LONDON — The U.S. Supreme Court decision that the World Bank does not have absolute immunity from prosecution is unlikely to trigger a flood of lawsuits but it could bolster calls for the institution to strengthen its internal accountability mechanisms, international lawyers said.
On Wednesday, America’s top justices handed down a landmark ruling in favor of a group of Indian villagers looking to sue the International Finance Corp. — the private sector arm of the World Bank — for its support for the coal-fired Tata Mundra Power Plant. The villagers said the project contaminated groundwater, killed marine life, and ejected coal ash into the air. IFC did not contest that the damage occurred, but argued it is immune from liability under U.S. law.
The Supreme Court ruled 7-1 that IFC is “not absolutely immune from suit” since it can be held liable under the 1976 Foreign Sovereign Immunities Act for “commercial activity which has a sufficient nexus to the United States.”