Civil Liability for Nuclear Damage Bill, 2010

Following President Barack Obama’s recent visit to India, reports in the media suggest that the central government has so far resisted any pressure from the US on making changes in certain provisions of the Civil Liability for Nuclear Damage Bill, 2010. The bill was passed unanimously in the Lok Sabha on 25 August after much debate. The government, at the eleventh hour, dropped the provision of “intent” as a precondition to supplier liability for a nuclear accident caused by defective material. The operator can now sue the supplier for damages without an agreed contract or intention to cause a nuclear accident. The US has expressed major concerns about this provision.

Purpose of the bill

The adoption of a clear and adequate domestic liability regime for nuclear damage looks to pave the way for India’s long-term sustainable energy needs. The bill aims to facilitate the involvement of foreign parties in the nuclear sector, particularly suppliers of equipment for nuclear power plants, and create a mechanism for speedy compensation of victims of nuclear disasters. Foreign companies, particularly large corporations such as General Electric and Westinghouse see the bill as a necessary precursor to obtaining insurance cover in their home states, before entering into nuclear commerce with India. Also, operators cannot start operating nuclear installations without getting an insurance policy or financial cover.

Currently, India is not a signatory to the three major international agreements that form the framework of nuclear liability. However, India has signed a few bilateral agreements for co-operation and use of nuclear energy for civilian purposes, including a pact with France that explicitly states that India must create a civil nuclear liability regime for compensating damage caused by incidents involving nuclear material and facilities.

Akshay Jaitly is a partner in the Delhi office of Trilegal where Yamini Jaishankar is a consultant and Sairam Sanath Kumar is a manager of corporate communications. Trilegal is a full-service law firm with offices in Delhi, Mumbai, Bangalore and Hyderabad. The firm has over 120 lawyers.