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No proposal to amend n-liability law: MEA

‘Right to recourse’ part of contracts; nuclear accident victims cannot sue suppliers under tort law.

Written by Shubhajit Roy | New Delhi |
February 9, 2015 1:53:36 am

Exactly two weeks after Prime Minister Narendra Modi and US President Barack Obama agreed on a “breakthrough understanding” on the nuclear liability issue in the Indo-US civilian nuclear deal, India Sunday sought to lift the veil on the understanding agreed between the two sides: Firstly, the “right to recourse” will be part of the contracts between Indian operators and suppliers (both foreign and domestic). Secondly, it cited parliamentary proceedings and templates from other domestic laws to say that suppliers cannot be sued by victims under the tort law.

Stoutly rejecting that India agreed to amend its nuclear liability law (Civil Liability for Nuclear Damage Act of 2010 and the CLND rules of 2011), the Ministry of External Affairs said through 19 Frequently Asked Questions that there is “no proposal to amend the Act or the rules”.

On the “right to recourse” section, the government said Section 17 states that the “operator shall have a right to recourse” and added that this is “not a mandatory” but an “enabling” provision. In other words, it permits but does not require an operator to include in the contract or exercise a right to recourse.

So, even though there is no mandatory legal requirement under the CLND Act to provide for a right of recourse in a contract, there may be policy reasons for having a risk sharing mechanism, including a right of recourse.

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On the broad scope of section 46 — which addresses the issue of victims sueing suppliers under the tort law — the government said the language in section 46 of CLND Act 2010 is similar to such language in several other legislations “such as Telecom Regulatory Authority Act, Electricity Act, SEBI Act, Insurance Commission Act”.

Section 46 applies “exclusively to the operator” and “does not extend to the supplier”, the government said, and cited Parliamentary debates at the time of adoption of this Act.

“During the course of the vote on various clauses of the Bill, in the Rajya Sabha two amendments were moved for clause 46 that finally became Section 46 of the CLND Act that inter-alia sought to include suppliers in this provision. Both those amendments were negatived. A provision that was expressly excluded from the statute cannot be read into the statute by interpretation,” the government said.

It added: “Section 46 …does not exempt the operator  from any other proceedings instituted against him, apart from this Act, nor derogates from any other law in force in India… At the same time it does not create the grounds for victims to move foreign courts.

The government concluded by saying that it will now be “up to the companies to follow up with their own negotiations and come up with viable techno-commercial offers and contracts consistent with our law and our practice”, so that reactors built with international collaboration can start contributing to strengthen India’s energy security and India’s clean energy options, it also said that the US companies were part of the process.

It said that the contact group, comprising representatives from Ministry of External Affairs, Department of Atomic Energy, Nuclear Power Corporation of India Ltd (NPCIL), Ministry of Finance, Ministry of Law and Justice, in addition to the representatives from US Government, also had an interface with the companies — NPCIL on the Indian side and Westinghouse and General Electric on the US side, and they met three times in New Delhi (16-17 December 2014), Vienna (6-7 January 2015) and London (January 21-22, 2015).

Based on these discussions, an understanding was reached with the US on the two outstanding issues on civil nuclear cooperation, which was confirmed by the countries’ leaders on January 25.

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