, compared with the parent company's $10.6 billion.

The judge hearing the Bhopal case, John Keenan of the federal district court of New York, has expressed skepticism about the settlement, and Carbide has opened new negotiations with the Indian government. Whatever the outcome, Union Carbide Chairman Warren M. Anderson, 64, will soon put the Bhopal ordeal behind him. Last week the company named Robert D. Kennedy, 53, the president of Carbide's chemicals and plastics division, as Anderson's successor. Anderson, who had been planning to retire just before the Bhopal tragedy struck, will step down in November.