By Vershika Sharma, National Law University, Jodhpur.

The Civil Liability for Nuclear Damage Act, 2010, (hereinafter referred to as “the Act”), though highly debated and controversial, makes India one of the most powerful and toughest nuclear liability regimes in the world, only second to Austria that bans nuclear energy completely. It protects the interests of the nuclear industry and the potential victims of any nuclear catastrophe. The controversies started with its enactment itself in the year 2010  and stirred again during the recent visit of Barack Obama to India in January, 2015, whereby US tried to intimidate Modi into diluting the Act and if that were not done, the US-India Nuclear Agreement (123 Agreements) would not become functional.

The Act aims to provide a civil liability for nuclear damage and prompt compensation to the victims of a nuclear accident through a No-Fault liability to the operator, appointment of claims commissioner, and establishment of nuclear damage claims commission.

This Act was one of the last steps needed to activate the 2008 Indo-US Civilian Nuclear agreement whereby India agreed to separate its civil and military nuclear facilities under International Atomic Energy Agency safeguards and agreed to work towards full civil nuclear cooperation.

Apportionment of Liability

Whenever there is a major nuclear accident in India causing damage to lives and property, under the terms of the Act, the operator of the nuclear plant is liable, irrespective of the proximate cause of the accident, up to an amount of Rs. 1,500 crore. However, the operator has a “Right to Recourse”, if the accident was caused by the supplier or his employee including the “supply of equipment or material with patent or latent defects or substandard services”. This right is only for a maximum amount of Rs. 1,500 crore that the operator might have to pay as a part of his no-fault liability.

If the damage caused by the Nuclear Accident exceeds Rs. 1,500 crore, the Act makes the central government liable for the excess damage.

But, there is a conflict of interest that is built up in this process of fixing the liability. The central government fixes the quantum of damages through claims commissioner, and when the liability befalls the government, there is a chance that the government might try to manipulate the figures and even if it does not, there is still a clear violation of the principle of natural justice that no one can be the judge in one’s own case.

The Controversies

  1. Capping of nuclear operators’ liability

The maximum amount to be paid by the operators is as meagre as Rs. 1,500 crore as opposed to very high liability caps in US, Germany Finland and Japan. Now, this low cap would induce the operator to go for the liability rather than install safety protocols and the whole purpose of the Act gets defeated.

      2)   Near absence of supplier’s liability

Enabling the operator to seek damages from the supplier in the event of gross negligence is an innovation and aberration from common principles of international law. The provisions of the Act are in itself contradictory. The compensation recoverable from the supplier is to the extent of the operator’s liability or the contracted amount, whichever is lesser. Further, the bar on claiming compensation from the supplier is five years which is not intended by the Act as the limitation period for the Act in general is 10 years. According to the cannons of statutory interpretation, if the rules do not facilitate the functioning of the statute and run against the very purpose of the Act, then the rules defeat the purpose of the legislation and hence, are ultra vires.

  1. Limitation period

The limitation period to make claim for damages under the Act is 10 years which is too short as nuclear accidents have wide and long term repercussions. The Price Anderson Act of USA allows a more progressive recourse as the limitation period under that is five years from the date of discovery of the damage.

  1. Operation of other laws in the country

The criminal and tortuous liability still exists with certain exceptions under Section 45 (generally where the amount is insignificant) and hence, the victims can drag the suppliers to the courts to settle the compensation.

Issues Concerning General Electric

The major problem, that General Electric and other potential suppliers from US and other countries is regarding Section 17(b) which imposes a liability on the supplier in case of gross negligence or when the liability is specified under the terms of the contract. Further, Section 46 ensures that the suppliers are also not exempted from their liabilities prevailing under other laws in force such as criminal and tortuous liability. Both these sections are major concerns to the suppliers and hence, they demand that these provisions must be repealed as no other International law or other country’s laws imposes such strict liability. As rightly stated by Soli Sorabjee that Section 17(b) of the Act is repugnant to the provisions of Article 10 of CSC which provides that the operator can recover compensation from the supplier only when it has been expressly mentioned in the contract or when intend to do harm is shown on the part of the latter. India, however, argues that Section XII(2) of the treaty allows countries to make “provisions outside the scope of the Convention, provided that such provision shall not involve any further obligation on the part of the other Contracting Parties”, and that this is precisely what India has done. In fact the California Court in the case of Cooper v. TEPCO allowed US sailors affected by the 2011 nuclear disaster to sue the operators as well as the suppliers which among others included General Electric. US suppliers were willing to be exposed to the risk of unlimited tort claims in Japan but they have a problem when India enacts a similar provision.

Conclusion

The Act identifies the international stand on the nuclear liability and proceeds with further innovations which make it a powerful law. The Act proves beneficial on most accounts fixing the liabilities of the operators as well as the suppliers. The recent dissents by the suppliers about their liability cannot be justified because if there is gross negligence on their part, there has to be a liability imposed upon them irrespective of the contract specifying the same. The limitation period of ten years is not sufficient for the cases of nuclear accidents and I do believe that the American stand on the same is rather more acceptable and progressive. Therefore, apart from certain necessary changes there is no need to repeal the controversial provisions of the Act merely to maintain healthy relations with one nation.