Bhopal residents have sued Union Carbide, now part of Dow Chemical Co, over water and soil pollution allegedly caused by the gas leak at the chemical company's now-shuttered pesticide plant. Union Carbide says responsibility for the environmental conditions around the site lies with Indian authorities.

Well-known US attorney Kenneth Feinberg, who oversaw the compensation fund for victims of the Sept. 11, 2001 attacks, last month had offered to serve as a court-appointed mediator in the case for free at the request of the plaintiffs. Union Carbide opposed calls to appoint a mediator.

Judge John Keenan of US District Court in Manhattan said in a written ruling dated Monday that in light of Union Carbide's opposition to the request and its stance that mediation in the case would be useless, "it would be counterproductive to use Mr Feinberg's proffered services."

Thousands of people died in the aftermath of the 1984 gas leak, called one of the world's worst industrial disasters.

People of Bhopal and environmental groups say many more people have been harmed since then by pollutants seeping out of the plant site into ground water, which they contend have caused health problems for nearby residents including cancer, growth retardation and dizziness.

Union Carbide paid $470 million in damages to the Indian government in 1989 for victims of the gas leak.

The US pollution lawsuit got new life in November when it was revived by a federal appeals court in New York, which said the district court made a mistake by throwing it out.