WASHINGTON (Reuters) – The U.S. Supreme Court on Wednesday revived 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 ruled 7-1 that there are limits to immunity for entities like the one involved in this case – the International Finance Corp (IFC) – under the 1945 International Organizations Immunity Act, just as there are for foreign countries under a 1976 law called the Foreign Sovereign Immunities Act.

The court, in a decision written by conservative Chief Justice John Roberts, overturned a lower court’s ruling that the IFC, part of the World Bank Group, was categorically immune from such lawsuits under U.S. law.

The IFC provided $450 million in loans in 2008 to help construct the coal-fired Tata Mundra Power Plant in Gujarat, India. IFC loans included provisions requiring that certain environmental standards are met. Lead plaintiff Budha Ismail Jam and other fisherman and farmers living near the plant sued in federal court in Washington in 2015, accusing the IFC of failing to meet its obligations. Read More