U.S. Supreme Court mulls pollution dispute over power plant in India

By Lawrence Hurley

WASHINGTON (Reuters) - The U.S. Supreme Court on Wednesday appeared unlikely to revive a lawsuit by villagers in India seeking to hold a Washington-based international financial institution responsible for environmental damage they blame on a power plant it financed.

The justices heard an hour of arguments in an appeal by the villagers of a lower court ruling that the International Finance Corp was immune from such lawsuits under U.S. law. Based on questions asked by several justices, the court looks likely to rule in favour of the IFC, which is part of the World Bank Group.

IFC provided $450 million in loans in 2008 to help construct the coal-fired Tata Mundra Power Plant in Gujarat. IFC loans include provisions requiring that certain environmental standards are met.

Lead plaintiff Budha Ismail Jam and other fisherman and farmers who live near the plant sued in federal court in Washington in 2015, saying the IFC had failed to meet its obligations.

A ruling is due by the end of June.

(Reporting by Lawrence Hurley; Editing by Will Dunham)